4.6.5.75 Treatment of Superannuation & Roll-over Investments Under the Assets Test

Summary

This topic provides information on the following:

• the application of deeming to income from superannuation and roll-over investments for customers who have reached Age pension age, and
• exemption of specified superannuation and roll-over investments.

Other related topics include:

4.4.4.40 Deemed Income from Superannuation & Roll-over Investments

4.8 Superannuation Funds

4.9 Income Streams

General application of deeming

Superannuation and roll-over investments are treated differently depending on the age and circumstances of the customer as described in the following table.

Act reference: SSAct section 9(1B) Without limiting the generality of…the following are managed investments, section 9(1C) The following are not managed investments

Policy reference: SS Guide 4.9 Income Streams

Exemption of specified superannuation & roll-over investments

In a very small number of cases, the Minister for FaHCSIA grants exemptions for superannuation assets from this policy.

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

Between 20 September 1997 and 1 July 2001, customers of age pension age and customers aged between 55 years of age and age pension age, who had received income support for at least 39 weeks after reaching age 55, had their superannuation assets assessed under deeming provisions.

From 1 July 2001 only customers of age pension age have their superannuation assets assessed under deeming provisions.

Explanation: Some customers of age pension age may be able to gain an exemption.

Example: Female customers of age pension age, but not yet 65, and still working more than 10 hours per week may be able to obtain an exemption on the grounds that they cannot access their superannuation investment.

Exemptions are considered if:

• a fixed term superannuation investment is inaccessible because of a contract entered into before 20 August 1996. Exemptions will not be provided where the initial term of the contract commenced before 20 August 1996, expired after 20 August 1996, but has been extended, OR
• the superannuation investment is inaccessible because the rules of the superannuation fund in place at 20 August 1996 prevent release. The rules preventing access must have been in place before 20 August 1996 for the exemption to apply. Any additions made to the fund after 20 August 1996, apart from the earnings of the fund, would not qualify for an exemption, OR
• the superannuation investment is inaccessible because of 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, OR
• a traditional endowment or life superannuation contract was entered into before 20 August 1996. To qualify for an exemption, the contract must not have been varied since 20 August 1996. Additional contributions after 20 August 1996 are allowed if they were specified under the terms of the contract as at 20 August 1996, OR

The following guideline was also applicable before 1 July 2001:

• benefits are preserved in the NSW State Authorities Superannuation Scheme (SASS), the Local Government Superannuation Scheme (LGSS) or the Electricity Industries Superannuation Fund (EISS), until the fund member reaches age 58. Exemptions will only be provided where a person preserves their SASS, LGSS or EISS benefit on resignation, discharge or dismissal from employment, and the withdrawal of the benefit before age 58 would mean that the person suffers a significant financial penalty through loss of part or all of the employer financed benefit payable at age 58.

Act reference: SSAct section 1118B Value of superannuation investments determined by minister to be disregarded

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Last reviewed: 6 March 2006