Source: http://clik.dva.gov.au/print/book/export/html/16145
Timestamp: 2019-08-20 12:57:33
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﻿ When to Apply the Reasonableness Test
Home > Compensation and Support Policy Library > Part 9 Principles for Determining Pension Rate > 9.2 Residential Situation > 9.2.6 Reasonableness Test > When to Apply the Reasonableness Test
As a means of minimising the capacity for assets test [2] avoidance, a test of reasonableness is applied to the granny flat [2] entry contribution [2]. The reasonableness test uses an approximation of actuarial values, based on life expectancy [2], to estimate the value to the veteran of the life accommodation interest. Examples where the reasonableness test may be applied include where the veteran:
Apply the deprivation formula [4]
They have a long term involvement with the property (ie principal residence for at least 20 years, or lesser periods if traditionally a homeowner [2] and resided in properties of similar or greater value)
They only recently became a homeowner [2] (ie within the last 5 years)
Apply deprivation formula [4] to value of home
Apply deprivation formula [4] to entire amount
Spends more than the Extra Allowable Amount [2]
Spends less than the Extra Allowable Amount [2]
Once the reasonable amount is calculated, this is the amount that is considered to be the entry contribution [2] when applying the Special Residence - Basic Assessment Rules [7].
9.2.2/Principal Home [8]
Section 9.2.5 Special Residence - Assessment Rules [9]
9.2.7/Sale or Deprivation of Home [11]
9.2.3/Extended Land Use Test [13]
Refer to Section 5MA(2) [16] of the VEA for the full definition.
Refer to Section 52N [16] of the VEA for the full definition.
Source URL (modified on 18/10/2014 - 7:53pm): http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/926-reasonableness-test/when-apply-reasonableness-test
[1] http://clik.dva.gov.au/user/login?destination=node/16145%23comment-form
[3] http://clik.dva.gov.au/book/export/html/16145#tgt-cspol_part9_ftn290
[4] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/926-reasonableness-test/deprivation-formula
[5] http://clik.dva.gov.au/book/export/html/16145#tgt-cspol_part9_ftn291
[6] http://clik.dva.gov.au/book/export/html/16145#tgt-cspol_part9_ftn292
[7] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/special-residence-basic-assessment-rules
[8] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/922-basic-principles-assessment/principal-home
[9] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules
[10] http://clik.dva.gov.au/book/export/html/16145#ref-cspol_part9_ftn290
[11] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home/sale-or-deprivation-home
[12] http://clik.dva.gov.au/book/export/html/16145#ref-cspol_part9_ftn291
[13] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/923-additional-assessment-rules-certain-types-residences/extended-land-use-test
[14] http://clik.dva.gov.au/book/export/html/16145#ref-cspol_part9_ftn292