Renting out a home owned by a trust

[nztiberius]

Hi there,

Thanks Keith for the info. Yeah, probably not the best idea to put too much info online, but wasn't really sure where to find out the info.

Many thanks.

[Keithw]

Firstly, be aware that this is a very public forum, so be careful what you are making public.

WINZ will ask you for all income you receive, and you are right, the average WINZ worker will not understand the workings of a trust, but there are staff at head office that should.

The law requires most benefits to be asset & income tested, so in the case of unemployment you will be entitled to $194 pw as long as you have less than x amount of other income coming from other sources.
There can also be standdown periods for redundancy, and any redundancy payouts are also included in your income/ asset calcs
In order to qualify for additional benefits like accomodation suppliment, the asset test applies, and if you have personal assets of more than about 8k (excluding your personal house, but including holiday houses, shares, ownership of companies -LAQC or otherwise, even boats i think)it will prevent you from obtaining additional benefits.
Since your house is in a Trust, it is not your asset,
so there is no need to complicate issues. you do need to declare any income that the trust pays to you, that is not capital distribution, assuming the trust will actually end up with a Net surplus.
If the rent does not cover the costs, then the Trust will not be paying you any income will it.
Also, as you say it is the choice of the trust as to when any distributions, if any, are made, so timing is important.
WINZ may ask to see the Trust accounts for personal trusts, they certainly do for an LAQC.
There may not be justification asking for accounts from a trust in which you are solely a beneficiary.

What they are also looking for in the case of a business (not sure it applies for a Trust but could do thru gifting or loans you have made to the trust) is the shareholders current account, as in their eyes, if the company owes you a bunch of money (ie you have been supporting it) then that is an asset that you will eventually be repaid - whether practical or not- the company may become bankrupt, but it is still an investment that you have.

Like everything in this country, if you blow all your income and save nothing, the state will pay you $500 - 600 pw to enjoy yourself with. If you tried to provide for yourself, you are expected to live off those provisions, or sell of any assets to support yourself & the state will pay you the very minimum !

WINZ have some discretion in the case of hardship, but you need to be honest with them. They have crossmatching agreements with all sorts of Govt agencies if they choose to use them.

[nztiberius]

Thanks Keith. That's what I thought. :-)