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.

4.9.5.60 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.

AgeIndexation 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 less82604535282321191614
21 to 2574554233272220191614
26 to 3066514032262120181614
31 to 3558463730252119181513
36 to 4051413328232018171513
41 to 4544363025221917161413
46 to 5038322723201716151312
51 to 5532272421181615141311
56 to 6026232018161414131211
61 to 6521191715141212111010
66 to 70161514121111101098
71 to 7512111010988877
76 to 809988777766
81 to 856655555444
86 to 904443333333
91 to 953333333333
96 to 1003222222222
101+1111111111

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

Last reviewed: