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Tuesday, 12 May 2009
Page: 3589

Mr Abbott asked the Minister for Families, Housing, Community Services and Indigenous Affairs, in writing, on 10 March 2009:

(1)   How many investors with non-bank funds are currently unable to access their investments.

(2)   For deeming purposes,

(a)   does Centrelink regard frozen funds as assets, and

(b)   if a fund is not paying dividends is the investment regarded an asset; if so, why do people over 65 years of age have their investments included in deeming provisions if these investments cannot be liquidated and are no longer paying dividends.

Ms Macklin (Minister for Families, Housing, Community Services and Indigenous Affairs) —The answer to the honourable member’s question is as follows:

(1)   FaHCSIA is unable to identify the number of investors with non-bank funds currently unable to access their investments. However, the Australian Securities and Investment Commission (ASIC) has information on the number of people in those frozen mortgage funds that have received the benefit of ASIC’s hardship relief.

(2)   Generally investments are exempted from the deeming rules when the investment has fundamentally failed. Where a company is placed in liquidation and the administrator or liquidator confirms the estimated returns for investors, the reduced value of a customer’s investment with the failed company may be re-assessed and back-dated to the date a company administrator was first appointed. Arrears of income support payments may be payable in these circumstances.

Funds that are frozen continue to be treated as financial investments for deeming purposes because, although the fund may be temporarily frozen, it has not failed.

In some circumstances, an income support recipient may be eligible for payments under hardship provisions if their investment is considered unrealisable in circumstances where their pension is reduced or cancelled under the assets test, and they are in severe financial hardship.