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[2010] AATA 753
respondent. Tribunal affirms the decision under review; Centrelink's calculation of annual deemed income $1,366.80 (weekly $26.28) from the applicant's Commonwealth Bank Pensioner Security Account is correct...
3 cited instruments linked from this judgment.
Centrelink treated the money in Mr Gvadjava's Commonwealth Bank Pensioner Security Account as a financial asset and used statutory deeming rules to calculate deemed income ($1,366.80 per year, $26.28 per week). The applicant disputed use of deemed rates rather than his actual bank interest; the AAT found the statutory definitions and deeming arithmetic were correctly applied and affirmed the earlier decision. The Tribunal cannot direct Housing SA on how it uses Centrelink's deemed income figure; it recommended the applicant ask Housing SA to consider actual interest instead.
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1,808 words · generated 19/07/2026
Mr Alexandre Gvadjava is an age pension recipient who held funds in a Commonwealth Bank Pensioner Security Account. Centrelink treated those funds as a financial asset and assessed deemed income under the Social Security Act 1991 (the Act). On 4 November 2009 the account balance was recorded as $59,560. Applying the statutory deeming regime, Centrelink calculated annual deemed income of $1,366.80 (equivalent to $26.28 per week). The applicant sought internal review, the Authorised Review Officer and the Social Security Appeals Tribunal affirmed Centrelink's decision, and he appealed to the Administrative Appeals Tribunal (AAT). Senior Member R W Dunne heard the AAT review on 24 August 2010 and delivered an oral decision, later provided in written reasons. The AAT affirmed the decision under review, holding that the account funds were 'deposit money' and thus 'financial assets' under s 9(1) and that ss 1076, 1081 and 1082 (with the Deeming Threshold Rates Determination) had been correctly applied to compute deemed income (see Consideration and Summary).
Key factual points grounded in the reasons:
The applicant objected to the use of deemed income rather than his actual bank interest for two reasons: he considered deemed income was not his real income and, more practically, Housing SA used Centrelink's weekly deemed income figure to calculate his rent. The applicant contended the latter caused his rent to increase. The Tribunal recognised his predicament but concluded it had no power in this social security review to require Housing SA to use actual interest rather than the statutory deemed figure (Consideration).
The decision rests on straightforward statutory interpretation and arithmetic application of the deeming provisions in the Act.
Classification of the asset: The court accepted that funds in a Commonwealth Bank Pensioner Security Account are 'deposit money' and therefore within the statutory definition of a 'financial asset' under s 9(1) of the Act. That classification is decisive because the deeming rules in s 1076 apply to a person who has financial assets.
The statutory method: Section 1076(3A) prescribes a method statement for calculating deemed ordinary income where financial assets exceed the deeming threshold. The Tribunal applied that method: multiply the deeming threshold by the below-threshold rate; subtract the threshold from total assets; multiply the remainder by the above-threshold rate; sum the two amounts. The Deeming Threshold Rates Determination (2009) provided the numerical rates (2% and 3%) for the relevant periods; s 1081 fixed the threshold (indexed amounts).
Conversion to weekly figure: Section 1076(4) takes the annual deemed income and divides it by 52 to produce the weekly deemed income for social security purposes.
Limited scope of the Tribunal: The Tribunal emphasised its role is to review Centrelink's decision against the statutory provisions, not to direct how non‑social‑security bodies such as Housing SA use Centrelink's outputs. The Tribunal therefore could not give the applicant the remedy he sought in relation to Housing SA's rent calculation. It suggested, obiter, that he seek a separate approach with Housing SA (Consideration).
The AAT's reasoning is concise: given the statutory definitions and the undisputed factual account balance, the statutory calculation yields the deemed income figure Centrelink used. The Tribunal concluded Centrelink acted properly under the Act and Determination.
Before this decision: The Social Security Act 1991 contained deeming rules and thresholds. The decision itself does not create new law; it applies settled statutory deeming machinery to an ordinary factual scenario. The AAT’s determination confirms the routine application of the deeming provisions to deposit accounts such as Pensioner Security Accounts.
After this decision: The ruling reinforces the established position that:
The decision does not change legal principles, but provides a clear, short authority applying the statutory framework to a commonplace fact pattern. It thus serves as a practical confirmation for practitioners and clients that the Act’s deeming scheme will be applied as drafted where the facts are the same.
Quoted passages below are traced to the Tribunal's written reasons and accompanied by a plain‑English paraphrase and significance.
"I am satisfied that the amount invested by Mr Gvadjava in his Commonwealth Bank Pensioner Security Account ... was 'deposit money' and, as such, was a 'financial asset', within the meaning of s 9(1) of the Act." (Consideration)
"I am also satisfied that the following calculations of deemed income, made by the respondent pursuant to ss 1076, 1081 and 1082 of the Act, are correct: ... Total Annual Deemed Income - $1366.80." (Consideration)
"Under s 1076(4), Mr Gvadjava is taken, for the purposes of the Act, to receive one fifty-second of his annual deemed income of $1,366.80. Therefore, his deemed ordinary weekly income is $26.28." (Consideration)
"I have sympathy for Mr Gvadjava and the predicament he finds himself in with Housing SA. However, the Tribunal is unable to be of any assistance to him on this issue in dealing with his application for review. It would be my recommendation that he approach Housing SA again and request that, rather than use the weekly deemed income assessed by Centrelink, the actual interest on his Pensioner Security Account be taken into account in determining the amount of his accommodation rental." (Consideration)
This decision is directly applicable where:
If a client says Centrelink used deeming rather than actual interest to assess income from a bank deposit account, and the account is plainly 'deposit money', this decision confirms the statutory approach will prevail in a social security merits review.
This AAT decision is a tribunal decision applying statutory provisions factually. It is not a high‑court precedent and does not purport to alter the law. Later decisions considering the same deeming provisions will treat AAT decisions as persuasive on factual application and reasoning, but not binding in the way appellate decisions are. The reasons are limited to the facts here, classification of deposit accounts and arithmetic application of s 1076(3A), so later tribunals hearing substantially similar facts can and likely will follow the approach taken here. Because the decision does not undertake novel statutory interpretation, it is expected to be accepted as routine application of the deeming scheme.
(Practitioners should search subsequent AAT and SSAT decisions and any appellate consideration for any differing treatment of classification issues or where special factual features exist, for example complex investment structures or disputes about the correct account balance date. This decision itself points to an ordinary factual application.)
Although this decision is straightforward, several practical and legal questions remain in the broader administrative and inter-agency context:
Use of Centrelink outputs by third parties: The Tribunal noted it could not control how Housing SA used Centrelink's deemed figure. The law that governs how non‑social‑security agencies should treat Centrelink information or whether they may preferentially use actual interest is outside the AAT's remit. This leaves open how and in what circumstances Housing SA or other agencies should accept or vary rent/benefit calculations when Centrelink provides deemed figures that may differ from actual income.
Timing and account balance variability: The decision treated the account balance as at 4 November 2009 as accepted; disputes about which date to use for balance, or whether withdrawals (e.g. the applicant's $10,000 withdrawal earlier in 2009) should be treated differently, could produce different outcomes. The decision does not address contested account dates or timing-based disputes.
Special factual circumstances: The case did not involve complex instruments, structured products, or income streams where characterisation as a 'financial asset' could be contentious. Cases involving trusts, hybrids, or income streams with capital components may require more detailed analysis than provided here.
Remedies against third parties: The Tribunal suggested the applicant ask Housing SA to use actual interest. It remains open whether a social security recipient could secure a remedy against a housing authority or other third party for relying on deemed figures, and under what legal basis (administrative law, contractual, statutory obligations of housing authorities).
Legislative policy debate: The decision affirms statutory deeming as legislated. Broader policy challenges to deeming (equity, income reflection versus simplicity) are political and legislative rather than judicial in this case. Courts and tribunals are bound to implement the Act as written.
Conclusion
Gvadjava is a concise, fact-driven AAT decision applying the Social Security Act 1991 deeming provisions to a deposit account. It is useful for practitioners when advising clients with pensioner accounts who challenge Centrelink’s use of statutory deeming rather than actual bank interest. The AAT’s holding is limited, predictable, and firmly grounded in the statute.
For the reasons given orally at the hearing of this matter, the Tribunal affirms the decision under review.
SOCIAL SECURITY - pensions, benefits and allowances - receipt of age pension - applicant has financial asset - deemed income on financial asset calculated by respondent at threshold rates - applicant asserts actual interest rates should apply - decision under review affirmed.
Social Security Act 1991, ss 9(1), 1076, 1081(1), 1082
Social Security (Deeming Threshold Rates) (DEEWR) Determination 2009 (No.2)
"9 Financial assets and income streams definitions
(1) In this Act, unless the contrary intentions appears:
financial investment means:
(a) available money; or
(b) deposit money; or
(c) a managed investment; or
(d) a listed security; or
(e) a loan that has not been repaid in full; or
(f) an unlisted public security; or
(g) gold, silver or platinum bullion; or
(h) an asset-tested income stream (short term);
but does not include an investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008)
...
financial asset means:
(a) a financial investment; or
(b) a deprived asset ...".
"1076 Deemed income from financial assets - persons other than members of couples
(1) This section applies to a person who is not a member of a couple.
(2) A person who has financial assets is taken, for the purposes of this Act to receive ordinary income on those assets in accordance with this section.
(3) If the total value of the person's financial assets is equal to or less than the person's deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.
(3A) If the total value of the person's financial assets exceeds the person's deeming threshold, the ordinary income that the person is taken to receive is worked out as follows:
Method statement
Step 1. Multiply the person's deeming threshold by the below threshold rate.
Step 2. Subtract the deeming threshold from the total value of the person's financial assets.
Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate.
Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets.
(4) The person is taken, for the purposes of this Act, to receive one fifty-second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week."
(1) The deeming threshold for a person who is not a member of a couple is $30,000.
(2) The deeming threshold for a pensioner couple is $50,000.
Note. The amounts fixed by subsections (1) and (2) are indexed every 1 July. See sections 1190 - 1192."
Has the respondent correctly assessed the deemed income of the applicant from his financial asset for the purpose of determining his rate of age pension?
Balance in Commonwealth Bank Pensioner Security Account
Below threshold rate of 2 percent of deeming threshold ($42,000) - $840.00
Above threshold rate of 3 percent of balance ($17,560) - $526.80
I certify that the 20 preceding paragraphs are a true
Signed: .....................................................................................
Solicitor for the Respondent Centrelink Advocacy Branch
Tribunal affirms the decision under review; Centrelink's calculation of annual deemed income $1,366.80 (weekly $26.28) from the applicant's Commonwealth Bank Pensioner Security Account is correct and in accordance with ss 9(1), 1076, 1081 and 1082 of the Social Security Act 1991 and the Social Security (Deeming Threshold Rates) Determination 2009 (No.2).