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.

1.1.T.101 Threshold day

Usage

This definition applies to all payments.

Definition

For asset-tested income streams (lifetime) (1.1.A.304), the threshold day is the day the minimum assets test assessment steps down from 60% of the purchase amount (1.1.P.495) to 30% of the purchase amount.

Act reference: SSAct section 1120AB(3) Value of income stream

Policy reference: SS Guide 4.9.3.35 Means test assessment of asset-tested income streams (lifetime)

Determining a person's threshold day (where the person is not a reversionary beneficiary)

A person's threshold day in relation to their asset-tested income stream (lifetime) is worked out using the following method:

Step Action
1 Determine the life expectancy of a 65 year old man, rounded down to the nearest whole year, that applied on the person's assessment day (1.1.A.280) (see table below).
2 Increase the number at Step 1 by 65.
3 If the income stream is not a joint income stream, the person's threshold day is the later of the following days:

  • the day before the person reaches the age in years worked out in Step 2
  • the last day of a 5 year period beginning on the person's assessment day.
4 If the income stream is a joint income stream, the person's threshold day is the later of the following days:

  • the day before the oldest of the joint owners reaches the age in years worked out in Step 2
  • the last day of a 5 year period beginning on the person's assessment day.

Act reference: SSAct section 1120AB(9) Threshold day

Policy reference: SS Guide 4.9.3.35 Means test assessment of asset-tested income streams (lifetime)

Determining a person's threshold day (where the person is a reversionary beneficiary)

If an asset-tested income stream (lifetime) reverts to a person as a reversionary beneficiary, and the original owner had passed their assessment day before the income stream reverted, then the threshold day is the same threshold day the original owner of the income stream would have had.

If this calculation results in a threshold day before the reversionary beneficiary's assessment day, then the person's threshold day is the person's assessment day.

If an asset-tested income stream (lifetime) reverts to a person as a reversionary beneficiary, and the original owner had not yet passed their assessment day before the income stream reverted, then the threshold day for the reversionary beneficiary is worked out in the same way as for those who are not reversionary beneficiaries using the method statement above.

Act reference: SSAct section 1120AB(10) Value of asset-tested income streams (lifetime) that are not managed investments

Policy reference: SS Guide 4.9.3.35 Means test assessment of asset-tested income streams (lifetime)

Relevant life expectancy of a 65 year old man

The following table shows the relevant life expectancy of a 65 year old man to be used when determining a person's threshold day. The relevant life expectancy is determined with reference to the most recent Australian Government Actuary Life Tables.

If the person's assessment day, in relation to the income stream, is in the period … then the relevant life expectancy of a 65 year old man is …
1 July 2019 to 31 December 2020 19.22 years.
1 January 2020 to present 19.86 years.

Act reference: SSAct section 1120AB(9) Threshold day

Social Security (Number of expected years) Instrument 2019

Policy reference: SS Guide 4.9.3.35 Means test assessment of asset-tested income streams (lifetime)

Last reviewed: