DATE OF ISSUE: 24 AUGUST 1990
ESTATE MORTGAGE TRUSTS RE-ASSESSMENT OF UNIT ASSET VALUES
The purpose of this instruction is to advise current Commission policy in relation to the asset valuation of investments held in Estate Mortgage Trust Funds.
2.Currently approximately 840 DVA pensioners hold investment units with Estate Mortgage. Departmental computer records show that 64 of these pensioners are assessed under the Assets Test.
3.The policy on asset test valuations refers to the current market value which, for managed investments, is taken as the manager's buy back price. As the manager of these funds has suspended trading there is no buy back price available. However, these units still have a value as there is an expectation of trading resuming sometime in the future. DSS and DVA have agreed on a unit asset value to be maintained based upon estimates provided by the Macquarie Bank. The Macquarie Bank's values represent the most likely value achievable in 1993 and have been discounted by an inflation factor of 7% p.a. to reflect a present day value.
Names of the Trusts covered by this Instruction
4.Asset values to be applied to Estate Mortgage Funds until further notice are as follows:
ASSET VALUE PER UNIT
Estate Mortgage Income Trust No. 1 — 0.29c
Estate Mortgage Investment Trust — 0.51c
Estate Mortgage Depositors Trust No. 1 — 0.39c
Estate Mortgage Depositors Trust No. 2 — 0.47c
Estate Mortgage Depositors Trust No. 3 — 0.62c
Estate Mortgage Depositors Trust No. 4 — 0.80c
Manual Reassessment
5.Those pensioners holding these investments are to be re-assessed manually with arrears payable from 23 August 1990.No automatic update run was possible due to ADP system schedules.
6.All staff are reminded that as there is no real market for these products and that the Commission has decided that for the purpose of S55 these assets cannot be realised. Any individual who continues to be disadvantaged by this assessment can seek relief, subject to other conditions of eligibility, under the Asset Test Hardship Provisions. These provisions are designed specifically to assist pensioners who have valuable assets which cannot be sold or realised. Ongoing assessment of income from these trusts should have been suspended with effect from 12 July 1990 as per DI B27/90.
Pensioner Initiated Reviews
7.Pensioners who have written to the Department seeking reassessment of their service pension because of these investments should be reassessed as from the payday after receipt of the written advice, but not prior to 12 July 1990 in respect of income tested pensions and 23 August 1990 for asset tested pensions.
Contact Officer
8.The contact officer at Central Office for inquiries on this matter is Nigel Parmenter, Income Support, telephone(06) 2896444.
PETER HAWKER
NATIONAL PROGRAM DIRECTOR
(BENEFITS)