Home – New Forums Starting your journey Do we have to tell Centrelink about our company/business we have just started?

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  • #988261
    Lauzy
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    Hi all,

    Im new :) From NSW

    My husband and I have just brought a mechanic shop, but we registered our business as a company and made my husband the only director, we opened about a month ago. I have nothing to do with the business, he is the only director, its only that we both have 50% each of the shares.
    Our solicitor said just make one person the director and make sure the business is a PTY LTD company, incase we have any dramas down the track.
    Anyway, the work shop has been up and running for a month now and we have had to tell centre link what will out gross yearly wage be for the next finacial year. (we are married with 2 kids and I work full time in admin not for our company, so we get family tax benefit A and child care rebate).
    I told them my annual wage for the upcoming year and told them my husbands new wage for next year and it said it was very low from last year. (this was because he was working for someone else then now as he is working for himself he is paying him self a low wage each week.)

    Anyway i received a letter yesterday saying “due to your husbands new low wage we will increase your parental payments by $40 a fortnight”.

    My husband and I thought “hmm they havent asked us why his wage has dropped by half. And they dont know he is his own boss now.. Do we have to tell Centrelink that we have our own company and my husband is taking a wage from the business each week?”

    They havent asked us and Im not sure if I have to tell them or not, because were not a sole trader or in a partnership, and also doesnt a company have its own TFN so its a individual anyway?
    So confusing and I hate dealing with Centrelink as it is! Any help would be great especially if you have already been down this road. I dont want to keep earning money from Centrelink (even though its minimal) and then next year they want it all back for some reason..

    Thanks for your time
    Lauz x

    #1166365
    sweetums85
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    I am interested to know this as well as this is playing on my mind and we are looking at starting a business too.

    #1166366
    bb1
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    The standard thing from centrelink is that you need to tell the of “any change in circumstance”, so if he is drawing a wage you need to advise them. If the business is making other income which could in anyway benefit you, you need to tell them.

    Give them a call, they are nice people in general.

    #1166367
    Burgo
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    Instead of talking to just a centrelink person talk with one of their Financial Service Officers.

    I have found them to be extremely helpful and unbiased. Just tell them everything you would tell your best friend so they know who to advise you for the maximum centrelink help. They are really the best people to talk with.

    #1166368
    affgar
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    I would advise them of your change of circumstance.

    If you need any cheap safety gear for your shop … you know where to come. LOL Ouch .. the hard sell. :D

    At the end of the day .. I think all that matters is that your financials are in order. I am not sure if they will take assets or any other information into account with your arrangement?

    Correct me if I am wrong … but shares would be taken into account as part of your financial statement? Maybe not until sold though? Do they take asset value into account to calculate your payments?

    #1166369
    James Millar
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    There are two ways you can be remunerated by a company. First is by salary and wage as a normal employee. The second is by dividends as a shareholder. Given that there is no compulsion to pay dividends then it would be hard to assess someone on them for the purposes of social security. You may only be assessed on the new lower salaries but if your accountant recommends a dividend at year end then this will probably effect your entitlement.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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