Special Exemptions from Deeming

Last amended: 5 March 2010

Special exemption guidelines

The Minister can also exempt 'Saved' Loans and 'frozen' Unlisted Property Trusts.

Requests for exemption should be forwarded to the Investment Data Base Unit in Sydney, and recommendations are then made to the Minister.

Church and charitable institution exemptions

Prior to 1 January 2010 specific funds offered by certain church and charitable institutions were exempt from deeming.

From 1 January 2010, deeming exemptions ceased to be granted for new funds and for new investments placed into existing funds which had previously been granted a deeming exemption prior to 1 January 2010.

Pensioners who have already made investments in an exempt fund prior to 1 January 2010 will continue to have their original investment exempted from deeming and the actual interest earned counted as income under the income test.

If a pensioner puts more money into their exempt investment or makes a new investment with a church and charitable institution on or after 1 January 2010, the deeming exemption will only apply to the amount invested prior to 1 January 2010.

'Saved' personal loans and 'frozen' unlisted property trusts

The following two forms of investment, which were exempt from deeming before the July 1996 deeming changes, are now included in deemed income unless a pensioner can demonstrate financial hardship:

• low or zero interest 'saved' personal (family) loans made before 22 August 1990 to a:
• family member,
• private company and the pensioner or family member has a controlling or substantial interest, or
• family trust where the pensioner or family member has a controlling or substantial interest, and
• 'frozen' unlisted property trusts with a continuous restriction on access since 30 June 1996.

Very few pensioners hold these forms of investment. To be granted an exemption a pensioner must:

• at 30 June 1996, have claimed or been receiving a payment to which deeming now applies,
• taken reasonable action to maximise income, and
• be in financial hardship as a result of deeming.

Financial hardship for 'saved' personal loans and 'frozen' unlisted property trusts

For the purposes of deeming exemptions only, financial hardship is when a pensioner's total income, as a result of deeming, is lower than the maximum rate of pension or allowance, including rent assistance where applicable, that could be paid to the pensioner under the income test.

In this instance, total income is the sum of the following:

• any return from the investment for which exemption is claimed,
• deemed income from the pensioner's remaining financial assets,
• income from other sources, and
• the pensioner's current income test rate of pension or allowance.

Date of effect of exemption – 'saved' loans and 'frozen' unlisted property trusts

Requests for exemption from deeming for 'saved' loans or 'frozen' unlisted property trusts, are treated as an application for review of a decision, as described in the following table:

National Disability Insurance Scheme (NDIS) amounts

NDIS amounts held by, or on behalf of, an NDIS participant  to pay for future disability expenses under their NDIS plan are exempt from the deeming provisions of the income test.

Any actual returns that are earned, derived or received on NDIS amounts are exempt income and also exempt from deeming.