Wendy has an account-based share portfolio and wants to know if deeming applies differently.
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Q. Wendy
I am a single, homeowner, age pensioner assessed under the asset test. I have a CHESS account-based share portfolio, mostly growth, that I revise on a regular basis with a bank account attached to it used for the share transactions and dividends only. Centrelink wants me to advise whenever my portfolio and bank account changes. At times this can be as often as monthly.
Centrelink normally revalues shares twice a year. In my case, revaluation occurs more frequently, whenever I advise them of a change.
If this portfolio and bank account value gradually increase over 12 months, does this mean that I am being compound deemed? If so, surely this is unfair compared to those who only have their shares deemed twice a year and if someone else managed this portfolio for me, it would be regarded differently and only assessed twice a year.
I am not a share trader but if I were, would it improve my situation? Would I then be assessed on income? The amount involved is $200K. I also have a superannuation balance of $300K.
A. It really depends on how long you have held this account.
Since 1 January 2015, the deeming provisions have applied to account-based income streams held by income support recipients aligning their treatment with the deeming provisions that apply to other financial investments. This includes account-based pensions and account-based annuities.
Account-based income streams held by income support recipients immediately before 1 January 2015 may be grandfathered and continue to be assessed under return of capital rules applying prior to 1 January 2015.
Regardless of how long you have had the account, you do not have compound deeming applied, as deeming will not be reassessed every time you update your details.
Do you understand the deeming rate rules?
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https://www.yourlifechoices.com.au/age-pension/news/minister-flags-review-of-pension-home
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