The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.D.255 Drawings

Usage

This definition applies to assets test hardship rules and assessment of income for sole traders and partnerships.

Definition

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).

Act reference: SSAct section 8(1)-'income'

Policy reference: SS Guide 4.6.7.50 Unrealisable assets - unable or unreasonable to sell or borrow against

Last reviewed: 12 August 2024

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