Exempt Assets 108-04080020

An exempt asset is one that is disregarded under the Assets Test, irrespective of its value. All assets, other than those specified as exempt, are assessable.

Care must be taken when assessing a customer's entitlement, in that the exempt assets are disregarded but may have assessable income. For example, the proceeds from the sale of the principal home are an exempt asset, but the proceeds when invested are deemed for income (interest earned).

Pre-paid funeral expenses can also be exempt from the Assets Test. A pre-paid funeral is an advance payment by a customer for funeral services agreed by contract, with no limit to the amount a customer may invest. If the customer has a pre-paid funeral and a funeral bond, only the pre-paid funeral is exempt.

See Exempt Funeral Investments (Funeral Bonds) for assessment of pre-paid funeral expenses and funeral bonds.

Payments to customers for homes purchased under the ACT Government Loose-fill Asbestos Insulation Eradication Scheme or the NSW Voluntary Purchase and Demolition Program (for example homes insulated by MR Fluffy using loose fill asbestos) are to be considered compensatory.

The customer must be advised that the amount they are intending to spend on a replacement will not be assessed as an asset or deemed to be earning income.

This applies until they have replaced the property subject to a 12 month limit (unless there is a valid reason for taking longer).

Exempt assets for income support payment purposes include the following lump sum payments:

• Refundable Accommodation Deposits (RAD)
• Refundable Accommodation Contributions (RAC)
• Accommodation Bonds

Lump sum accommodation payments are not exempt for aged care means assessment purposes. For more details, see Aged care fees and charges – accommodation payments.