126.96.36.199 Pension Valuation Factors for Defined Benefit Income Streams
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 188.8.131.52 Income Test Assessment of Asset-Test Exempt Income Streams, 184.108.40.206 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|