This topic contains information on the following:
Act reference: SSAct section 9(1)-'financial asset'
Deeming does NOT apply to payments made under the FAAct. The following table shows the payments that ARE affected by deeming.
Means tested pensions paid by Centrelink and DVA
- age pension
- wife pension
- widow B pension
- disability support pension
- carer payment
- service pension
Income support allowances
- newstart allowance
- youth allowance
- partner allowance
- austudy payment
- widow allowance
- parenting payment
- sickness allowance
- special benefit
Other income support payments and supplements
- exceptional circumstances relief
- income support under the flood assistance package
Deeming applies to financial assets, which consist of:
Example: Financial investments to which deeming applies include:
Act reference: SSAct section 9(4) For the purposes of this Act...
Policy reference: SS Guide 4.9.3 Asset-Tested Income Streams
The actual returns received (if any) from financial investments are not assessed under the income test unless the Minister exempts the investment from the deeming rules.
Act reference: SSAct section 1083(2) If, because of ...
Policy reference: SS Guide 18.104.22.168 Exemption of Financial Investments from Deeming
Deeming applies to the gross current value of a financial investment.
Example: An income support recipient purchases a financial investment using $10,500, of which $300.00 was an entry fee payment. The value of the investment is therefore $10,200. This is the amount to which the deeming rules apply.
Under the deeming rules encumbrances are not taken into account. The GROSS market value of a financial investment is used to assess deemed income for the income test.
Under the assets test, the value of the asset is the recipient's EQUITY in the asset.
Example: A person has listed securities with a current market value of $25,000 and a loan secured against these securities of $10,000. Deemed income is calculated using the market value of $25,000 while the assessed asset value under the assets test is $15,000.
Act reference: SSAct section 1072 General meaning of ordinary income
Policy reference: SS Guide 22.214.171.124 Encumbrances & Loans Against Assets
Last reviewed: 11 August 2011