Centrelink

For the purpose of eligibility to the Age Pension, the various types of pension are treated differently by Centrelink for the assets test and income test.

Assets Test

• Lifetime and life expectancy pensions are not treated as assets for the purpose of the assets test, as they have pre-determined payments, are not commutable, and have no residual value. This is subject to adequate funding of the pensions, which must be actuarially certified on a yearly basis[1]

• Allocated pensions and pensions of limited increase do not necessarily have these characteristics, and generally are counted under the assets test.

Income Test

• Most types of pension are counted under the income test, using the actual amount of income received. Only pensions with a term of less than 5 years are subject to deeming.

For further details, see:

http://www.centrelink.gov.au/internet/internet.nsf/publications/fis016.htm

[1] See later section on actuarial certification of adequacy.