The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

4.9.5.50 Pension Valuation Factors for Defined Benefit Income Streams

Summary

This topic contains the pension valuation factor table used to calculate an asset value for defined benefit income streams (1.1.I.70) that are NOT EXEMPT from the assets test. This topic also covers the following matters:

  • a description of pension valuation factors,
  • the pension valuation factor table, and
  • treatment of cases NOT included in the table.

Explanation: The pension valuation factors were developed by the AGA's office. They have been set out in a disallowable instrument rather than legislation so they can be revised to allow for changes in variables.

Act reference: SSAct section 9(1)-'life expectancy', section 1120 Value of asset-tested income streams that are defined benefit income streams, section 1120(3)-'pension valuation factor'

Policy reference: SS Guide 4.9.2.30 Income Test Assessment of Asset-Test Exempt Income Streams, 4.9.3.20 Assets test assessment of asset-tested income streams

Description of pension valuation factors

The pension valuation factor used depends on the:

  • indexation rate of the defined benefit income stream, AND
  • age of the income support recipient.

The indexation rates range from less than 1% to more than 8%. The pension valuation factors reduce as the age of the income support recipient increases. Each factor covers an age range of 5 years:

  • starting at 20 years of age or less, and
  • finishing at the age ranges 96 to 100, and 100+.

Pension valuation factor table

The following table shows the pension valuation factors for income support recipients according to their age next birthday and the indexation rate for an income support recipient's income stream.

Age Indexation rate for person's income stream
Equal to or greater than 8% At least 7% but less than 8% At least 6% but less than 7% At least 5% but less than 6% At least 4% but less than 5% At least 3% but less than 4% At least 2.5% but less than 3% At least 2% but less than 2.5% At least 1% but less than 2% Less than 1%
20 or less 82 60 45 35 28 23 21 19 16 14
21 to 25 74 55 42 33 27 22 20 19 16 14
26 to 30 66 51 40 32 26 21 20 18 16 14
31 to 35 58 46 37 30 25 21 19 18 15 13
36 to 40 51 41 33 28 23 20 18 17 15 13
41 to 45 44 36 30 25 22 19 17 16 14 13
46 to 50 38 32 27 23 20 17 16 15 13 12
51 to 55 32 27 24 21 18 16 15 14 13 11
56 to 60 26 23 20 18 16 14 14 13 12 11
61 to 65 21 19 17 15 14 12 12 11 10 10
66 to 70 16 15 14 12 11 11 10 10 9 8
71 to 75 12 11 10 10 9 8 8 8 7 7
76 to 80 9 9 8 8 7 7 7 7 6 6
81 to 85 6 6 5 5 5 5 5 4 4 4
86 to 90 4 4 4 3 3 3 3 3 3 3
91 to 95 3 3 3 3 3 3 3 3 3 3
96 to 100 3 2 2 2 2 2 2 2 2 2
101+ 1 1 1 1 1 1 1 1 1 1

Act reference: Social Security (Pension Valuation Factor) Determination 2018

Last reviewed: