Deeming legislation
Recipients of social security benefits, are subject to pension and allowance income tests known as deeming. Deeming assumes that financial investments are earning a certain rate of income, regardless of what income is actually being earned.
The deeming rules apply to financial investments (eg. bank or term deposits, bonds, shares, managed investments etc).
However, please note that the LLL has exemption from the deeming rules and the following applies:
The actual interest rate applicable to a depositor's LLL deposit account will always be used to assess a depositor's level of government benefits. This means that the deeming rates DO NOT apply for investments with the LLL. However the deposit account must be a matching deposit to support a capital project of the Lutheran Church of Australia.
Although the LLL is exempt from the deeming rules for income purposes, monies deposited with the LLL must still be declared to Centrelink as an asset in assessing a person's benefits. In addition the actual interest earned must be declared for income taxation purposes.
This exemption is of greatest benefit to those LLL depositors with interest free accounts.
Click here for more Deeming information on the Centrelink website.
