This topic provides brief information on the following:
From 4 November 2013 a deeming rate of 2% applies to the first:
A deeming rate of 3.5% applies to financial assets above these amounts.
The thresholds at which the higher deeming rate begins to apply are indexed in line with the CPI in July each year.
Deemed income is added to a recipient's assessable income from all other sources, and the total amount is then used to calculate the rate of income support payment under the income test.
Act reference: SSAct section 1076 Deemed income from financial assets-persons other than members of couples, section 1077 Deemed income from financial assets-members of pensioner couples, section 1078 Deemed income from financial assets-members of non-pensioner couples, section 1081 Deeming threshold, section 1083 Actual return on financial assets not treated as ordinary income, section 1084 Certain money and financial investments not taken into account, section 1084A Valuation and revaluation of certain financial investments
The deeming rates are determined by the Minister for Social Services under SSAct section 1082 and reflect rates of return available on a range of financial products.
Changes to the deeming rates are usually made in March or September, at the same time as pension indexation to avoid frequent changes in income support payments. However, the deeming rates can be changed at other times, if the returns in the financial market fluctuate significantly.
Act reference: SSAct section 1082 Below threshold rate, above threshold rate
Last reviewed: 4 November 2013