Many of us have one type of hobby or another, whether that be gardening, building Lego, painting or making candles. Hobbies can provide lots of benefits through giving a sense of community and engagement, motivation and purpose, and just plain enjoyment.
Sometimes we are fortunate enough to find that someone wants to pay us for what we’ve made from our hobby. The scented candles are bought to be used as a gift, the potted plants sold to a workmate who saw them and wanted one, or the piano lessons for a neighbour’s child.
Hobby to self-employment
How does Services Australia assess the income and assets of a hobby, and when do we need to be advised?
When it comes to hobbies, the first question is ‘when does it move from a hobby to self-employment?’ What we need to know is whether you have undertaken activities to make a profit, even in a small way.
If the intention from your hobby is to make a profit, then this is considered self-employment. We will look at your net income, that is your income less allowable expenses, as well as your business assets.
What if your hobby is just for fun? Let’s look at the assessment of any assets associated with doing your hobby first.
As it’s a hobby and not a business, any equipment you have to support this hobby, such as musical instruments, computer hardware, or arts and crafts tools, should all be included in your estimation of the value of your household contents and personal affects. Your hobby equipment falls under personal affects and should be added to everything else in your estimate of its value.
Remember, when it comes to estimating the value of your household contents, we’re looking at what you’d get if you sold it today. We aren’t after replacement value or insurance value, but a realistic estimate of what people would pay for your second-hand goods.
Making money
I want to point out that unless there’s a change in the value of your assets, you don’t need to tell us about your hobbies. It’s different though if you start getting money from your hobby.
When it comes to assessing income from your hobby, if you are not intending to make a profit, then the gross payment you’ve received, that is, the payment without any deductions for expenses, is assessed. It’s maintained as income on your record for 12 months from when you were paid.
Work Bonus may be applied to business income that has been earnt through active participation. Work Bonus doesn’t apply to hobby income.
Remember that if you’re getting a payment from us, you need to tell us about getting income from your hobby within 14 days. You must also tell us about any income from self-employment. You can tell us online through myGov, the myGov app or Express Plus Centrelink app. You can also call us or visit your local Service Centre.
Do you derive income from a hobby? We’d love to hear about it in the comments section below?
Also read: Travelling overseas? Here’s what to do about your Centrelink payments
If I were to sell something from my hobby for a few bob I am not going to tell anyone as it might be the difference between paying my power bill or not.