The financial advisor can advise families with closely-held businesses of strategies that will enable a parent, who does not have earned income, to receive earned income from the business. This can be achieved by hiring the parent to work in the business. The benefit of both parents having earned income is to qualify for the employment expense allowance.
The parents increased their employment expense allowance by $4,000 by providing both parents with earned income. Since the parents income was assessed at 47% the increased allowance may increase the child’s financial aid eligibility by $1,880 ($4,000 x 47%).
If you are in a financial aid income assessment rate of 47%, you could increase your financial aid eligibility up to $470 for every $1,000 of employment expense allowance received by providing both parents with earned income.