This section contains information on the assessment of personal assets and investments.
Last amended: 8 February 2013
VEA ? [3]
The net market value [4] of the personal effects and household contents of a person or a couple is assessed as being $10,000 unless the person satisfies the Commission [4] that the value of the assets is less than $10,000.
A person is always required to declare if the net market value of personal effects and household contents exceeds $10,000.
More ? [5]
VEA ? [6]
A person's estimate of the market value of their vehicle is accepted unless the valuation:
Vehicles include a motor vehicle, motor cycle, trailer, caravan (other than the principal home [4]), or boat (other than the principal home). Australian Government vehicles provided under the Vehicle Assistance Scheme however, are disregarded assets [4].
More ? [7]
VEA ? [8]
A deposit placed by a pensioner on a vehicle or on other personal assets, in order to acquire the asset, represents the pensioner's interest in that asset, and should be recorded as a non-financial asset. The deposit money is no longer accessible to the pensioner as available money, or as an accessible financial institution balance, and should no longer be deemed. If the asset purchase does not proceed and the deposit money is refunded to the pensioner, the deposit amount is then restored as a financial asset at that time.
The person's estimate of the value of cash on hand other than that held to meet day-to-day expenses is accepted.
More ? [9]
The market value of an asset [4] is the point at which a willing purchaser and a willing, but not anxious vendor, would reach agreement.
The market value of an asset is only decreased by the value of an encumbrance secured against it. The market value of an asset is not reduced by any costs which may be incurred if the asset was to be sold.
According to Section 179 [20]of the VEA [20], the Commission is a body corporate under the name of Repatriation Commission.
The principal home has the meaning given by subsection 5LA(1) [20] of the VEA and subsection 5LA(2) [20] of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.
A disregarded asset is one that is not included when calculating the value of a person's assets under the assets test, irrespective of its value.
For a full legislative definition see Section 52 of the VEA [21].
The credit balance held in any account with a bank, building society or credit union is an asset for pension purposes and is assessed at full face value.
For assessment purposes, a person's assertion as to the balance of an account is generally accepted. Account balances may also be verified by:
Income assessment of bank, building society and credit union accounts
Section 9.5.4 [18]
The following table explains how to assess the value of fixed term deposits, unlisted bonds, debentures and securities. An alternative value is accepted if a person provides supporting information.
More ? [26]
If the investment... |
then the assessable value is the... |
can be traded, |
market value [4]. |
cannot be traded, |
amount paid by a person for the investment. |
The assets value is the last sale price quoted in the financial press.
If the sale price is not quoted in the financial press, the assets value is the:
A 12% deferred interest bond of $100 has a value of:
The assets value for commercial bills is the:
The value of dingo bonds, digger bonds and zero coupon bonds can be obtained from the merchant bank or financial institution that issued them.
More ? [29]
The market value of an asset [4] is the point at which a willing purchaser and a willing, but not anxious vendor, would reach agreement.
The market value of an asset is only decreased by the value of an encumbrance secured against it. The market value of an asset is not reduced by any costs which may be incurred if the asset was to be sold.
Managed investments [4] include:
The assets value of a managed investment is the current market value.
Managed investments can be unit based or account based.
If the investment is... | then the asset value is worked out by... |
unit based | multiplying the number of units by the unit buy-back price stored on the DVA Managed Investment Database. More ? [37]
|
account based | buy-back value obtained from the fund manager. |
Note: The deeming provisions under the income test applies to managed investments.
More ? [38]
Unit buy-back prices are obtained each month for unit based managed investments from fund managers and stored on the DVA Managed Investment Database. Unit buy-back prices are updated in the middle of each month and reflect the last sale price for the last working day of the preceding calendar month. They are only applied to assessments:
The value of account based managed investments is only updated when the person notifies of a change in the value or the Department undertakes a revaluation. Pensioners are required to advise DVA if the value of their account based investments varies by more than $1,000.
Asset-tested lifetime income streams purchased on or after 1 July 2019 which were purchased with non-superannuation monies, are considered managed investments before the assessment day [40] (prior to payments commencing or the owner reaching pension age). The value is the purchase amount. If more than one amount has been paid, the purchase amount is the sum of those amounts, compounded using the ‘above threshold deeming rate’, less commuted amounts. More – see “Purchase Amount” in the Glossary.
After the assessment day, it is no longer considered a managed investment and other rules apply, see 10.5.4 Means Test Assessment of Lifetime Income Streams.
If a funeral bond does not meet the requirements to be an exempt asset [4], then the whole funeral bond is counted as an asset at its current value. Non-exempt funeral bonds are assessed as account-based managed investments.
More ? [41]
An investment is a managed investment if:
For a full definition see also:
Sections 5J(1A), 5J(1B) and 5J(1C) of the VEA [21].
A funeral bond is a managed investment [4] that will on maturity either offset or assist towards the payment of the funeral of the person or the person's partner. Up to two funeral bonds per person may be treated as exempt assets [4] if the combined amounts invested is within the funeral bond threshold [4].
A funeral bond cannot be exempt if the person has a prepaid funeral [4].
An exempt asset is one that is disregarded when calculating the value of a person's assets [4] under the assets test [4]. Examples of exempt assets include:
For a full legislative definition see section 52 of the VEA.
Last amended: 25 October 2006
VEA ? [52]
The assets value of public company shares is the current market value. Public company shares can be listed on the Australian Stock Exchange or be unlisted.
If the investment is... |
then the assets value is worked out by... |
listed on the Australian Stock Exchange |
multiplying the number of shares by the last sale price of the share stored on the DVA Share Database. |
unlisted |
multiplying the number of shares by the last sale price obtained from the company secretary. |
When determining a new claim for pension, the assets value of public company shares is the current market value as at the veteran's provisional commencement day [4] (where payability commences from this date). Where payability does not occur from the veteran's provisional commencement day, the current market value of shares should be concurrent with the date of grant. The updated share price, as available from the DVA Share Database and immediately preceding the date of grant, should be applied.
Last sale prices are obtained for every second Wednesday before pension payday for public company shares listed on the Australian Stock Exchange. Updated last sale prices are only applied to assessments:
Note: The values of unlisted shares, overseas shares and company issued options are only updated when the person notifies of a change in the value or the department undertakes a revaluation.
The assets value of overseas public company shares is the current market value. Overseas public company shares can be listed on a variety of international stock exchanges or be unlisted.
If the investment is... |
then the assets value is worked out by... |
listed on an overseas stock exchange |
multiplying the number of shares by the last sale price of the share converted into Australian dollars. |
unlisted |
multiplying the number of shares by the last sale price provided by the person converted into Australian dollars. |
The assets value of company issued options is the current market value. The assets value is worked out by multiplying the number of options by the last sale price of the option as quoted in the Australian Financial Review.
According to subsection 36B(1A) [20] of the VEA, a veteran's provisional commencement day is the day on which the veteran claims the age service pension [4].
VEA → [60]
The value of a person's interest in any property or real estate is assessable unless it is an interest in their principal home [4].
More → [61]
Real estate is valued using the person's estimate of the market value [4], unless:
Note: If the person's estimate of the market value is not used for the above reasons, DVA engages a qualified valuation service provider to provide an official property valuation. This valuation is obtained at no cost to the person.
If a person holds a lease over a property, the unexpired period of the leasehold may have a market value. A leasehold with a market value is an assessable asset [4]. If it appears that pension payability [4] or the rate of pension may be affected by the value of the leasehold, DVA can obtain a valuation from a valuation service provider.
Where a person owns a timeshare in property (for example in holiday apartments), the current market value of the timeshare is assessable. This is regardless of whether the person owns a fractional share of the property, or has purchased the timeshare by entering into a contract which provides them with the right to use the property on a regular basis. A delegate must be reasonably satisfied as to the current market value of the timeshare. Therefore, if the person has purchased the timeshare within the last 12 months, then the amount that the person paid for the timeshare may be accepted as the current market value. If the timeshare was purchased more than 12 months ago, then the client may need to provide details of the current sale price. This would then be the amount that is held in the pension assessment.
A valuation from a valuation service provider of the timeshare arrangement may be required, if:
When a person enters into a valid and legally binding contract for the sale of property or real estate, the property or real estate is no longer an assessable asset. Ownership is transferred to the purchaser as soon as:
Note: The property or real estate remains a person's asset until the contract is legally binding or all preconditions have been met.
The legal proof required to confirm the transfer of ownership is:
Sales between family members need to be examined in more detail to ensure that ownership of the property has been transferred to the purchaser. If the contract is not legally binding, the property or real estate is the person's asset. If the sale is for an amount less than market value, the deprivation provisions [4] may apply.
More → [62]
The value of any cash proceeds received by a person from the sale of a property or real estate is assessed as a cash asset. The value of any debt owing to the person is assessable. If the sale price of the property or real estate is below market value, deprivation provisions may apply.
More → [63]
Water rights are a legal and in most cases a saleable commodity. They are not attached to a specific land title, but rather belong to the owner of the title.
When a property with water rights is on a single title, the value of the water right is added to the value of the property to give a total value as an irrigated block. If the property is made up of multiple titles, the value of the water right is apportioned across all titles. This is done because if the water right is only added to one of the titles, all other titles are devalued as they can only be assessed as "dry land".
Historically, most states and territories bundled land property titles and associated water entitlements together. Under the National Water Initiative, water entitlements can be traded independently of land. This separation, known as unbundling, has been completed in many jurisdictions. This means that water rights are unbundled from each other, as well as being unbundled from land. Where a water right is sold separately to land title, it represents the sale of an asset, with the assessment being determined on what has happened to the proceeds of the sale.
If a special resident's entry contribution to a retirement village, or in acquiring a granny flat interest, exceeds the extra allowable amount, they are regarded as a homeowner. The entry contribution amount will be disregarded under the assets test, they will be subject to the lower assets value limit and will be ineligible for rent assistance.
If a special resident's entry contribution to a retirement village or in acquiring a granny flat interest is less than or equal to the extra allowable amount, they are assessed as a non-homeowner. The entry contribution will be assessable under the asset test, they will be subject to the higher assets value limit, and they may receive rent assistance, if otherwise eligible.
More → [64]
When a person decides to leave a retirement village [4], they may be entitled to a full or partial refund of their entry contribution [4].
The value of the refund owed to the person is:
Refund of the entry contribution may be delayed when a person leaves a retirement village. The delay may typically extend until the vacated unit is sold, or for the time period specified in the Residential Agreement (commonly 12 months), whichever is the shorter period. However, there are some instances where a Residential Agreement stipulates that the refund will be delayed, sometimes for a matter of years.
Where the entry contribution is not refunded for a period of time following departure from the retirement village, for the resident who is a 'homeowner' according to the special residence assessment rules, the entry contribution amount continues to be exempt until such time as it is received. Subject to the 2 year exemption limit when a person enters care, the un-refunded entry contribution amount continues to represent the person's right to live in the retirement village, and so retains the exempt status of a right or interest in a principal home providing reasonable security of tenure.
If there is a long delay in the person actually receiving the refund, then the amount may be regarded as either a loan or a sale agreement.
Example: On entering the retirement village and paying an entry contribution, a person signs a contract stating that they will not receive the refund due to them immediately. Instead, under the terms of the contract, the refund must be invested in a trust account managed by the retirement village for a period of 8 years. In this case, the outstanding amount will be regar — ded as either a loan, or a sale agreement, depending on the terms specified in the contract.
More → [66]
A refund of entry contribution may still arise where one member of a couple remains in the retirement village. This may occur where the residential contract provides for a full or partial refund where one person leaves. An example is where one person leaves to enter aged care.
The refunded amount may not necessarily be half of the amount originally held as the couple's entry contribution. This may occur, for example, where the individual residence contribution of each member of the couple on entering the retirement village was different. A reassessment of the entry contribution amount for the person remaining in the retirement village may be required.
More → [67]
VEA → [68]
Compensation and insurance payments received by a person for loss of, or damage to buildings, plant or personal effects are a disregarded asset for 12 months from the date that the payment was received.
Insurance or compensation payments can include:
9.5.4/Deemed income from savings investments [80]
9.5.4/Description - sale of principal home or other property [81]
Disregarded insurance or compensation payments
Section 52(1) (o) [69] VEA
Insurance payments applied to rebuilding
Section 52(1) (oa) [69] VEA
The principal home has the meaning given by subsection 5LA(1) [20] of the VEA and subsection 5LA(2) [20] of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.
The market value of an asset [4] is the point at which a willing purchaser and a willing, but not anxious vendor, would reach agreement.
The market value of an asset is only decreased by the value of an encumbrance secured against it. The market value of an asset is not reduced by any costs which may be incurred if the asset was to be sold.
One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL). [86]
One element of the means test [4] for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their income increases above a certain threshold known as the income free area (IFA) [4].
Assets value limit is the maximum value of assets a person can have without affecting the person's pension rate. The assets value limit is worked out in accordance with SCH6-F3 of the VEA [21].
An asset means any property, including property outside Australia.
Payability refers to whether or not a pension or benefit is payable to a person. A person may meet the basic eligibility criteria for a pension or benefit but that pension or benefit may not be payable to them for a number of reasons such as:
According to subsection 5M(3) of the VEA [20], premises constitute a retirement village if:
An entry contribution is the amount paid or agreed to be paid by a person for the right to live in a:
If a person lives in a home subject to a sale leaseback agreement, the entry contribution is the balance of the amount still to be paid by a buyer, at the date of a sale leaseback agreement.
Refer to Section 52M of the VEA for the full definition.
Last amended: 10 August 2007
VEA ? [88]
Money loaned by a person is an assessable asset. The assessable value is the amount still owed to the person. If the loan was made by the person before 22 May 1986 it is assessed in the same way as a loan made after this date. Loans are financial assets and are deemed.
Loans represent a contractual agreement between the parties, involving an offer, acceptance, agreed consideration, and shared intent regarding the conditions of the loan. If misrepresentation occurs in the making of the loan agreement, or if a party does not have a clear understanding of the terms of the agreement they are signing, the agreement may be challenged at law. Where legal action is being taken (for example, by a client's agent with power of attorney) to annul a loan agreement which was misrepresented to the client, or where the client was not competent to sign the agreement, the loan amount may be excluded from the pension assessment.
A loan made by a business partnership is assessed as an asset of the partnership. The value of the person's asset is assessed in the same proportion as the value of their share in the partnership.
If a failed loan still exists, the loan can be:
When a loan has been repaid the loan no longer exists. In some circumstances a loan no longer exists even though it has not been repaid. When a loan no longer exists the assessable value is no longer the amount owed. However there may be some other type of asset, for example a debt. The assessable value of a debt is the recoverable value.
More ? [89]
A person does not dispose of assets merely by agreeing to be guarantor for a loan. However, if the borrower defaults on the loan, the guarantor becomes liable to repay the loan. The deprivation rules apply to the amount the person (guarantor) has repaid, from the date the guarantor repaid the loan (or had an asset sold to repay the loan).
The amount the person repaid is treated as a debt owing to the person. This means it is assessed as an asset of the person. The assessable value is the recoverable value. The deeming rules do not apply to debts as they are not financial investments [4].
If the person takes legal action against the borrower to recover the amount they repaid on the borrower's behalf, the deprivation rules do not apply.
According to section 5J of the VEA, a financial investment means:
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.
Last amended: 7 November 2007
The assessable asset value of an existing loan is the amount still owed to the person but does not include any interest payable on the loan. This applies whether or not the loan is performing to the terms of the loan agreement.
Loans may be secured against assets such as property. The value of the asset the loan is secured against does not affect the asset value of the loan.
If a failed loan still exists, the loan can be:
Whether a person can be assisted by the hardship rules or by a deeming exemption will depend on their particular circumstances.
The hardship rules may be used to disregard the value of an unrealisable asset such as a non-performing loan where the person has their rate of payment assessed under the assets test. A reduced assessable asset value can be applied to a loan when a company under administration is put into liquidation, or placed under a deed of company arrangement. Loans to the company are regarded as ceasing to exist from the commencement of administration, as long as this date is not more than 6 months before the person applies to access the financial hardship rules.
The reduced assessable asset value can be determined once a creditors' meeting has decided on liquidation of the deed. Income support payments can be reassessed and any arrears paid, backdated to the date when the company was place in administration.
A loan being disregarded under the hardship rules is still deemed to earn income. A deeming exemption should be applied for if this deemed income affects the rate of payment.
For a loan to be considered an unrealisable asset under the hardship rules the lender must have started to take the necessary action to have interest paid and/or to get back their capital. A loan can be treated as unrealisable even if at some future date the lender may be able to get some or all of their capital back.
Where the person has their rate of payment assessed under the income test they may be able to have the loan exempted from deeming. A loan exempted from deeming is not deemed to be receiving income. A deeming exemption does not change the asset value of the loan.
More → [94]
Legally, a loan ceases to exist at the time it is repaid, or when the debtor is formally released from the loan contract under a bankruptcy, or where the loan is forgiven, or if the loan is legally irrecoverable.
More → [95]
For income support purposes, there are some other situations where a loan is also treated as no longer existing. Although there is no longer a loan there may be another type of asset, such as a debt.
Loans which still exist are assessed using the amount still owed, whereas debts are assessed using the recoverable value.
More → [96]
A loan no longer exists for income support purposes when:
Under the hardship provisions, loans to a failed company can be regarded as ceasing to exist from the date the company was placed in administration, as long as this date is not more than 6 months before the person applies to access the financial hardship rules.
In limited circumstances, where a loan does not fulfil the above criteria, it may still be able to be considered a failed loan if it can be shown that the loan is effectively irrecoverable.
Assessing an asset as effectively irrecoverable does not require, for example, that the company to which the Director’s loan was given must be officially bankrupt or wound up, but it will mean something more than the company being in financial trouble.
For example, where the finances of the company are in such a condition as to make the short-term future of the company untenable, it is more likely that we can consider the Director’s Loan failed.
However, the presumption should always be that if the company is still in existence and aspires to continue to do business as an ongoing concern, that the asset is still hypothetically realisable and therefore the loan should be continued to be held in assessment.
A pensioner may consider they have made a particular sort of investment, including lending money to a company or individual for a specific purpose. In some instances where fraud is involved this arrangement may be a sham. The money may not have been invested but taken for personal use.
Some fraudulent arrangements are complex and involve forged documents or moving money through a number of companies. In the initial stages some fraudulent schemes pay interest to investors so it may be some time before the real nature of the scheme is identified.
Until legal processes have established that fraud has definitely occurred the pensioner may be able to be assisted by a deeming exemption or the hardship rules. Once it has been established that the money has been misappropriated and no investment exists, no asset value is maintained.
Some defrauded investors may be able to take action for compensation for some or all of their loss of capital. The possibility that they may qualify for this type of assistance is not an asset.
The following are assessed as life insurance policies:
These products have an investment component and may have a surrender value. Whereas, products such as term insurance, trauma insurance, total and permanent disablement insurance, income protection insurance and business insurance cover do not have an investment component or surrender value.
A life insurance policy is an assessable asset of a person if the person:
During the term of the policy, a life insurance policy is an asset (but not a financial asset at this stage) and is prima facie assessable only under the assets test. It remains an asset until such point as it is withdrawn (via surrender or maturity). At this point the difference between the surrender/maturity value and the sum of the purchase price and the premiums paid over the life of the policy would be held as income over 12 months.
Where a life insurance policy is transferred to a third party (commonly a child), the life insurance policy will become a deprived asset, and, subsequently, a financial asset (per the definition in s5J(1) of the VEA). It would then be deemed appropriately.
The assessable value of a person's life assurance or insurance policy is the surrender value of the policy UNLESS:
In this situation, the value of the life insurance policy is the higher of:
VEA: section 52CB.
If the person or their insurance company cannot provide the value of the policy, the following formula is used to estimate the surrender value of the policy.
Assessable value = number of years that the person has had the policy X annual premiums paid.
If the estimated surrender value will affect or is likely to affect the person's rate of payment, the person must obtain the actual surrender value from their friendly society or insurance company.
More → [104]
A person's 'partner' is someone who is a member of a couple with that person.
Last amended: 29 April 2009
Generally, the beneficiary of a will does not automatically obtain an interest in any asset [4] forming part of the deceased estate. In the majority of cases, the beneficiary will only obtain an interest in assets in a deceased estate as a result of the administration of the estate, usually by the executor.
If a person notifies DVA [4] that they may have an interest in a deceased estate the decision maker should obtain the following information from the person:
VEA ? [111]
Any share in a deceased's estate is not an assessable asset until it is transferred into the name of the beneficiary. It is only when the executor of the estate has arranged to transfer a particular asset into the name of the beneficiary that the beneficiary gains any interest in that asset for the purposes of the assets test. Each case needs to be assessed on its facts to determine the date at which each individual asset was transferred into the name of the beneficiary.
If the estate has not been distributed twelve months after the death of the testator and DVA is aware that a person may have an interest in the estate, the case should be investigated to determine:
Section 52(1) (h) [10] VEA
An asset means any property, including property outside Australia.
The Department of Veterans' Affairs.
Last amended: 11 November 2008
The first $40,000 of an unspent home equity conversion [4] loan is a disregarded asset for ninety days only. If after ninety days a person has not spent the loan, the amount is an assessable asset [4].
More ? [116]
A person gets a home equity conversion loan of $40,000. They spend the loan in forty five days. The loan is disregarded for the full forty five days.
A person gets a home equity conversion loan of $70,000. They do not spend the loan within ninety days. Therefore:
After ninety days the total loan amount is assessable under the assets test.
Where the lending institution provides home equity conversion loans through a line of credit, the ninety day assets test exemption applies to the first $40,000 only and a subsequent drawing down on the line of credit does not receive a further ninety day exemption.
eg. a home equity loan provides for an initial lump sum amount of $40,000 to be used within ninety days, with further funds then accessible through an approved line of credit. The further funds accessed do not receive a ninety day exemption.
According to section 5H(1) of the VEA [20] a home equity conversion agreement, in relation to a person, means an agreement under which the repayment of an amount paid to or on behalf of the person, or the person's partner, is secured by a mortgage of the principal home of the person or the person's partner.
An asset means any property, including property outside Australia.
Private annuities [4] do not satisfy the definition of an income stream [4] as they do not meet the requirements for prudential regulation. Private annuities [4] are an assessable asset [4]. Each private annuity is a unique contract that must be assessed on its particular merits and an actuarial value is required in all cases.
More ? [120]
An actuarial valuation of a person's private annuity is required to determine:
Actuarial valuations are required because private annuities are usually family arrangements which are not determined by financial markets.
An initial actuarial valuation of a person's private annuity is required when the:
Additional actuarial valuations of a person's private annuity are required when the:
The Australian Government Actuary can supply an actuarial value. The Actuary must be supplied with all the relevant details of the annuity including:
The following table shows additional information requirements.
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If one of the parties is a... |
also provide... |
Trust |
a copy of the trust deed. |
Company |
|
Partnership |
a copy of the partnership agreement and accounts. |
The assets value of the private annuity should be re-assessed on each anniversary of the initial payment. For DVA purposes the reduction in the annuity's value is made in arrears by the amount of the annual payments.
If a person forgoes a payment, the value of the annuity is still reduced. Income deprivation provisions may also apply.
More ? [122]
Generally when a person disposes of an income producing asset without adequate consideration [4], the assets value is maintained and deemed. It would be 'double-dipping' to also assess the forgone income as income deprivation. Therefore assets deprivation provisions only are applied if a person:
A private annuity is a legally binding contract between two parties where one party provides an income in exchange for payment or valuable consideration. An example of this is where a person agrees to “sell” a property holding .As payment for receipt of the property the purchaser agrees to pay the person individual annuities which usually have a total stated purchase price equivalent to the value of the transferred property.
According to subsection 5J(1) of the VEA [20], an income stream includes:
but does not include any of the following:
A private annuity is a legally binding contract between two parties where one party provides an income in exchange for payment or valuable consideration. An example of this is where a person agrees to “sell” a property holding .As payment for receipt of the property the purchaser agrees to pay the person individual annuities which usually have a total stated purchase price equivalent to the value of the transferred property.
An asset means any property, including property outside Australia.
For adequate financial consideration to be received when disposing of an asset [4], a person must receive value in the form of money or assets. Adequate financial consideration can be accepted when the amounts received reasonably equate to the market value of the asset. It may be necessary to obtain a valuation from a property valuation service provider.
When disposing of income [4], in order for adequate financial consideration to be received, the person must receive money, goods or services which approximate in value to the rate of disposed income. If a person disposes of an income producing asset and receives adequate financial consideration in money or money's worth for the asset, then it can be accepted that they have received adequate financial consideration for the disposal of both the income and the asset.
Overseas annuities do not satisfy the definition of an income stream [4] as they do not meet the requirements for prudential regulation. Overseas annuities are an assessable asset.
More ? [129]
The initial asset value of an overseas annuity is the purchase price. The purchase price should be re-assessed on each anniversary of the initial payment. For DVA purposes the reduction in the annuity's value is made in arrears by the amount of the annual payments.
Generally when a person disposes of an income producing asset without adequate consideration [4], the assets value is maintained and deemed. It would be 'double-dipping' to also assess the forgone income as income deprivation. Therefore assets deprivation provisions are only applied if a person:
According to subsection 5J(1) of the VEA [20], an income stream includes:
but does not include any of the following:
For adequate financial consideration to be received when disposing of an asset [4], a person must receive value in the form of money or assets. Adequate financial consideration can be accepted when the amounts received reasonably equate to the market value of the asset. It may be necessary to obtain a valuation from a property valuation service provider.
When disposing of income [4], in order for adequate financial consideration to be received, the person must receive money, goods or services which approximate in value to the rate of disposed income. If a person disposes of an income producing asset and receives adequate financial consideration in money or money's worth for the asset, then it can be accepted that they have received adequate financial consideration for the disposal of both the income and the asset.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16559%23comment-form
[2] https://clik.dva.gov.au/user/login?destination=node/16368%23comment-form
[3] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn283
[4] https://clik.dva.gov.au/%23
[5] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn284
[6] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn285
[7] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn286
[8] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn287
[9] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn288
[10] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[11] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn283
[12] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1022-determining-value-asset/assessing-assets-encumbrances-and-loans
[13] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn284
[14] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn285
[15] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/923-additional-assessment-rules-certain-types-residences/mobile-home
[16] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn286
[17] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn287
[18] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/954-deeming-savings-investments
[19] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn288
[20] http://clik.dva.gov.au/legislation-library
[21] http://www.comlaw.gov.au/Series/C2004A03268
[22] https://clik.dva.gov.au/user/login?destination=node/16440%23comment-form
[23] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn289
[24] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn289
[25] https://clik.dva.gov.au/user/login?destination=node/16443%23comment-form
[26] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn290
[27] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn291
[28] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn292
[29] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn293
[30] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn290
[31] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments
[32] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn291
[33] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn292
[34] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn293
[35] https://clik.dva.gov.au/user/login?destination=node/16490%23comment-form
[36] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn294
[37] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn295
[38] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn296
[39] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn297
[40] https://clik.dva.gov.au/glossary/assessment-day
[41] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn298
[42] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn294
[43] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/952-general-provisions-deeming/investment-information-systems
[44] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn295
[45] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments/deemed-income-other-managed-investments
[46] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn296
[47] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/97-statutory-increases
[48] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn297
[49] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1023-disregarded-assets/disregarded-assets-relating-deceased-estates-and-funeral-expenses
[50] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn298
[51] https://clik.dva.gov.au/user/login?destination=node/16456%23comment-form
[52] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn299
[53] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn300
[54] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn301
[55] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn299
[56] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn300
[57] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/955-deeming-shares-investments
[58] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn301
[59] https://clik.dva.gov.au/user/login?destination=node/16341%23comment-form
[60] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn302
[61] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn303
[62] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn304
[63] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn305
[64] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn306
[65] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn307
[66] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn308
[67] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn309
[68] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn310
[69] https://www.comlaw.gov.au/Series/C2004A03268
[70] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn302
[71] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/922-basic-principles-assessment/principal-home
[72] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn303
[73] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/96-deprivation-income-and-assets
[74] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn304
[75] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home/sale-or-deprivation-home
[76] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn305
[77] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/special-residence-basic-assessment-rules
[78] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn306
[79] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn307
[80] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/954-deeming-savings-investments/deemed-income-savings-investments
[81] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/954-deeming-savings-investments/description-sale-principal-home-or-other-property
[82] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn308
[83] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/entry-contribution
[84] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn309
[85] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn310
[86] http://clik.dva.gov.au/glossary/assets-value-limit-avl
[87] https://clik.dva.gov.au/user/login?destination=node/16525%23comment-form
[88] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn311
[89] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn312
[90] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn311
[91] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1024-assessing-personal-assets-and-investments
[92] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn312
[93] https://clik.dva.gov.au/user/login?destination=node/16362%23comment-form
[94] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn313
[95] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn314
[96] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn315
[97] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/953-exemptions-deeming/general-exemptions-deeming
[98] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn313
[99] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1023-disregarded-assets
[100] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn314
[101] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn315
[102] https://clik.dva.gov.au/user/login?destination=node/16446%23comment-form
[103] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn316
[104] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn317
[105] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments/income-life-insurance-products-conventional-policies
[106] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn316
[107] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments/deemed-income-life-insurance-products-regarded-managed-investments
[108] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn317
[109] https://clik.dva.gov.au/user/login?destination=node/16458%23comment-form
[110] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn318
[111] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn319
[112] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn320
[113] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn318
[114] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn319
[115] https://clik.dva.gov.au/user/login?destination=node/16371%23comment-form
[116] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn325
[117] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation
[118] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn325
[119] https://clik.dva.gov.au/user/login?destination=node/16562%23comment-form
[120] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn326
[121] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn327
[122] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn328
[123] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/105-income-streams
[124] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn326
[125] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts
[126] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn327
[127] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn328
[128] https://clik.dva.gov.au/user/login?destination=node/16372%23comment-form
[129] https://clik.dva.gov.au/book/export/html/16559#tgt-cspol_part10_ftn329
[130] https://clik.dva.gov.au/book/export/html/16559#ref-cspol_part10_ftn329