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Deemed Income from Unlisted Public Securities, Delisted & Suspended Shares

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Unlisted public securities

Unlisted public securities are financial assets for deeming purposes whether or not:

  • they are held in Australia or overseas, or
  • dividends are paid.

The market value of unlisted public securities is combined with that of other financial assets for the calculation of deemed income. Actual dividends received are not counted as income.

For deeming purposes, unlisted public securities include shares in:

  • unlisted public companies, and
  • co-operatives.
Shares in unlisted public companies

The most common form of unlisted public securities are shares in public companies which are not listed on a stock exchange, but are available to the public. An 'unlisted public company' has the following characteristics:

  • it has at least five members whose names appear in the Company's Memorandum of Association,
  • there is no upper limit on membership numbers,
  • it can offer securities to the public,
  • there is no restriction on the transfer of shares, and
  • the company must have an auditor and file annual reports.

If a company does not meet these criteria, it may be a private company.

Shares in co-operatives

A co-operative is an organisation established for the mutual benefit of its members for some specific purpose such as making loans or providing goods and services such as a food co-operative, or co-operative building society. Pensioners who are members of a co-operative are shareholders, and they may receive bonus shares in place of the payment of a rebate for past purchases. This is a notifiable event.    

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Delisted and suspended company shares

Suspension or delisting of company shares can change the value of the security for deeming purposes, as described in the following table:

If the shares are...

Then the value of the security is...

Suspended from trading

the last sale price on the last day of trading.

Suspended securities remain subject to deeming.

Delisted, such as when a company is placed in receivership or liquidation.

The estimated return of capital per share as provided by the receiver or liquidator.


What obligations a pensioner has to notify DVA

Chapter 12.1

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According to section 5J(1) of the VEA a financial asset means;

 

Australia is defined in the Acts Interpretations Act 1901 and includes the following territories and Islands:

  • Christmas Island
  • Cocos (Keeling) Islands

Subsection 5Q(1) of the VEA provides specifically that the definition of Australia includes the external territories for many VEA purposes including Part III, IIIAB, some parts of Part IIIB, Parts IIID, VIIA, VIIC and sections 52ZO, 58A, and 132.  Norfolk Island is currently the only external territory of Australia. For the above VEA sections, which cover service pension, [glossary:income support supplement:118], pension bonus, pension loans scheme, Veterans supplement, pension supplement and Commonwealth Seniors Health Card purposes it is considered to be part of Australia. The test of residing in Australia does not by itself satisfy the full definition of Australian Resident, as residency also requires Australian citizenship or the holding of a specified visa.

Papua New Guinea and Nauru have both previously been external territories of Australia.  Lord Howe Island and Macquarie Island, formerly regarded as separate islands, are now part of mainland NSW and Tasmania respectively.