Things you should know

• You will be subject to an income test based on your adjusted taxable income but not an assets test and you must meet residence requirements to qualify for this card.
• Centrelink will include your account based income streams as part of the income test. Account based income streams include account-based pensions and account-based annuities. The balance of an account-based income stream is subject to deeming. Deeming assumes that financial investments are earning a certain rate of income.
• The current income test thresholds are determined by legislation which could change in the future
• You will be required to notify Centrelink of any changes in your circumstances both personal and financial within 14 days of the change occurring. This is an ongoing obligation.
• If eligible, you need to submit an application to Centrelink and will need to then keep Centrelink updated with all changes to your financial circumstances and living arrangements

What is deeming?

Deeming is the term which describes the method used by Centrelink and Veteran’s Affairs to calculate your assessable income from certain investments when determining the level of entitlement to be paid. Deeming means that you are assumed to earn a certain return on ‘financial’ investments, irrespective of the actual rate of interest or capital growth you earn. If you earn more than the deemed rate on your investments, the excess will not be included in the income test and will not affect your Centrelink payment. However, if the investment earns less than the deemed rate, you will still be assessed as earning income at the deemed rate. The income test then combines the deemed income with income earned from other sources you receive to work out your entitlements under the income test.

How does deeming work?

To work out the level of deemed income that your financial investments earn you simply apply the following rates in regards to the amount of total financial assets you hold. For the current deeming rates refer to : https://www.humanservices.gov.au/individuals/enablers/deeming

The Government changes the deeming rate from time to time to reflect market conditions and most financial institutions offer special accounts that pay interest at the deeming rate.

The Government changes the deeming rate from time to time to reflect market conditions and most financial institutions offer special accounts that pay interest at the deeming rate.