220.127.116.11 Operation of deeming
This topic provides brief information on the following:
- calculation of deemed income, and
- changes to deeming rates.
Calculation of deemed income
To calculate a person's deemed income, deeming rates are applied to the total value of deemed assets held by the person.
A below threshold rate is applied to the amount of total deemed assets beneath the relevant deeming threshold. An above threshold rate is applied to the amount of total deemed assets above the relevant deeming threshold.
Current and historical deeming rates and deeming thresholds can be found in 18.104.22.168.
The thresholds at which the higher deeming rate begins to apply are indexed in line with the CPI in July each year.
Deemed income is added to a recipient's assessable income from all other sources, and the total amount is then used to calculate the rate of income support payment under the income test.
Act reference: SSAct section 1076 Deemed income from financial assets-persons other than members of couples, section 1077 Deemed income from financial assets-members of pensioner couples, section 1078 Deemed income from financial assets-members of non-pensioner couples, section 1081 Deeming threshold, section 1083 Actual return on financial assets not treated as ordinary income, section 1084 Certain money and financial investments not taken into account, section 1084A Valuation and revaluation of certain financial investments
Policy reference: SS Guide 22.214.171.124 Overview of deeming
Changes to deeming rates
The deeming rates are determined by the Minister for Families and Social Services under SSAct section 1082 and reflect rates of return available on a range of financial products.
Act reference: SSAct section 1082 Below threshold rate, above threshold rate