Last amended: 10 October 2007
VEA → [2]
Unrealisable assets are deemed to produce a notional income. The notional annual rate of ordinary income is assessed separately for each unrealisable asset.
A person's notional annual rate of ordinary income from an unrealisable asset is the lower of:
(i) If a person receives income from an unrealisable asset, special provisions apply.
(ii) Notional ordinary income is not calculated using this method if the unrealisable asset is a property and is occupied by:
If the occupier is a near relative or a long term tenant with a low income, the commercial lease value is calculated as 20% of the total income of the occupant (and partner) of the property. Total income includes all social security income support payments.
If the occupier is one partner of a separated couple, the notional ordinary income calculation depends on rental arrangements between the non-occupier and the occupier.
If the occupying partner: | Then notional income is: |
is paying rent to the non-occupier | t — he lesser of:
Example: bank charges are reasonable expenses |
does not have a rental agreement with the non-occupier | the lesser of:
Example: a pensioner that has a 50% interest in the home is taken to receive 50% of the commercial lease value |
refuses to pay rent to the non-occupying partner, pending property settlement | not calculated
Note: the non-occupier must produce clear evidence that an occupying partner refuses to pay rent – eg. a letter from a partner's solicitor |
If a pensioner receives income from an unrealisable asset, then notional ordinary income is:
Exception: The actual income received is used to calculate the rate under the hardship provisions if the actual income received is greater than calculated notional ordinary income.
For non-farming properties, the commercial lease value of an asset [3] is the value that can reasonably be obtained by using the asset. Generally this is the asset's market rental value.
For farming properties, the commercial lease value is assessed by the AVO [3]. Reassessment may be requested if the valuation does not sufficiently take into account any of the following:
Note: If the asset does not have commercial lease value then notional income for the asset cannot be assessed.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16858%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16858#tgt-cspol_part3_ftn300
[3] https://clik.dva.gov.au/%23
[4] clik://LEGIS/VEA/section 52Z(5)
[5] https://clik.dva.gov.au/book/export/html/16858#ref-cspol_part3_ftn300