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James is an Age recipient and Margaret is in receipt of PA with a combined total of $90,000 in financial investments. James has $30,000 in bank accounts, Margaret has $20,000 in a credit union account and they jointly have $40,000 in a managed investment.
The following table shows the deemed income calculation.
|
Step |
Action |
$ |
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1 |
Determine the value of the recipient's total financial assets. - Add financial investments and deprived assets. - RESULT: value of total financial assets. |
90,000 |
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2 |
Is the value of total financial assets less than the threshold? - If YES, multiply the value by 3% to obtain the total deemed income. - If NO, multiply the threshold by 3%. - RESULT: below threshold amount = ($74,400 x 3%). |
2,232 |
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3 |
Determine the unused value amount. - Value of total financial assets - Less threshold - RESULT: unused value amount. |
90,000 74,400 15,600 |
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4 |
Multiply the unused value amount by 4.5%. - RESULT: above threshold amount. |
702 |
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5 |
Determine the total deemed income. - Add the below threshold amount and the above threshold amount = $2,232 + $702 - RESULT: total deemed income. |
2,934 |
i) Calculate the couple's total combined income by adding the total deemed income to any income that James and Margaret have from other sources.
ii) Calculate 50% of the total combined income.
iii) Use the amount calculated in ii) to calculate the amount paid to James under the pension income test.
iv) Use the amount calculated in ii) to calculate the amount paid to Margaret under the allowance income test.
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Last reviewed: 11 August 2011
