Primary production aggregation for partnerships 043-04100020

The main difference between a partnership and a sole trader business is that the customer has a part interest, but not the sole interest, in the assets of the business. The interest is reflected in the customer's equity of the partnership's funds. Centrelink adjusts the balance sheet in the same way for the normal assessment of a partnership, the exception being all the primary production assets and all the liabilities are aggregated. For more information, see Assessing partnership assets.

A customer's share of primary production assets or liabilities is determined on the basis of the adjusted balance of their capital account. The capital account is adjusted to include the current market value of assets and to disallow liabilities not allowed under the Social Security Act 1991. This means that if the customer's capital account shows a positive value, then that value is an assessable primary production asset. If the customer's adjusted capital account shows a negative value (deficit), then that value is an assessable primary production liability.

The customer's share of the net primary production assets or liabilities of the partnership must be aggregated (combined) with any other primary production assets or primary production liabilities attributable to the customer, for example, those owned personally outside the partnership, from another partnership, a private trust or private company.

Where a loan is used to purchase 100% of primary production assets (for example, used to buy a tractor) and the loan is secured over primary production and non-primary production assets (for example, the family home) the liability is still considered to be a 100% primary production liability. It is the purpose of a loan rather than the security arrangement that determines whether a liability is to be regarded as a primary production liability and therefore part of the aggregation calculation.

Apportionment is used where a loan relates to both primary production assets and non-primary production assets. An example is, the loan was obtained to purchase a farm and the customer's principal home. Only the portion of the loan relating to the primary production asset is used in the aggregation calculation.

Refer partnership aggregation assessments to a Complex Assessment Officer (CAO) to do,
see  Identifying and making suitable referrals to the Complex Assessment Officer (CAO).