Deemed Income from Superannuation & Roll-over Investments

Forms of investment that are classed as superannuation fund investments

Superannuation and roll-over investments include:

  • approved deposit funds,
  • retirement savings accounts, and
  • investments in superannuation funds from which an income stream is not being paid.

Pensioners may:

  • be members of government, industry or corporate superannuation funds, or
  • have their own fund, often referred to as a 'Do-It-Yourself' (DIY) fund.
Application of deeming to superannuation and roll-over investments

Superannuation and roll-over investments are treated differently depending on the age and circumstances of the pensioner as described in the following table.

If the pensioner...

Then their superannuation or roll-over investment is...

  • Is less than pension age (for ISS, is less than qualifying age).
  • exempt from the income and assets tests, and
  • not subject to deeming.

Note: Where a person is unable to access any part of their superannuation fund investment after they reach pension age, the value of their investment may be exempted from the income and assets tests. The pensioner must apply in writing for an exemption under Section 52AA of the VEA, stating why they cannot access any part of their superannuation investment. A copy of the Request for Income and Assets Test Exemption application form can be obtained from the Investment Database Unit.

Contributions to a superannuation fund after date of grant

The following table describes the treatment of additional superannuation fund contributions made by pensioners whose superannuation investments are being assessed:

 

If the contributions are made by...

Then...

A pensioner

The additional contributions, as they are made:

  • add to the balance in the fund, and
  • increase the value of the investment subject to deeming and the assets test.

A pensioner's employer

Only the amount that is paid by the employer as part of their obligations under the Superannuation Guarantee Contribution will be disregarded as income. All contributions add to the value of the financial investment for deeming purposes and the assets test.

Salary sacrifice of income for superannuation

They are considered to be income in the hands of the pensioner. All contributions add to the value of the financial investment for deeming purposes.

Investments owned by non-pensioner partners

The following table describes the assessment of investments owned by non-pensioner partners, for the purpose of working out the pensioner partner's entitlement:

 

If the non-pensioner partner is...

Then...

Less than pension age

all amounts in superannuation and roll-over investments owned by them are exempt from assessment. If they make a withdrawal prior to age pension age, no assessment is made of investment growth.

Pension age

superannuation and roll-over investments owned by them are assessable when working out the pensioner partner's entitlement, whether or not the non-pensioner partner claims pension.

Switching between superannuation fund investments – prior to pension age

Switching between superannuation fund investments is allowed. No realisation is considered to have occurred when the amount concerned is switched directly (i.e. rolled over) into another superannuation fund investment or income stream product.    

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Assessing withdrawals of superannuation benefits

10.4.3/General Provisions for Assessing Withdrawals of Superannuation Benefits

 

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Source URL: https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments/deemed-income-superannuation-roll-over-investments

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