9.5.1 Overview of Deeming Provisions

Scope and operation of deeming

Deeming was introduced to encourage pensioners to maximise their total disposable income by investing to gain returns of at least the deeming rate. Current deeming rates represent the returns that are generally available in safe investments. Deeming refers to how income from financial assets is assessed for income test purposes and applies to most DVA and Centrelink payments. Under the deeming provisions the current deeming rates are applied to investments and the actual income is not counted.    More →

Exemptions from deeming

Some financial investments can be exempted by the Minister from the deeming provisions. Under certain conditions, exemptions are granted where an investment is not returning income and there is no access to the investment capital. The poor performance of a fund is not sufficient grounds for exemption. If a deeming exemption is granted, the investment is assessed under the normal income and assets test rules. Where an exempt investment produces an indirect benefit to the pensioner, any valuable consideration that arises may be regarded as income.

Deeming of savings investments and deprived assets

Specific provisions apply to deemed income from the following:    More →

• cash and accounts,
• loans, bills, notes, debentures, bullion and equalisation deposits,
• government and semi-government bonds,
• certain superannuation account-based income streams,
• certain lifetime income streams, and
• proceeds from the sale of property including the principal home.    
  More →

   

  Constitutes a principal home

  9.5.4/Description - Sale of Principal Home or Other Property

   

  More → (go back)

Deeming also applies to deprived assets over $10,000.    More →

Deeming of shares investments

Different provisions apply to deemed income from shares investments, depending on whether they are:

• listed securities, derivative investments or foreign shareholdings, or
• unlisted public securities, delisted or suspended shares.    More →

   

  Application of deeming to shares investments

  Section 9.5.5

   

  More → (go back)

Deeming of managed investments

Managed investments, generally, involve individuals investing in a company or trust which uses the combined investments to purchase and manage larger investments on behalf of those individuals. The investments are often in the form of insurance and superannuation products and unit trusts. The method of assessing deemed income from these investments varies according to its type.    More →

Deeming of superannuation account-based income streams

From 1 January 2015 new account-based income streams may be regarded as financial assets and have deemed income calculated on the current account balance if:

• the income stream commenced on or after 1 January 2015, or
• the owner of the income stream has not continuously received an income support payment since 31 December 2014.

Commonwealth Seniors Health Card holders may also have income from account-based income streams deemed from 1 January 2015.  For further information see 5.7.3 CSHC Income Test.

Lifetime income streams

Asset-tested lifetime income streams purchased on or after 1 July 2019 which were purchased with non-superannuation monies, are considered managed invetments and deemed before the 'assessment day' (prior to payments commencing or the owner reaching pension age).  After the assessement day, they are no longer considered managed investments and other rules apply, see 10.5.4 Means Test Assessment of Lifetime Income Streams.