Financial and non-financial assets in Age Pension estimates.
Age Pension calculators need to separate financial assets from non-financial assets. Both can affect the assets test, but financial assets can also create deemed income under the income test.
One asset list is not enough.
A simple total-assets number can hide the reason an Age Pension estimate changed. Financial assets can count under the assets test and also create deemed income. Non-financial assets can count under the assets test but are not normally deemed.
Common asset types.
Financial assets
Bank accounts, savings, cash, term deposits, shares, ETFs, managed funds and assessable super are examples that can create deemed income.
Non-financial assets
Cars, caravans, boats, household contents, personal effects, investment property and some business assets may count under the assets test.
Why two households with the same assets can differ.
Two households may each have $500,000 of assessable assets. If one household has most of that in financial assets, deeming may create more income-test pressure. If another household has more non-financial assets, the assets test may be the main issue instead.
- Separate financial assets before checking deeming.
- Separate homeowner and non-homeowner status before checking thresholds.
- Compare both the assets-test and income-test estimates.
- Flag unusual assets for official checking.
Common mistakes.
Only using a total
A total asset number can miss deeming pressure.
Ignoring non-financial assets
Non-financial assets can still count under the assets test.
Missing assessable super
Super treatment can change around Age Pension age.
Forgetting home status
Homeowner status changes the threshold used.