4.4.1.60 Deeming Rate Calculation - Age Couple

Recipient description/situation

John and Mary are both Age recipients with a combined total of $90,000 in financial investments. $25,000 is in a term deposit, $15,000 is in a credit union account and they have $50,000 worth of managed investments.

Calculation

The following table shows the deemed income calculation.

Step Action $

1

Determine the value of the recipient's total financial assets:

  • Add financial investments and deprived assets

RESULT: value of total financial assets

90,000.00

2

Is the value of total financial assets less than the relevant threshold?

  • If YES, multiply the value by 1.75% to obtain the total deemed income (go to step 5).
  • If NO, multiply the threshold by 1.75%.

RESULT: below threshold amount = $85,000.00 × 1.75%

1,487.50

3

Determine the unused value amount:

  • Value of total financial assets
  • Less threshold

RESULT: unused value amount

90,000.00
85,000.00
  5,000.00

4

Multiply the unused value amount by 3.25%

RESULT: above threshold amount

162.50

5

Determine the total deemed income:

  • Add the below threshold amount and the above threshold amount = $1,487.50 + $162.50

RESULT: total deemed income

1,650.00

How deemed income is used

The total deemed income is added to any assessable income John and Mary have from other sources to calculate how much they can be paid under the income test.

Last reviewed: 5 November 2018