In: Finance
Discuss the impact of the deprivation rules in determination of a calculation for the Age Pension.
Deprivation provisions apply to a person who is assessed under the income test. The value of a disposed of asset must be recorded, even if it has no effect on the person's current entitlement. It may be necessary to obtain a valuation for the disposed of asset from a professionally qualified valuer appointed by Centrelink.
The value of several disposed of assets may cause a person's pension, benefit or allowance to be assets tested. The deemed income may cause an effect under the income test.
If a person disposes of income without disposing of assets, the actual amount of the income disposed of continues to be assessed indefinitely.
Example: If a person forgoes a contracted superannuation pension increase or foregoes a private annuity payment , then the rate of deprived income maintained continues to be assessed.
Where a person disposes of income and the income, or the right to income, is returned to the person, it may be appropriate to re-apply the social security act definition of disposal, to determine if the disposal of income actually occurred in the first place.
Where a disposal of income, or the right to income, is determined to have occurred and the income, or the right to income, is returned to the person, any deprived income ceases to be assessable from the date of the return to the person of the right to the income.