Assessing sole trader assets 043-03110060

Most payments made under the Social Security Act 1991 are subject to a means test. A means test includes an Assets Test. The assets of a sole trader business are assessable assets of the owner. The amount to be taken into account for Assets Test purposes is the current market value of the assets, less the allowable business liabilities (debts) listed on the business's balance sheet.

When assessing the assets of a sole trader business, there are some points to note:

• Debts secured against a principal residence are not allowable liabilities unless they were borrowed for primary production purposes (for example, to provide funding for a farming business rather than purchasing a farm which includes a customer's home)
• Current market value of assets should be used which won't always be the value on the balance sheet
• Some customers use their sole trader business as a structure to buy and sell shares and other investments. Not all of these sole traders will be considered to be carrying on a business, as this determination is based on the frequency and objective of the share trading
• Financial assets on the business balance sheet, except for the principal business bank account are considered a customer's personal assets. These should be recorded separately on SVS, SIS or MIS with income from them assessed under the deeming provisions. Sole trader businesses are not legally required to produce a balance sheet for the Australian Taxation Office (ATO), so a list of assets and liabilities for the business should be requested

Service Officers and Complex Assessment Officers (CAOs) must use the correct date of event (DOV) for business income and assets.