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Cryptocurrency 108-26071749

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This document outlines how to assess and record cryptocurrency assets and income derived from cryptocurrency.

On this page:

Recording cryptocurrency

Updating existing cryptocurrency

Income assessment cryptocurrency


Recording cryptocurrency

Table 1

Expand table

Step

Action

1

Advice of cryptocurrency

If the customer is:

  • advising of new cryptocurrency assets, go to Step 2
  • requesting an update to the value or holdings for existing cryptocurrency assets, see Table 2
  • advising of income from cryptocurrency, including where cryptocurrency is provided as income (valuable consideration), see Table 3

2

New cryptocurrency

Is the customer regularly buying and selling cryptocurrency as part of a business with the intent to generate income from trading? See Share traders for more information?

3

Details needed for new cryptocurrency

To record the cryptocurrency, the following information is required:

  • Type of cryptocurrency
  • Number of holdings
  • Name of the exchange where the customer bought the cryptocurrency (if known/available)
  • Percentage of ownership
  • The event date:
    • For new claims, this will be the date of claim assessment, except where the partner is currently in receipt of payment
    • For non-claim updates, this will be the date of purchase or acquisition
  • Details of any changes to other investments because of this purchase (for example, reduction in bank balance following cryptocurrency purchase)

Take the information verbally where possible or request supporting documents from the customer to assist with coding.

Is there sufficient information available for the requested update?

4

Determining the asset value

The value of cryptocurrency changes often making it difficult to determine a value for a particular day.

Obtaining the market value:

  • Current and historical market values can be taken from any reputable Australian exchange such as Coinbase, CoinSpot or Kraken. The Resources page has links to some Australian exchanges
  • If the customer has details of the exchange, they purchased their cryptocurrency through, use this exchange to obtain the current market value
  • Identify the latest 'sell' value available for the event date, this does not need to be the 'closing value' for that day
  • If the customer disagrees with the value identified and can provide details of a different value for the same event date that can be confirmed through a reputable exchange, use that value instead

Determining the asset value:

  • Once the current market value has been obtained for the event date, multiply the amount of the customer’s holdings by that value
  • Round the result down to the nearest whole dollar, if required

5

Coding the Other Assets (OAS) screen

Cryptocurrency assets for customers who are not considered to be operating a business are recorded on the Other Assets (OAS) screen. This is because cryptocurrency does not meet the Social Security Act 1991 definition of a financial investment and deeming does not apply.

Select the relevant option below:

In Process Direct:

On the OAS screen, select the Add icon for the Other Assets Amount and Ownership Details table and code the following fields:

  • Asset Type: select Other Assets (OTH)
  • Description: Crypto - (Record the name of the cryptocurrency or the relevant code) for example, 'Crypto - Bitcoin' or 'Crypto - BTC'
  • Event Date:
    • For new claims, this will be the date of claim assessment, except where the partner is currently in receipt of payment
    • For non-claim updates, this will be the date of purchase or acquisition
  • Total Asset Value: as calculated in Step 4
  • % Owned Client: the percentage of ownership for the customer
  • % Owned Partner: the percentage of ownership for the customer’s partner

Select Save and update the following fields:

  • Receipt Date:
  • Channel:
  • Service Reason: if the system does not select a default Service Reason, select the most relevant Service Reason for the update

Make any other necessary income or assets changes (for example, changes to bank balances).

Go to Step 6.

In Customer First:

On the OAS screen, code the following fields:

  • Asset Type: select Other Assets (OTH)
  • Description: Crypto - (Record the name of the cryptocurrency or the relevant code) for example, 'Crypto - Bitcoin' or 'Crypto - BTC'
  • Event Date:
    • For new claims, this will be the date of claim assessment, except where the partner is currently in receipt of payment
    • For non-claim updates, this will be the date of purchase or acquisition
  • Total Asset Value: as calculated in Step 4
  • % Owned Client: the percentage of ownership for the customer
  • % Owned Partner: the percentage of ownership for the customer’s partner

Select Continue and update the Source and DOR fields.

Make any other necessary income or assets changes (for example, changes to bank balances). See Coding income and assets for Centrelink payments and services.

Go to Step 6.

6

Advise the customer of their obligations

If speaking with the customer, tell them they are expected to notify Services Australia of:

  • any changes in the value of their cryptocurrency which may have an impact under the means test:
    • Where the overall value of a cryptocurrency is trending consistently upward or downward over a longer period and this is likely to impact their rate of payment, customers should periodically revalue the asset at a reasonable frequency such as fortnightly or monthly
    • If a customer receives the maximum rate of payment and the value of their cryptocurrency is trending downward, they are not expected to advise of the change as this will not impact their payment.
  • selling or purchasing cryptocurrency

Advise the customer they can notify of changes by phone or face to face however they are unable to make changes to the value of their cryptocurrency assets online.

7

Document the record

Record details on a Note/DOC which includes:

  • Details of the type of cryptocurrency and the number of holdings
  • How the assessable asset amount was determined, such as:
    • Where the relevant value was sourced (for example, which online exchange the value was taken from)
    • The relevant value used and the effective date and time, and
    • The calculation performed
  • Details of any other related income and asset updates undertaken

If the customer has also generated income from their cryptocurrency, including where cryptocurrency is provided as income (valuable consideration), see Table 3.

See the Resources page for an example of cryptocurrency provided as income.

8

Finalise the update

In Process Direct:

  • Select Assess
  • Check the outcome on Entitlements (ELD) and select Finish
  • Add any extra details to the Finalise Note which has been pre-filled with details of the income and assets update
  • Select Finalise to complete the transaction

In Customer First:

  • Complete the activity on the Assessment Results (AR) screen

Procedure ends here.


Updating existing cryptocurrency

Table 2

Expand table

Step

Action

1

Updating existing cryptocurrency

Where the customer is providing an update to the number of holdings or the value of their cryptocurrency, update the details on the Other Assets (OAS) screen.

To record the update, the following information is required:

  • Type of cryptocurrency
  • Number of holdings
  • Exchange the customer purchased the cryptocurrency through (if known/available)
  • Percentage of ownership
  • Event date:
    • For changes to the number of holdings (including where holdings are sold), this will be the date the change occurred
    • For changes in value, this will be the date the value changed
  • If cryptocurrency assets have been sold, details of what was done with the proceeds of the sale (for example, increased bank balance)

Obtain information verbally where possible or request supporting documents from the customer to assist with coding.

Is there sufficient information available for the requested update?

2

Determining the asset value

The value of cryptocurrency changes often making it difficult to determine a value for a particular day.

Obtaining the market value:

  • Current and historical market values can be taken from any reputable Australian exchange such as Coinbase, CoinSpot or Kraken. The Resources page has links to some Australian exchanges
  • If the customer has details of the exchange they purchased their cryptocurrency through, use this exchange to obtain the current market value
  • Identify the latest 'sell' value available for the event date, this does not need to be the 'closing value' for that day
  • If the customer disagrees with the value identified and can provide details of a different value for the same event date that can be confirmed through a reputable exchange, use that value instead

Determining the asset value:

  • Once the current market value has been obtained for the event date, multiply the amount of the customer’s holdings by that value
  • Round the result down to the nearest whole dollar, if required.
  • Note: if the customer has sold all their cryptocurrency holdings, the asset value is zero. Any changes to other assets and income will need to be updated. See Coding income and assets for Centrelink payments and services.

3

Coding the Other Assets (OAS) screen

Cryptocurrency assets are recorded on the Other Assets (OAS) screen. This is because cryptocurrency does not meet the Social Security Act 1991 definition of a financial investment and deeming does not apply.

Select the relevant option below.

In Process Direct:

Expand the existing investment from the OAS screen, select the Add icon for the Other Assets Amount and Ownership Details table and code the following fields:

  • Event Date:
    • For changes to the number of holdings (including where holdings are sold), this will be the date the change occurred
    • For changes in value, this will be the date the value changed
  • Total Asset Value: as per Step 2
  • % Owned Client: the percentage of ownership for the customer:
    • Where holdings have been sold, record zero
  • % Owned Partner: the percentage of ownership for the customer’s partner:
    • Where holdings have been sold, record zero

Select Save and update the following fields:

  • Receipt Date:
  • Channel:
  • Service Reason: if the system does not select a default Service Reason, select the most relevant Service Reason for the update

Make any other necessary income or assets changes (for example, changes to bank balances).

In Customer First:

Select the asset from the OAS screen, code the following fields:

  • Event Date:
    • For changes to the number of holdings (including where holdings are sold), this will be the date the change occurred
    • For changes in value, this will be the date the value changed
  • Total Asset Value: as per Step 2
  • % Owned Client: the percentage of ownership for the customer:
    • Where holdings have been sold, record zero
  • % Owned Partner: the percentage of ownership for the customer’s partner:
    • Where holdings have been sold, record zero

Select Update and complete the Source and DOR fields.

Make any other necessary income or assets changes (for example, changes to bank balances).

4

Advise the customer of their obligations

If speaking with the customer, tell them they are expected to notify Services Australia of:

  • any changes in the value of their cryptocurrency which may have an impact under the means test:
    • Where the overall value of a cryptocurrency is trending consistently upward or downward over a longer period and this is likely to impact their rate of payment, customers should periodically revalue the asset at a reasonable frequency such as fortnightly or monthly
    • If a customer receives the maximum rate of payment and the value of their cryptocurrency is trending downward, they are not expected to advise of the change as this will not impact their payment.
  • selling or purchasing cryptocurrency

Advise the customer they can notify of changes by phone or face to face however they are unable to make changes to the value of their cryptocurrency assets online.

5

Document the record

Record details on a Note/DOC which includes:

  • Details of the type of cryptocurrency and the number of holdings and what the change is (for example market value increased, holdings sold)
  • How the assessable asset amount was determined, such as:
    • Where the relevant value was sourced (for example, which online exchange the value was taken from)
    • The relevant value used and the effective date and time, and
    • The calculation performed
  • Details of any other related income and asset updates undertaken

If the customer has also generated income from their cryptocurrency, including where cryptocurrency is provided as income (valuable consideration), see Table 3.

See the Resources page for an example of cryptocurrency provided as income.

6

Finalise the update

In Process Direct:

  • Select Assess
  • Check the outcome on Entitlements (ELD) and select Finish
  • Add any extra details to the Finalise Note which has been pre-filled with details of the income and assets update
  • Select Finalise to complete the transaction

In Customer First:

  • Complete the activity on the Assessment Results (AR) screen

Procedure ends here.


Income assessment cryptocurrency

Table 3

Expand table

Step

Action

1

Advice of income from cryptocurrency

Cryptocurrency is not included in the Social Security Act 1991 definition of financial investment. This means that deeming does not apply and actual income earned from is assessed in the income test.

Customers can 'stake' their cryptocurrency assets to work in a blockchain network. In return for 'staking', they can receive rewards, including more of the cryptocurrency they are 'staking', like interest in a savings account.

Payments of cryptocurrency from staking or in return for other services provided are valuable consideration.

  • The value of the cryptocurrency given is assessed as ordinary income
  • Valuable consideration received from an employee/employer relationship is treated as employment income, see Assessment of employment income for Centrelink payments
  • For advice, refer cases to the Income Support Means Test team

Note: make sure that the asset value of the cryptocurrency received is updated on the customer’s record.