Explaining how shares and dividends are assessed.
Bob is considering selling some shares and wants to know how that will affect his Age Pension payment.
I am on a full Age Pension and I am managing quite well, but I own some shares and would like to know the repercussion to the Age Pension if I sell some and take a profit. Will this affect my Age Pension? Also do the dividends I receive affect the Age Pension?
A. Both shares and any money held in a savings account are treated the same by Centrelink and are assessed under the income and assets test.
Under the assets test, the value of the financial asset is assessed and under the income test, the deemed income is counted.
Centrelink considers account-based investments, market-linked investments and some income streams to be financial investments.
Market-linked investments include: managed investments; shares and securities; bonds; notes and debentures; and superannuation if you’re over the Age Pension age.
For the assets test, Centrelink assesses income streams using their current account balance, while for the market-linked investments, it uses not their face value but their net market value – that is, the last trade or sale price of the investment, minus any loan.
When calculating the income from your investments, Centrelink applies the deeming rules. The deeming rules use the gross value of your investments to calculate the amount of deemed income that will be included in the income test.
Centrelink revalues market-linked investments, shares and securities each March and September.
- gets the new values from the latest unit prices it has, or
- asks you for the latest values.
Centrelink says you can ask it to revalue your investments at any time.
If you have a Centrelink question, send it to firstname.lastname@example.org and we’ll do our best to answer it, or find someone who can.
Will you be one of the 70 per cent of Australians who receive an Age Pension or will you miss out? The RetirePlanner™ tool has all the information you need.
Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.
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