Loss of assets test exempt status - certificate provided out of time

A pension with asset test exempt (ATE) status is a very valuable thing.  If a pension has ATE status, then for assets test purposes, the capital value of the pension is either not counted at all (full ATE) or counted only as to 50% (partial ATE).  To retain that status, an actuarial certificate in respect of the pension must be provided to Centrelink for each financial year.  This certificate must be provided by 21 January of the financial year to which it relates.  If the certificate is not provided by the due date (or the certificate is negative in the sense that the actuary cannot form an opinion that there is a high probability of the superannuation fund being able to pay the pension) the pension will lose its ATE status.

In the Wightman’s case, a positive certificate (ie the actuary had formed an opinion that there is a high probability of the fund being able to pay the pension) was provided but only after the due date.  An extension to lodge had been requested and been granted by a Centrelink officer and the certificate was provided within the extension period.  

Centrelink held that, despite the granted extension, the pension lost its ATE status on 1 January.  The loss of ATE status was referred to the AAT which held there is no statutory basis to grant an extension, that therefore the grant of the extension was ineffective and, consequently, the loss of ATE status of the pension was confirmed.

Case Reference: Wightman v Secretary, Department of Social Services [2017] AATA 1057