{"id":"F2018L01627","name":"Social Security (Pension Valuation Factor) Determination 2018","slug":"social-security-pension-valuation-factor-determination-2018","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":439844,"registerId":"F2018L01627-fast-fetch-1775955712808","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Social Security (Pension Valuation Factor) Determination 2018","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![Commonwealth Coat of Arms of Australia](image.001.jpeg)\n\n \n\nSocial Security (Pension Valuation Factor) Determination 2018\n\nI, Paul Fletcher, Minister for Families and Social Services, make the following Determination.\n\nDated  25 November 2018\n\nPaul Fletcher\n\nMinister for Families and Social Services\n\n \n\n \n\n \n\nContents\n\n1 Name\n\n2 Commencement\n\n3 Authority\n\n4 Definitions\n\n5 Schedules.............................................1\n\n6 Pension valuation factor — indexation of income stream.................2\n\n7 Indexation factor — non-discretionary indexation of income stream...........2\n\n8 Indexation factor — discretionary indexation of income stream.............2\n\n \n\nSchedule 1—Repeals 4\n\nSocial Security (Pension Valuation Factor) Determination 1998\n\nSchedule 2 - Pension valuation factors 5\n\n \n\n \n\n1  Name\n\n  This instrument is the Social Security (Pension Valuation Factor) Determination 2018.\n\n2  Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this instrument The day after this instrument is registered.\n\n\nNote:  This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n3  Authority\n\n  This instrument is made under subsection 1120(3) of the Social Security Act 1991.\n\n4  Definitions\n\nNote: A number of expressions used in this instrument are defined in section 23 of the Act, including the following:\n\n(a) defined benefit income stream;\n\n(b) governing rules.\n\n  In this instrument:\n\nAct means the Social Security Act 1991.\n\nrelevant year means the 12 month period for which the value of a person’s income stream is being worked out for section 1120 of the Act.\n\n5  Schedules\n\n  Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n6 Pension valuation factor — indexation of income stream\n\n  If the indexation factor for a person’s defined benefit income stream for a relevant year is worked out in accordance with section 7 or 8, the pension valuation factor that applies to the person for that year is the pension valuation factor mentioned in Schedule 2 for:\n\n (a) the age of the person on the person’s next birthday following the beginning of the relevant year; and\n\n (b) the indexation factor for the person’s income stream.\n\n7 Indexation factor — non-discretionary indexation of income stream\n\n (1) For section 6, if, under the governing rules of the fund paying a person’s defined benefit income stream, the income stream is indexed in a non‑discretionary way, the indexation factor for the income stream is worked out in accordance with this section.\n\n (2) If the income stream is indexed by reference to movements in salary, the indexation factor is taken to be a rate of at least 4% but less than 5%.\n\n (3) If the income stream is indexed by reference to movements in a price index published by the Australian Statistician, the indexation factor is taken to be a rate of at least 2.5% but less than 3%.\n\n (4) If the income stream is indexed in accordance with a rate set by the governing rules, the indexation factor is taken to be the range of rates set out in Schedule 2 that includes that rate.\n\n (5) If the income stream is indexed by more than 8%, the indexation factor is taken to be a rate of 8%.\n\n (6) For this section, an income stream is indexed in a non‑discretionary way if it is indexed otherwise than as described in subsection 8(1).\n\n8 Indexation factor — discretionary indexation of income stream\n\n (1) For section 6, if, under the governing rules of the fund paying a person’s defined benefit income stream, the income stream is indexed by discretionary determination of trustees of the fund, the indexation factor for the income stream is worked out in accordance with this section.\n\n (2) Unless subsection (4) applies, the indexation factor is the average of the indexation factors determined for the person’s income stream for the 5 years immediately preceding the relevant year.\n\n (3) The average of the indexation factors is the sum of the indexation factors determined for the person’s income stream, or for a class of income streams that includes the person’s income stream, for the 5 years, divided by 5.\n\n (4) The indexation factor is taken to be the range of rates set out in Schedule 2 that includes the average of the indexation factors worked out under subsection (3).\n\n (5) If the fund has been in existence, or making income stream payments to the person, for less than 5 years, the indexation factor is taken to be a rate of at least 2.5% but less than 3%.\n\n (6) If the income stream is indexed by more than 8%, the indexation factor is taken to be a rate of 8%.\n\n \n\n\n\n\nSchedule 1—Repeals\n\nSocial Security (Pension Valuation Factor) Determination 1998\n\n1  The whole of the instrument\n\nRepeal the instrument\n\n \n\n\n\n\nSchedule 2—Pension valuation factors\n\n \n\n- Indexation factor for person’s income stream\n- Age of person on next birthday 8% At least 7% but less than 8% At least 6% but less than 7% At least 5% but less than 6% At least 4% but less than 5% At least 3% but less than 4% At least 2.5% but less than 3% At least 2% but less than 2.5% At least 1% but less than 2% Less than 1%\n- Pension valuation factor\n- 20 or less 82 60 45 35 28 23 21 19 16 14\n- 21 to 25 74 55 42 33 27 22 20 19 16 14\n- 26 to 30 66 51 40 32 26 21 20 18 16 14\n- 31 to 35 58 46 37 30 25 21 19 18 15 13\n- 36 to 40 51 41 33 28 23 20 18 17 15 13\n- 41 to 45 44 36 30 25 22 19 17 16 14 13\n- 46 to 50 38 32 27 23 20 17 16 15 13 12\n- 51 to 55 32 27 24 21 18 16 15 14 13 11\n- 56 to 60 26 23 20 18 16 14 14 13 12 11\n- 61 to 65 21 19 17 15 14 12 12 11 10 10\n- 66 to 70 16 15 14 12 11 11 10 10 9 8\n- 71 to 75 12 11 10 10 9 8 8 8 7 7\n- 76 to 80 9 9 8 8 7 7 7 7 6 6\n- 81 to 85 6 6 5 5 5 5 5 4 4 4\n- 86 to 90 4 4 4 3 3 3 3 3 3 3\n- 91 to 95 3 3 3 3 3 3 3 3 3 3\n- 96 to 100 3 2 2 2 2 2 2 2 2 2\n- 101+ 1 1 1 1 1 1 1 1 1 1\n\n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This is a straightforward remake/repeal of the 1998 Determination with the same core purpose: providing pension valuation factors. The structure and function remain consistent with the original intent of quantifying defined benefit income streams for social security assessment."},"complexity_factors":["Multiple calculation pathways depending on indexing method (non-discretionary vs discretionary)","Requires cross-referencing between sections 6-8 and Schedule 2 table","5-year averaging calculation for discretionary indexation with fallback default rate","Nested conditions: age brackets (10 categories) crossed with indexation rate brackets (10 categories) creating 100 possible valuation factors","References to external defined terms in Social Security Act 1991 (section 23)","Specific statutory assumptions override actual fund rules (e.g., treating salary indexation as 4-5% regardless of actual rate)"],"plain_english_summary":"This law tells Centrelink how to value defined‑benefit pensions for social security tests, affecting recipients of employer‑funded lifetime pensions and officials assessing eligibility. \n\nIt sets age‑ and indexation‑based valuation factors (older age lowers the factor; higher indexation raises it), prescribes assumed rates for automatic or trustee‑decided increases, and caps indexation at 8%—which changes how much a pension counts against benefits like the Age Pension."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The instrument repeals the 1998 Determination (Schedule 1) but continues to perform the same statutory function under s1120(3) of the Social Security Act: specifying how defined‑benefit income streams are converted to pension valuation factors. The change is primarily in the numerical/procedural mechanics (indexation assumptions, averaging, caps and an updated lookup table in Schedule 2) rather than an expansion or narrowing of who is covered."},"complexity_factors":["Detailed lookup table (Schedule 2) with many age bands and multiple indexation-rate columns requiring a discrete table lookup.","Different calculation paths for non‑discretionary (section 7) and discretionary (section 8) indexation, increasing branching logic.","Range-based indexation buckets (eg. 'at least 2.5% but less than 3%') require mapping continuous rates into discrete categories.","Averaging rule for discretionary indexation: 5‑year average of prior indexation factors (s8(2)–(4)) introduces historical data dependence.","Default assumptions where history is short: use a prescribed range if the fund has existed or paid the person for less than 5 years (s8(5)).","Hard cap on indexation factor at 8% for both discretionary and non‑discretionary cases (s7(5), s8(6)), creating a truncation rule.","Interaction with external law: instrument is made under s1120(3) of the Social Security Act 1991 and refers to definitions in s23 of the Act (s3, s4).","Repeal of the 1998 Determination (Schedule 1) means implementers must replace prior tables/processes, requiring administrative transition."],"plain_english_summary":"This Determination sets the rules and lookup table used to convert defined‑benefit superannuation income streams into a single pension valuation factor for social security assessment. It affects people receiving defined‑benefit income streams and the trustees/funds that administer them, because it fixes default indexation assumptions, caps, and averaging rules that determine the notional value counted for pension means testing."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/social-security-pension-valuation-factor-determination-2018","history":"/api/acts/social-security-pension-valuation-factor-determination-2018/history","analysis":"/api/acts/social-security-pension-valuation-factor-determination-2018/analysis","conflicts":"/api/acts/social-security-pension-valuation-factor-determination-2018/conflicts","importantCases":"/api/acts/social-security-pension-valuation-factor-determination-2018/important-cases","documents":"/api/acts/social-security-pension-valuation-factor-determination-2018/documents"}}