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Income from Other Investments
Income from financial investments
Income from financial investments including cash, deposits accounts, managed investments, listed securities, loans, unlisted securities, gold, silver, platinum bullion, and asset-tested short term income streams is assessed using the deeming provisions.
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Income from superannuation fund investments
Superannuation fund investments are assessed in a variety of ways depending on whether or not the owner has attained pension age and whether or not withdrawals are made from the investment prior to the owner attaining 55 years of age.
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Income from income streams
Income from income streams is subject to the income streams assessment rules.
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According to section 5J of the VEA, a financial investment means:
- available money,
- deposit money,
- a managed investment,
- a listed security,
- a loan that has not been repaid in full,
- an unlisted public security,
- gold, silver or platinum bullion,
- an asset tested income stream (short term) ; or
- an asset tested income stream (long term) that is an account‑based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
- an asset‑tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection (1G);
but does not include an investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008) or a designated NDIS amount.
In 1990 the government introduced legislative changes called “deeming” to simplify the assessment of cash deposits and income from certain investments. These changes were made:
- in response to pensioner concerns about complex income and assets test rules;
- to encourage pensioners to maximise their private income.
Deemed income is the minimum rate that the government expects income support pensioners to earn from investments.
Banks created “pensioner accounts” which paid interest at the deeming rate set by the government.
On 1 July 1996 further changes meant the deeming rate was applied to all financial assets as defined in section 5J(1) of the VEA.
Currently, the pension age for a veteran is 60 years of age (VEA 5QA).
The pension age for a non-veteran is determined by the table below:
Date of birth (both dates inclusive) | Age Pension age |
1 July 1952 to 31 December 1953 | 65 years and 6 months |
1 January 1954 to 30 June 1955 | 66 years |
1 July 1955 to 31 December 1956 | 66 years and 6 months |
On or after 1 January 1957 | 67 years |
According to subsection 5J(1) of the VEA, an income stream includes:
- an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or
- an income stream arising under a public sector scheme (within the meaning of that Act); or
- an income stream arising under a retirement savings account; or
- an income stream provided as life insurance business by a life company registered under section 21 of the Life Insurance Act 1995; or
- an income stream provided by a friendly society (within the meaning of the Income Tax Assessment Act 1996); or
- an income stream designated in writing by the Commission for the purposes of this definition, having regard to the guidelines determined under subsection 5J(1F) of the VEA;
but does not include any of the following:
- available money;
- deposit money;
- a managed investment;
- an investment in a public unit trust;
- an investment in an insurance bond;
- an investment with a friendly society;
- an investment in a superannuation fund;
- an investment in an approved deposit fund;
- an investment in an ATO small superannuation account;
- a listed security;
- a loan that has not been repaid in full;
- an unlisted public security;
- gold, silver or platinum bullion; or
- a payment of compensation in relation to a person's:
- inability to earn, derive or receive income from remunerative work; or
- total and permanent disability or incapacity.
According to subsection 5J(1) of the VEA, an income stream includes:
- an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or
- an income stream arising under a public sector scheme (within the meaning of that Act); or
- an income stream arising under a retirement savings account; or
- an income stream provided as life insurance business by a life company registered under section 21 of the Life Insurance Act 1995; or
- an income stream provided by a friendly society (within the meaning of the Income Tax Assessment Act 1996); or
- an income stream designated in writing by the Commission for the purposes of this definition, having regard to the guidelines determined under subsection 5J(1F) of the VEA;
but does not include any of the following:
- available money;
- deposit money;
- a managed investment;
- an investment in a public unit trust;
- an investment in an insurance bond;
- an investment with a friendly society;
- an investment in a superannuation fund;
- an investment in an approved deposit fund;
- an investment in an ATO small superannuation account;
- a listed security;
- a loan that has not been repaid in full;
- an unlisted public security;
- gold, silver or platinum bullion; or
- a payment of compensation in relation to a person's:
- inability to earn, derive or receive income from remunerative work; or
- total and permanent disability or incapacity.