When are investments valued for deeming rates?

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Harry is confused about the dates deeming rates are applied in the income assessment and wants some clarification on the rules.

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Q. Harry
I am an age pensioner and a little confused on how to work out the deeming amount on an investment that may change during a financial year. For example, an investment may be valued at $100,000 on 1 July but after drawdown may only be valued at, say, $80,000 on 1 January. Is the start date for deeming calculations the first day of the financial year, or for investment balances on the last day of the financial year? If it commences on the first day of the financial year, is it calculated daily or fortnightly? When official deeming rates alter within the financial year, does the new rate apply for the whole of the financial year or only from the date that it changed?

A. Normally investments are valued on 20 March and 20 September each year.

However, due to the unusual circumstances caused by the COVID-19 pandemic, investments were also valued on 1 June this year to account for the downturn in financial markets.

Services Australia will get the new values from the latest unit prices they have or will ask you for the latest values, if required.

When deeming rates alter throughout the year, the government will announce when the new rates apply from. The last change to deeming rates took effect on 1 May this year.

Are your investments worth less due to the COVID-19 pandemic? Have you started receiving higher pension payments as a result?

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Written by Ben



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