This definition applies to assets test hardship rules and assessment of income for sole traders and partnerships.
Drawings are the withdrawals of funds from a business by the proprietor during the financial year, and represent either a withdrawal of:
- capital previously advanced to the business, or
- an advance on profits to be earned by the business.
The amount of drawings is completely at the discretion of the proprietor.
Drawings are NOT assessable income, even in situations where the drawings throughout the year are greater than the profit of the business.
Exception: Drawings are considered income when calculating readily available funds for severe financial hardship (1.1.S.120).