Hi everyone, I have asked the exact same question as I have earned a few dollars doing online surveys. I kept getting ignored by Centrelink when I mentioned this, but as I know someone who ended up being in the bad books for not informing them properly for the exact same thing I got kinda paranoid about it. I again mentioned it to my job provider the other day and she wasn't sure so she rang her friend who actually works at Centrelink.
Now what I am telling you is only what I have been told about earning small amounts of money so of it is not entirely correct please don't hold me accountable.
The Centrelink lady said that if money is going into your bank account you will need to notify them to let them know, if you receive a tax return or pay slips you will need to let them know.
Of course if the amount over the year is under a certain amount (not sure of the exact amount) then nothing will happen as it will be classed as either a hobby or as too little to be concerned about. I was told that if it goes into Paypal then (at the moment) you don't have to declare it (this I don't understand as it is still money that you have earned). If you are paid in gift cards then you don't have to declare it. If you are paid in e gift vouchers you don't have to declare it.
I can understand not having to declare gift card payments as it's not cash, but considering any money you regularly earn from any source is meant to have tax paid on it I don't know why Paypal is exempt.
A lot of times when you make money online you are responsible to pay the tax yourself ie:- online surveys that pay actual dollars.
Certain amounts of money Centrelink will class as a hobby as opposed to work because the income is not regular or enough to make it a viable option to support yourself or change your circumstances.
Best bet would be to ask Centrelink.
I have done Avon in the past and also Dominant, as I only made a few dollars each month (it was more so I could purchase their products for a cheaper price rather than make a huge profit), for the first few months I had to report the amounts I was making and after that Centrelink labelled it as a hobby so they were not interested.
So from what I understand if you should be paying tax on it then you should be reporting it to Centrelink. If it is only a small amount every now and then it will be classed as a hobby.
So if you are selling through a website who gives pay slips and/or tax returns you need to declare it. If you are selling on your own you would have to determine what the tax laws are for the amount your are making.
Centrelink will only class it as a job if the amount you are earning is regular and is more than the amount they class as a hobby.
I don't think $15 dollars every few weeks will be enough to classify as an income.
I would ask the ATO about the need for an ABN for the amount you are looking at recuperating for your time and effort. I would ask Centrelink about the amount per month that no longer classifies as a hobby and starts to classify as an income.
There are weird laws for many things around making money. For example you can only have so many garage sales per year before you need to declare it. As soon as you have more than the allowed amount per year (I think it used to be three) you are supposed to register as a second hand dealer. The same goes for selling at markets.
I am guessing that as soon as you find out the amount you can earn before declaring it to the ATO you should have all your answers. Usually if the ATO doesn't care about it then Centrelink doesn't either.
Note that I did say usually.
It would be great if you could share any updated information you have in regards to this, I am sure there are many others out there that could benefit from what you discover about the situation you described.
Post by straightaced on May 3, 2018 19:42:38 GMT 7
Hi guys A question regarding dsp, does commencing part time work mean I should be ready to get reviewed or is there no algorithm regarding who and when are targeted? I was last reviewed a couple years back.
Welcome to the forum straightaced, a large number of people would be studying or working part time on the DSP, a lot would not trigger a review but undoubtedly some do. Unfortunately there would be no yes or no answer to this. We have a couple of members here who work regularly without a problem.
"Tough love" is just the right phrase: love for the rich and privileged, tough for everyone else. Chomsky ..................................................................................................................................................................................... Usually, terrible things that are done with the excuse that progress requires them are not really progress at all, but just terrible things.
As far as I can work out, it depends on how old you are, and how many hours you are working. I myself am now 62 and have been on DSP since 2000 (age 45). I worked as a taxi driver starting at age 52, from 2007-2010, then doing something else for almost 5 years...from 2013 till a few months ago. Sometimes I worked the maximum number of hours allowed.
I have never been reviewed. But then my work history for many years before getting DSP was very poor, and that may have something to do with it also.
If you are working many hours and are fairly young, you have a chance of recovering and entering the full-time work force again. In that case you would be reviewed.
I'm really into things like sewing, jewellery making, and painting. I would love to sell things I make on Etsy or Ebay. I dont understand how this would work though considering the DSP.
I have read about hobbies vs businesses for tax purposes, but what I dont understand is this:
Say it takes me a few hours and $15 in materials to make something, and I want to sell it for $30. Would centrelink or the ATO see the $15 I would make as a profit considering it took me a few hours to make?
If that is seen as a profit, would I then have to become a business or sole trader? Or can I make money and report it to the ATO without being a business/sole trader?
How would centrelink react to this considering its not a job? Or is it?
It would also be fun for me to put videos on YouTube or to write a blog or something. But again, I'm too scared to because I might make a small amount of money.
Does anyone have experience with this?
I have experience in this area and I have been selling items on eBay, mostly mobile phone cables, but essentially anything that turns a profit will do. The answer to your question is that the amount of income reported to Centrelink is the income received AFTER the expenses incurred in generating the income. The rules for business deductions are slightly different to those which the ATO apply - see guides.dss.gov.au/guide-social-security-law/4/7/1/30 and be sure that you follow it. Of course you will be reporting business income on your tax return as well, so bear that in mind - but the ATO have plenty of 'plain English' guidance on deductions for businesses.
As far as reporting income goes, see guides.dss.gov.au/guide-social-security-law/4/7/1/20 - note the need for new businesses to report income after three months, and then every three months again after that. I recall reading somewhere (it may have been an AAT decision) that it is expected that the income for the three month period is reported within 21 days of the end of the period. The guidelines suggest that this is only necessary for the first year, but I continue to do it quarterly, firstly so I'm aware of income levels earlier and also any payment liability to Centrelink will become apparent a lot earlier. Waiting an entire year to assess business income is asking for disaster in my opinion.
You don't need a fancy accounting program or anything, I simply use Excel, in one set of columns I have the date, description and amount of expenses, then the date, description and amount of sales. Finally, the expenses are deducted from the sales to produce a figure of net income earned. I'm uneasy about the Centrelink guide to deductions, so I have chosen this simple system as it is probably reporting more detail than is necessary - the description of the expense, and every time I upload the cash flow statement that Excel generates it includes a covering letter making it quite clear that if they have any questions regarding deductions claimed then to let me know - no questions yet.
I turn over about US$5,000 a year and there is a decent margin as I import my stock from China directly. Just with the ATO, when you are claiming a portion of a household expense (in my case, rent, electricity, internet access, mobile phone) then make sure that you can justify it. You should be able to point out a dedicated work space and space used for storing materials that the business uses. In my case I live in a small apartment and my stock actually takes up a fair bit of space, so 15% of my rent is allocated as a business expense (the balance is still well above the full rent assistance threshold). The end result in my case is a small profit or a small loss each quarter, but the benefit is in the deductions reducing my expenses such as rent.
Expect losses in the early months, but remember the ATO will let you carry forward those losses to future tax years and apply them to self-employment profits, so it can help to reduce taxable self employment income in the future once things take off.
I funded the whole enterprise using a Centrelink advance and some extreme belt-tightening. Watch out for Paypal and eBay fees, they can trim 15% off the sale price (which is of course a deduction). Before I purchase a batch of cables from China I have a small spreadsheet that calculates all fees, postage etc and then gives me a profit figure per 100 pieces sold - often I walk away from a particular product because it's not going to be worth it in the long run - so before you start the business make sure that it's going to make a profit - flogging cables is a lot less work intensive than painting so for me it's easier to judge.
Finally, start the business at the beginning of a quarter (1 Jan/1 Apr/1 Jul/1 Oct) as it makes it a lot easier to keep up your quarterly reporting requirements. Once your turnover (i.e. sales BEFORE any expenses/deductions) hits $75K you will need to register for GST. ABN registration is not compulsory but my understanding is that it will shortly be, or recently became compulsory. It doesn't cost anything and assuming that you are not registered for GST then there is no paperwork to do. When dealing with other businesses often they are asking for an ABN anyway, so a good idea to get it in place at the start - it can very easily be deregistered anyway.