Many small businesses operate under a Discretionary Trust structure where the business owners take Distributions rather than Wages.
These Trust’s may have employees and those employees are paid wages, potentially making the employer eligible for the JobKeeper payment in respect to those employees.
However, what about the business owners themselves?
If their business has seen a decrease in turnover, potentially down to $0, these business owners cannot pay themselves.
Despite all of the payments that have been announced under the stimulus packages, they are currently ineligible personally for these payments as they are not an employee and they are not a sole trader.
So how are these business owners meant to pay themselves?
After many discussions with my peers in this industry, it is very clear that there is no guidance on this at all. Just speculation.
I was at a bit of a loss on how to find out more information so I contacted the office of Andrew Laming MP to bring this to his attention as this effects so many local businesses. I also contacted my professional body, CPA Australia for this same reason.
Unfortunately, CPA Australia has not come back to me just yet.
However, Andrew Laming MP was kind enough to phone me this morning. I explained the circumstance that many of my clients are facing and he asked me to provide him with a written example of what I was referring to so that he could discuss the matter with Treasury. Mr Laming came back to me late this afternoon as he was able to have those discussions with Treasury today.
Mr Laming has confirmed that this isn’t a matter that has been legislated on yet.
As frustrating as it may be not to have this legislation, what it means is that you can rest assured that we aren’t missing vital information at this point.
Once legislation is passed, hopefully over the next week or so, we will be able to advise precisely if trust beneficiaries are entitled to these payments.
We will be in touch with all of our clients that operate their businesses out of a Discretionary Trust as soon as legislation is passed.