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.

4.4.2 Deeming of Financial Investments


This section provides information about the categories of financial investments which are subject to the income test deeming rules. The current market value of the investment is used to calculate the amount of deemed income.

Financial asset Additional information
Afforestation projects

If the investor is NOT carrying on a business then the arrangement must be examined to establish if it is a managed investment and therefore a financial asset.

Explanation: If the investor is carrying on a business alone or with other participants and there is a direct investment in an identifiable area of land and associated commodities, then it is not a financial asset.

Bank bills, commercial bills, and promissory notes

The value of bank bills, commercial, and promissory notes is the amount paid by the income support recipient to purchase the investment.

Example: An income support recipient buys a $100.00 promissory note for $80.00 and redeems it for $100.00 on maturity, therefore receiving a $20.00 profit.

Bullion investments


  • gold, silver, platinum bars,
  • ingot and nugget holdings,
  • coins, medals and decorations containing those metals.

Explanation: Bullion held for investment purposes is a financial asset. Jewellery or contemporary Australian currency which contains gold, silver or platinum, or coins, medals or decorations containing those metals held for non-investment purposes are not bullion.

Cash deposits

Cash amounts including cash on hand and in safety deposit boxes.

Explanation: Income support recipients are not required to advise Centrelink of reasonable amounts which they are holding to meet day-to-day living expenses. Judgement will need to be exercised in determining what is reasonable.

Conventional life insurance products

Conventional life insurance policies during the life of the policy are not financial assets or subject to deeming; however, after maturity, any portion that is not withdrawn is regarded as a financial investment.

Act reference: SSAct section 1073 Certain amounts taken to be received over 12 months

Policy reference: SS Guide Income from life insurance products

Debentures and unsecured notes

Debentures are loan certificates secured by a lien over assets of the borrower.

Unsecured notes are loan certificates not secured by any assets.

Explanation: The asset value of a debenture or unsecured note listed on a stock exchange is the market value. Where the investment cannot be sold until maturity, the face value of the investment is assessed.

Delisted and suspended shares

Suspension or delisting of company shares can change the value of the security for deeming purposes.

Explanation: Suspended from trading - the most recent value given to the shares by the administrator is used. In the absence of any such official information the last sale price on the last day of trading is used.

Delisted due to compulsory acquisition by another company - the last sale price on the last day of trading is used then the sale price on the first day of trading of the security under the new name after confirmation of the acquisition is used.

Delisted due to receivership, administration or liquidation - the last sale price quoted on the last day of trading is used until official notification is received from the company secretary, liquidator or administrator on the current price of the security.

Delisted due to trading as an unlisted company - the market value of the security is used for deeming.

Policy reference: SS Guide Assessing Shares in Private & Unlisted Public Companies - Not Assessed Under Trusts & Companies Rules

Deprived assets

Assets that a person destroys, disposes of, or reduces in some way WITHOUT receiving adequate financial consideration. Generally deprivation occurs when the asset is given away as a gift. The value of the deprived asset (less the allowable gifting amount) is subject to deeming.


  • Gifting of assets (1.1.A.290) to a trust (1.1.T.180).
  • Shedding of assets by a private company (1.1.C.220) or a family trust in which a person has a controlling interest.
  • Surrender of a life interest.
  • Transfer of a farm.
  • Transfer of the title to their home.
  • Transfer of money for accommodation such as a granny flat.
  • Purchase of an annuity from family members.

Explanation: Any actual income lost as a result of the disposal of an income-producing asset is ignored.

Act reference: SSAct section 23(14) …the following is a family member in relation to a person…

Policy reference: SS Guide 4.1 Deprivation of income & assets

Farm management deposits

The balance in the fund is the value that is deemed.

Explanation: Farm management deposits are a means by which those operating in the rural sector can smooth out their taxable income over a number of years. Farm management deposits are commercially available deposit account offered through authorised deposit taking institutions such as banks, credit unions and building societies. The scheme provides primary producers with a tax-linked savings option, which helps build cash reserves for difficult years.

Policy reference: SS Guide Assessable Income & Assets from Primary Production

Government and semi-government bonds (GSGB) Securities issued by a federal, state or local government authority. The market value of bonds changes in response to market conditions, particularly changes in interest rates.
Income streams

Two types of income streams are included under deeming:

  • short term annuities with a term of 5 years or less (asset-tested income streams (short term)), and
  • from 1 January 2015, account-based income streams, which includes account-based pensions and account-based annuities.

Note: Annuities which are not account-based are not included in the deeming provisions and will continue to be assessed under the return of capital rules (i.e. gross annual income less deduction amount), see

Policy reference: SS Guide Scope of deeming, Means test assessment of asset-tested income streams (long term)

Interest rate products

Money on deposit including bank, building society and credit union accounts.


  • home loan offset/mortgage saver accounts,
  • savings accounts,
  • cheque accounts,
  • interest bearing deposits,
  • term deposits.

Explanation: Deeming applies to home loan offset accounts but does NOT apply to a line of credit accounts.

Listed securities

Listed public securities on a stock exchange including exempt stock markets, either held in Australia or overseas and whether dividends are paid or not.

General listed securities:

  • Examples:

    • shares,
    • contributing or partly paid shares,
    • deferred dividend shares,
    • preference shares,
    • company options,
    • convertible, non-convertible and capital notes.
  • Explanation: Shares from company employee plans or schemes and derivative investments are NOT financial assets until the shareholder becomes the legal owner.

Derivative investments:

  • Examples:

    • futures contracts,
    • exchange traded options,
    • warrants,
    • share ratio contracts.

Foreign shareholdings:

  • Payment received by a person in foreign currency.
  • Foreign listed securities values are converted to Australian dollars.
  • The latest CBA on-demand airmail-buying rate is generally used to determine the value of foreign shareholdings.
    • Explanation: SSAct section 1100 allows Secretaries (or their delegates) to provide for how the value of a payment received by a person in a foreign currency is to be determined.


  • bonds,
  • bank bills, commercial bills and promissory notes,
  • loans to family members,
  • loans to trusts or companies,
  • loans to any other individual, group or corporation,
  • debentures.

Explanation: The value of a loan is the amount of principle outstanding.

Loans made by income support recipients to their own sole trader or partnership structures are NOT included as loans for deeming purposes. These are in effect 'loans to oneself' and are instead regarded as injections of capital and taken into account accordingly in the assessment of business income.

Act reference: SSAct section 1122 Loans

Managed investments

Also known as 'managed funds', 'pooled investments' or 'collective investments', where money is pooled together with other investors or used in a common enterprise and a 'responsible entity' operates the fund.


  • cash management trusts,
  • property trusts,
  • Australian equity (share) trusts,
  • agricultural schemes (e.g. horticulture, aquaculture, commercial horse breeding),
  • international equity trusts,
  • timeshare schemes,
  • actively managed strata title schemes.
Managed life insurance investments

These are considered to be managed investments.


  • unbundled insurance policies,
  • universal plans,
  • insurance bonds,
  • friendly society bonds,
  • savings plan equivalents.
Ostrich and emu farms

Managed investment scheme - investors whose funds are pooled and who do NOT hold specific livestock as their own investment. These schemes ARE managed investments and ARE financial assets.

Explanation: Speculative investments are not financial assets. Share farming schemes are businesses unless the investor is NOT carrying on a business and the arrangement is a managed investment.

Overseas managed investments


Managed investments held overseas are financial assets.
Private unit trusts

Private unit trusts are a financial asset if they meet all the criteria for a managed investment.

Explanation: If a private unit trust does not meet ALL of the criteria for a managed investment (e.g. if an investor in a private unit trust exercises control over the management of the invested assets) then it is NOT a managed investment and is NOT a financial asset.

Public unit trust investments

Whether they are listed on the stock exchange or not, they are treated as managed investments (1.1.M.25).


  • common funds,
  • cash management trusts,
  • mortgage trusts,
  • bond trusts,
  • property trusts,
  • equity and imputation trusts.
Sale and principal home or other property

Explanation: If the proceeds are held in the form of a financial investment they are a financial asset for income test purposes.

If a principal home is sold and the proceeds are to be used to purchase, build, rebuild, repair or renovate another principal home then they MAY be exempted from assets testing for up to 12 months, or up to 24 months if certain criteria are met. See for additional details.

Act reference: SSAct section 11A(1) Principal home, section 1118(2) For the purposes of this Act…

Sale of property agreement

Usually there are separate sale and loan agreements and little doubt about whether the agreements create a loan.

Explanation: If there is NOT a separate loan agreement then it is considered a sale agreement.

If the contract uses terms that suggest the existence or setting up and commencement of a loan, or a mortgage agreement exists which is expressed to be security for a loan then it is considered to be a loan agreement.

Amounts outstanding under sale agreements are not financial assets. However, if the arrangement is regarded as a sale agreement and NOT a loan, but provides for interest to be payable on the outstanding balance of the purchase price, the interest payable is assessed as income.

Policy reference: SS Guide 4.6.4 Assessing special residences & aged accommodation

Superannuation and roll-over investments

Superannuation and roll-over investments are treated differently depending on the age and circumstances of the person:

  • if the person has reached age pension age then their superannuation or roll-over investment is a financial asset,
  • if the person is LESS than the pension age then their superannuation or roll-over investment is a disregarded financial asset and is NOT assessed.

Explanation: In a very small number of cases the Minister for DSS provides exemptions for superannuation assets.

The Minister is the only person with the legislative power to exempt a superannuation investment.

Exemptions are considered if all of the investment cannot be accessed where:

  • the rules of the superannuation fund prevent release, OR
  • there is a legislative bar. This may arise where a person cannot access their superannuation because they do not satisfy any of the 'conditions of release' specified in the superannuation regulations. There may also be other circumstances where a legislative bar prevents access to a person's superannuation benefits, such as a Family Law Court decision.

Act reference: SSAct section 1084(1) Certain money and financial investments not taken into account, section 1118A Value of superannuation investments determined by Minister to be disregarded

Policy reference: SS Guide Treatment of superannuation & roll-over investments under the assets test, 4.8 Superannuation funds, 4.9 Income streams

Unlisted public securities

Shares in public companies which are not listed on a stock exchange, but are available to the public whether they are held in Australia or overseas, or dividends are paid.


  • shares in unlisted public companies,
  • shares in co-operatives.

Explanation: Persons who are members of a co-operative are shareholders and they MAY receive bonus shares in place of the payment of a rebate for past purchases.


  • food co-operative,
  • co-operative building society.

Last reviewed: