{"id":"F2017L00213","name":"Social Security (Modification of Asset Deprivation Rules) Principles 2017","slug":"social-security-modification-of-asset-deprivation-rules-principles-2017","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":95893,"registerId":"commonwealth-F2017L00213-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Social Security (Modification of Asset Deprivation Rules) Principles 2017","content":"![](image.001.png)\n\nSocial Security (Modification of Asset Deprivation Rules) Principles 2017\n\nI, FINN PRATT, Secretary of the Department of Social Services, formulate these Principles under section 1209E of the Social Security Act 1991.\n\nDated 8 March 2017\n\nFinn Pratt\n\nSecretary of the Department of Social Services\n\nContents\n\nPart 1 Preliminary\n\n1 Name of Principles 3\n\n2 Commencement 3\n\n3 Definitions 3\n\n4 Purpose 3\n\nPart 2 Disposal of asset (on or after 1 January 2002) by individual\n\n5 Purpose of Part 2 4\n\n6 Definitions 4\n\n7 Transferor as sole attributable stakeholder 4\n\n8 Transferor as member of couple 4\n\n9 Transfer to company or trust with 2 or more attributable stakeholders 4\n\n10 Transfer to company or trust by individual who becomes attributable stakeholder 5\n\nPart 3 Disposal of asset (on or after 1 January 2002) by company or trust\n\n11 Purpose of Part 3 6\n\n12 Disposal to individual by company or trust 6\n\n13 Disposal by way of dividend or distribution to genuine investor 6\n\n  \n\nPart 1 Preliminary\n\n1 Name of Principles\n\nThese Principles are the Social Security (Modification of Asset Deprivation Rules) Principles 2017.\n\n2 Commencement\n\nThese Principles commence on 1 April 2017.\n\n3 Definitions\n\nIn these Principles:\n\n> Act means the Social Security Act 1991.\n\n> asset disposal provisions means Division 2 of Part 3.12, section 93U, section 93UA and sections 198F to 198MA of the Act.\n\n4 Purpose\n\nThese Principles set out decision‑making principles with which the Secretary must comply for the purposes of making a determination under subsection 1208K (1) or 1208L (3) of the Act.\n\n  \n\nPart 2 Disposal of asset (on or after 1 January 2002) by individual\n\n5 Purpose of Part 2\n\nThis Part sets out decision‑making principles with which the Secretary must comply in making a determination for subsection 1208K (1) of the Act.\n\n6 Definitions\n\nIn this Part:\n\n> individual means an individual who transfers property to a company or trust in accordance with subsection 1208K (1) of the Act.\n\n> member of a couple has the same meaning as in section 4 of the Act.\n\n> transfer of property means a transfer of property by way of capital contribution.\n\n7 Transferor as sole attributable stakeholder\n\n(1) This section applies to an individual who is not a member of a couple.\n\n(2) The Secretary must take into account whether the individual was the only attributable stakeholder of the company or trust, either before or after the transfer.\n\n8 Transferor as member of couple\n\n(1) This section applies to an individual who is a member of a couple.\n\n(2) The Secretary must take into account whether:\n\n(a) the individual was the only attributable stakeholder of the company or trust, before or after the transfer; or\n\n(b) both members of the couple were the only attributable stakeholders of the company or trust, before or after the transfer.\n\n9 Transfer to company or trust with 2 or more attributable stakeholders\n\n(1) This section applies if, in relation to a transfer of property to a company or a trust:\n\n(a) the transfer is made by an attributable stakeholder of the company or trust; and\n\n(b) before the transfer, there were 2 or more attributable stakeholders of the company or trust.\n\n(2) This section also applies if, in relation to a transfer of property to a company or a trust:\n\n(a) the transfer is made by an attributable stakeholder of the company or trust; and\n\n(b) after the transfer, there were 2 or more attributable stakeholders of the company or trust.\n\n(3) The Secretary must take into account the asset attribution percentage of each attributable stakeholder of the company or trust, before and after the transfer of the property.\n\n10 Transfer to company or trust by individual who becomes attributable stakeholder\n\n(1) This section applies if, in relation to a transfer of property to a company or a trust:\n\n(a) the transfer is made by an individual who is not an attributable stakeholder of the company or trust; and\n\n(b) as a result of the transfer, the individual is an attributable stakeholder.\n\n(2) The Secretary must take into account the asset attribution percentage of each attributable stakeholder of the company or trust, before and after the transfer of the property.\n\n  \n\nPart 3 Disposal of asset (on or after 1 January 2002) by company or trust\n\n11 Purpose of Part 3\n\nThis Part sets out decision‑making principles with which the Secretary must comply in making a determination for subsection 1208L (3) of the Act.\n\n12 Disposal to individual by company or trust\n\n(1) This section applies if:\n\n(a) a company pays a dividend to an individual who is an attributable stakeholder of the company; and\n\n(b) the asset disposal provisions apply, and are taken to have applied, as if the individual had disposed of an asset of the individual.\n\n(2) This section also applies if:\n\n(a) a trust makes a distribution to an individual who is an attributable stakeholder of the trust; and\n\n(b) the asset disposal provisions apply, and are taken to have applied, as if the individual had disposed of an asset of the individual.\n\n(3) The Secretary must consider whether the amount of the dividend or the value of the distribution is reasonable, having regard to the individual’s asset attribution percentage, in relation to the company or trust, before and after the disposal of the asset.\n\n13 Disposal by way of dividend or distribution to genuine investor\n\n(1) This section applies if:\n\n(a) during a derivation period of a company, the company pays a dividend to an individual who is not an attributable stakeholder of the company; and\n\n(b) the individual has, before or during the derivation period, made a genuine transfer of capital to the company.\n\n(2) This section also applies if:\n\n(a) during a derivation period of a trust, the trust makes a distribution to an individual who is not an attributable stakeholder of the trust; and\n\n(b) the individual has, before or during the derivation period, made a genuine transfer of capital to the trust.\n\n(3) For subsections (1) and (2), a transfer of capital is a genuine transfer of capital if:\n\n(a) the individual receives, as consideration for the transfer, shares in the company, or units in the trust, of a value that is equivalent to the value of the capital transferred; and\n\n(b) the individual has a legal or equitable right to a share of the capital on the winding‑up of the company or trust; and\n\n(c) the individual has a legal or equitable right to receive dividends or distributions in accordance with the constituent documents of the company or under the terms of the trust; and\n\n(d) the individual is over 18 years.\n\n(4) The Secretary must consider whether the amount of the dividend or the value of the distribution is reasonable, having regard to the proportion of the value of the capital transferred by the individual to the total value of the assets owned by the company or trust at the time of the transfer.","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The instrument remains tightly focused on its original purpose: providing decision-making principles for asset deprivation determinations under specific sections of the Social Security Act 1991. It does not expand beyond the modification of asset deprivation rules for company and trust transfers."},"complexity_factors":["Heavy reliance on defined terms from the parent Social Security Act 1991 ('attributable stakeholder', 'asset attribution percentage', 'derivation period', 'member of a couple') without full definitions in this instrument","Cross-references to multiple sections of the Act (sections 1208K, 1208L, 1209E, Division 2 of Part 3.12, sections 93U, 93UA, 198F-198MA) required to understand the full context","Conditional logic requiring assessment of 'before and after' states of company/trust structures","Nested conditions in section 13 for determining 'genuine transfer of capital' (four separate criteria)","Temporal limitation restricting application to transfers on or after 1 January 2002, creating a historical cut-off","Dual pathways for similar scenarios (company vs trust) requiring parallel but slightly different analysis"],"plain_english_summary":"These Principles tell the Department of Social Services how to decide when transfers into companies or family trusts count as “deprivation” for the Age Pension assets test. They set tests for who controls or benefits from these structures, when dividends or distributions reflect true ownership, and when outside investors are genuine.\n\nThey affect pension applicants, attributable family stakeholders, and legitimate investors — preventing disguise of assets while protecting bona fide investments and ensuring consistent Centrelink decisions."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"These Principles do not alter the substantive reach of the asset disposal provisions themselves. Instead they prescribe how the Secretary must make determinations under specified subsections (1208K(1), 1208L(3)) about transfers and disposals on or after 1 January 2002, by setting decision‑making factors and evidentiary considerations (see s.4 and Parts 2–3)."},"complexity_factors":["Cross‑references to multiple provisions of the Social Security Act (subsections 1208K(1), 1208L(3), Division 2 of Part 3.12, ss 93U, 93UA, 198F–198MA) increase interpretive dependency (see s.3 definition of 'asset disposal provisions').","Requires calculation and comparison of asset attribution percentages before and after transfers, which entails valuation and apportionment work (ss 9(3), 10(2), 12(3), 13(4)).","Different rules by actor type and status: single individual, member of a couple, existing attributable stakeholder, or new attributable stakeholder (ss 7–10) create branching decision paths.","Discretionary judgment points: Secretary must 'take into account' or 'must consider' factors (interpretive exercise rather than automatic outcomes) (ss 7–10, 12–13).","Genuine investor test is multi‑part and legal‑rights focused (requires shares/units of equivalent value, winding‑up rights, distribution rights, age) — evidentiary and legal analysis required (s 13(3)).","Temporal complexity from assessing positions both before and after transfers and during derivation periods (ss 9–10, 12–13).","Operational and compliance burdens on claimants and entities to supply transfer documentation, valuations and proof of rights, increasing administrative workload."],"plain_english_summary":"This instrument tells the Secretary how to decide whether transfers between individuals, companies and trusts count as ‘asset disposals’ for Social Security purposes. It applies to disposals on or after 1 January 2002 and guides determinations under subsections 1208K(1) and 1208L(3) (see s.4). \n\nIt affects individuals (single or couple members), companies, trusts and their attributable stakeholders by requiring the Secretary to consider who held stakes before and after transfers, attribution percentages, and the reasonableness of dividends or distributions (Parts 2–3)."}},"importantCases":[],"_links":{"self":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017","history":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017/history","analysis":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017/analysis","conflicts":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017/conflicts","importantCases":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017/important-cases","documents":"/api/acts/social-security-modification-of-asset-deprivation-rules-principles-2017/documents"}}