Determining Severe Financial Hardship - Readily Available Funds

Last amended: What constitutes readily available funds

Readily available funds include cash on hand, financial institution accounts, term deposits, bonds, shares etc. Real estate, the family car and household contents are not considered readily available funds. When considering long term financial hardship, readily available funds include the surrender value of a life assurance policy, value of a second car or holiday home, etc. A person's readily available funds comprise:

• proceeds from the sale of non-liquid assets,
• financial assets, and
• some superannuation assets.

Allowable limits of readily available funds

The table below shows the readily available funds limits for eligibility under the financial hardship rules.

Note: These rates will increase in accordance with the statutory increases in pension rates in March and September each year.

Situations where available funds may exceed allowable limits

Readily available funds may exceed the allowable limits by up to 10% if:

• the person has imminent expenses, and
• these expenses will reduce readily available funds to below the limit.

In such situations, a delegate must review the case in three months to ensure that readily available funds are under the limit.

Readily available funds exclusions

A person's readily available funds do not include:

• shares held by a primary producer in a primary producers cooperative, where the shares must be maintained for primary production,
• shares in private companies, unless the articles of association or memorandum allow the shareholder to sell their shares,
• working capital, unless expenditure is not essential or regular,
• inaccessible overseas funds, accounts or investments,
• legally irrecoverable loans or debts,
• accounts or investments with liquidated companies or institutions, those in the process of being wound up, or those placed under a deed of company arrangement that have frozen access to funds,
• whole of life insurance and term policies, or
• investments in unlisted property trusts.

Superannuation assets

Superannuation assets are not readily available funds for a person who is:

• under 55 years of age, or
• over 55 years of age and assets are inaccessible.