Asset thresholds and formula to work out assessable income from assets
The thresholds for income from assessable assets are:
Household type | Asset threshold |
Sole tenant household | $2,700 |
All other household types | $5,400 |
Only income from assets over the asset threshold is included as assessable income. If an applicable person has assets under the threshold, and those assets are earning interest, you should not charge this as income.
Formula to work out assessable income from assets
The formula to determine the appropriate amounts is as follows:
Step 1: Work out the after tax weekly amount of any actual income acquired from the asset:
- get the total value of the assessable assets
- get the total annual after tax income of the asset
- divide the income amount by the asset amount = A
- minus total amount of the asset by the appropriate asset threshold = B
- multiply A by B
- divide this amount by 52
Step 2: Work out the estimated value of any income from the asset you should:
- get the total value of the asset
- minus the applicable asset threshold
- multiply this amount by 0.0284 or 2.84%
- divide this amount by 52
Step 3: whichever is the greater amount should be included as assessable income for Income Related Rent purposes.
Example of determining income from assets
John is a single client who has mortgage investments worth $80,000. John receives $734 after tax in dividends from the investment each year.
The asset threshold for John is $2,700.
Calculate the assessable income as follows:
Determine the amount to include as assessable income | Rate per week |
Step 1: | |
Total value of the assets | $80,000 = A |
Total annual after tax income of the asset | $734.00 = B |
Divide the income amount by the asset amount (= B divided by A). This will give you the income per $1 of asset. | $0.009 = C |
Minus total amount of the asset by the applicable asset threshold (= A minus $2,700) | $77,300 = D |
Multiply C by D | $695.70 = E |
Divide E by 52 | $13.37 = F |
Step 2: | |
Total value of the assets | $80,000 = G |
Minus the applicable asset threshold (= G minus $2,700) | $77,300 = H |
Multiply 0.0284 or 2.84% by H | $2,195.32 = I |
Divide I by 52 | $42.21 = J |
Get the greater amount of F or J | $42.21 = weekly amount to include in assessable income |
Deprivation of income
Where a client has directly or indirectly deprived themselves of property, you can consider adjusting the value of their assessable assets.
For more information see:
Legislation
- Assessable income may be adjusted in certain cases section 112 Public and Community Housing Management Act 1992
- Assessable assets schedule 2 Public and Community Housing Management Act 1992
- Assessable assets section 111 Public and Community Housing Management Act 1992
