Last amended: 13 May 2008
The pension valuation factor [2] used depends on the:
The indexation rates range from less than 1% to 8%. The pension valuation factors reduce as the age of the pensioner increases. Each factor covers an age range of 5 years:
Pension valuation factors are used to determine the asset value of asset tested defined benefit income streams. However, under Commission determinations 10, 11 and 12 of 1998 and 5 and 6 of 1999, all defined benefit income streams are asset test exempt.
The following table shows how to select the appropriate indexation rate column from the pension valuation factor table.
Note: Where the income stream [2] is indexed at greater than 8% each year, the pension valuation factor will be determined by the Secretary of FaHCSIA [2].
If the income stream is indexed... |
Then the pension valuation factor will be... |
to movements in salary |
listed in the 7% but less than 8% column of the following table. |
to movements in a price index published by the Australian Government Statistician |
listed in the 6% but less than 7% column of the following table. |
at discretion of trustees of a super fund which has been in existence or has been making payments for less than a continuous period of five years |
listed in the 6% but less than 7% column of the following table. |
at discretion of the trustees of a super fund which has been in existence or has been making payments for more than a continuous period of five years |
calculated by first adding together the indexation factors declared by the trustees over the past five years and then dividing the result by five to get the five year average. The relevant pension valuation factor will be listed in the column which corresponds to the five year average. |
The following table shows the pension valuation factors for pensioners according to their age next birthday and the indexation rate for a pensioner's income stream.
Age |
Indexation rate for person's income stream |
||||||||
8% |
7% but less than 8% |
6% but less than 7% |
5% but less than 6% |
4% but less than 5% |
3% but less than 4% |
2% but less than 3% |
1% but less than 2% |
Less than 1% |
|
20 or less |
34 |
27 |
22 |
19 |
16 |
14 |
12 |
11 |
10 |
21-25 |
32 |
26 |
22 |
18 |
16 |
14 |
12 |
11 |
10 |
26-30 |
30 |
25 |
21 |
18 |
16 |
14 |
12 |
11 |
10 |
31-35 |
28 |
23 |
20 |
17 |
15 |
13 |
12 |
11 |
10 |
36-40 |
26 |
22 |
19 |
16 |
14 |
13 |
11 |
10 |
9 |
41-45 |
23 |
20 |
17 |
15 |
14 |
12 |
11 |
10 |
9 |
46-50 |
20 |
18 |
16 |
14 |
13 |
11 |
10 |
9 |
9 |
51-55 |
18 |
16 |
14 |
13 |
12 |
11 |
10 |
9 |
8 |
56-60 |
15 |
14 |
12 |
11 |
10 |
10 |
9 |
8 |
8 |
61-65 |
12 |
11 |
11 |
10 |
9 |
8 |
8 |
7 |
7 |
66-70 |
10 |
9 |
9 |
8 |
8 |
7 |
7 |
6 |
6 |
71-75 |
8 |
7 |
7 |
7 |
6 |
6 |
6 |
5 |
5 |
76-80 |
6 |
6 |
5 |
5 |
5 |
5 |
4 |
4 |
4 |
81-85 |
4 |
4 |
4 |
4 |
4 |
4 |
3 |
3 |
3 |
86-90 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
2 |
2 |
91-95 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
96-100 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
101+ |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
A factor used to calculate the notional asset value of a defined benefit income stream.
A defined benefit income stream is an income stream [2] where the payments are not fully determined by a purchase price [2]. Instead, payments are made with reference to a set formula based on:
According to subsection 5J(1) of the VEA [3], an income stream includes:
but does not include any of the following:
Department of Families, Housing, Community Services and Indigenous Affairs. Now known as the Department of Social Services.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16332%23comment-form
[2] https://clik.dva.gov.au/%23
[3] http://clik.dva.gov.au/legislation-library