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  1. #1
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    Default Business owners and benefits

    Do you think it is fair that business owners can be eligible for the same benefits as low income earners even if their business makes huge profits?

  2. #2
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    Subbing
    Not sure i get what u mean though?

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    If they have huge profits they aren't eligible for the same benefits.

    What are you actually trying to say?

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    Do you mean those who have their business set up as a company and draw a small wage so they are eligable for benefits?

    If thats what you mean then yes I think they should be. If the wage is low enough to get benefits then thats all they get in their pocket. The rest could be retained by the business for re-investment (hopefully stimulation the economy and creating more jobs) so the owner doesn't actually see that money.

    Unless they are doing a dodgy of course, and saying they draw less of a wage then they actually do, in that case its illigal.

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    If you have a business that makes huge profits and you can still get benefits either you have a dodgy accountant or an awesome company/trust system.

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    Quote Originally Posted by amyd View Post
    If you have a business that makes huge profits and you can still get benefits either you have a dodgy accountant or an awesome company/trust system.
    Well then that doesn't make one eligible for said benefits - it's straight out fraud.

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    Totally what F&A said.

    It's hard to know what you mean by 'profit' and 'business owner' as I think those terms are used fairly loosely and often incorrectly. I'm a business owner and we have a massive cash turnover, but we also have massive expenses so our profit of what is left in my pocket at the end of the day is not that impressive (under 100K). Therefore I'm eligible for any benefits that anyone else on my wage would be getting.

    My business doesn't really have assets (as in we don't have stock that could be sold off, we are a service in the health industry) so the only money I see is what I get in my pay.

    Anything else and they are doing a dodgy so they are not actually eligible for what they are claiming, therefore your point is possibly moot.

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    I would also add that there are some tax incentives for small business owners because (I believe) our economy needs small business. E.g. Without small shops you are just gonna have Coles and Woolies, without small private health service providers you are just gonna have Ramsay etc.
    You run some risks owning a small business so there needs to be some incentives to soften that blow and stay in the market.

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    Quote Originally Posted by 2Bboys View Post
    Well then that doesn't make one eligible for said benefits - it's straight out fraud.
    You can have a legitimate family trust set up that spreads the payments between beneficiaries of the trust.

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    I obviously do not have the whole story but some friends of mine who have a building business seem to be in this boat. They pay themselves a wage from the business, calculated so they still get max family tax benefits, hers is under the tax free threshold. They then seem to use a lot of the business profits, outside their wage, to pay for things and buy things that are ostensibly for the business but not really which they then claim on tax i.e. things for renovating their house which they write off as for jobs they are doing, a camping fridge for camping and a solar panel to run it which was claimed on tax as a business need (to keep lunch cold at job sites), lots of house expenses for running the business from home (legitimate I know) two cars (one work truck, the other one for running work errands). They seem to do very well. But, they have the risk of the business, they might not get work in the future or have a big insurance claim or something so I guess it balances out. (nb I know all this because my friend tells me, she seems quite proud of it all)


 

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