Home – New Forums Starting your journey Hobby? Business? Centrelink

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  • #978699
    jdrobbo
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    Hello everyone,
    I know there are a lot of topics already about this, so thank you for reading, I’m still just quite confused with it all.
    Basically, I sell my handspun yarn on etsy as a hobby that doesn’t make very much and relying on parenting payment and ftb while my husband finishes studying and I raise the kids. Recently I have realised a bit of a hole in the market for supplies (like particular packaging and what-not) and have looked into supplementing my handmade stuff with supplies that I think would probably be counted as carrying on a business according to ATO. If it is though, it seems as though it would hardly be worth it by the time centrelink takes their share too, as I’m not expecting to make much, just enough to cover costs and a bit extra.
    I’m wondering how others have made this worthwhile and indeed whether this would reclassify what I do as a business rather than a hobby? I don’t want to just stay in the centerlink cycle but at the same time, if we are going to be worse off for expanding my etsy line, then I need to be practical too.
    I’d love to hear any advice or experience :)
    Thanks,
    Jenna

    #1108897
    John C.
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    Hi Jenna,

    My opinion is that even if you only make an extra $10 above what Centrelink currently gives you, earning it yourself using your own initiative and skills will provide immense psychological benefits to you and give your children the best education that money can’t buy – proof that starting their own business and earning a living using their own initiative is within the reach of any ordinary person.

    Deciding that earning more is not worth it because it will reduce your Government benefits is the type of thinking that poor people practice that keeps them in a never-ending and vicious cycle of poverty.

    Having said all that I understand that many of us at various times of our lives require a helping hand to make ends meet – that’s what the Government benefits are for – but it’s important that we get out of that cycle as soon as we can for our own wellbeing.

    Good luck with your new endeavours.

    Cheers,
    John

    #1108898
    jdrobbo
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    Thanks John,
    I certainly agree, I guess my concern is more along the lines of whether that extra $10is worth pursuing while on centrelink (as we will be both off it in the next 18months) and if so, how other people have made it work. Sorry, rereading my post, it didn’t really come out right. I think I was quite disheartened at trying to negotiate the overwhelming nature of ATO and centerlink and seeming to get nowhere. I’m sure it is something that does work and is worth the stress, just hoping others have words of wisdom that I may be able to learn from :)
    Thanks again,
    Jenna

    #1108899
    Divert To Mobile
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    #1108900
    CateDS
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    I know this is a bit old, but I just thought I would post a potential solution to this problem, for future reference…

    You can use a company structure to simplify the impact of a business on centrelink payments.

    The rules have just changed, so my amounts are not accurate, but until 30 June 2012, if you owned assets (including shares in a company) valued at less than $350K then you were still ok, and if it wasn’t earning more than $50Kp.a. profit it didn’t affect you. Now, obviously this money stays in the company – as soon as you pay yourself, then you affect your centrelink income. But if you are serious about getting out of the centrelink trap, and want to know the safest way to do it, it looks to me like reinvesting profits back into the business while you can, to build value and reduce profits, gives you a bit of a head start. Then when it is doing better, you can start to pay yourself a wage, take the hit to centrelink payments, while keeping a strong business.

    Just for your consideration…

    Cate

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