Q. I currently receive a partial Age Pension that is reduced as a consequence of the Assets Test.  If one’s capital is in the share market, and its value obviously changes every second of every day, how and how often does the government calculate the amount I am entitled to receive?

A. As you are in receipt of a means tested benefit, you are obliged to inform Centrelink if you have purchased or disposed of assessible assets or received a gift or inheritance.

If financial assets owned directly by you (such as shares) change in value by more than $1,000, you are obliged to inform Centrelink within 14 days.  Assets above the accepted minimum threshold will reduce your pension entitlement by $1.50 for every $1,000.

For shares in Public Companies where the values will change on a daily basis, Centrelink applies a bulk valuation update to all benfit recipients in March and September each year.  This is done at the same time that Pension indexation increases are applied.  The value used is the latest available price on the sharemarket.

You are entitled to request a re-assessment of your benefits at any stage.  On request Centrelink will automatically update the latest market values for your shares and managed investments.

If you own company issued options or exchange traded options, Centrelink applies the value as reported by you.  The assessable value is the sale price at the time of re-assessment as reported in newspapers or the ASX.

If you trade Contract for Difference (CFD’s) at the end of each month you submit a profit and loss statement to Cetnrelink.  If you have made a profit or loss, the change in value is assessed accordingly.

You can notify Centrelink of a change in your assessble assets in person by phone, by mail,  via e-mail or online at www.humanservices.gov.au

 

Follow Andrew on Twitter @AndrewHeavenFP.  This article was originally published in The Australian.