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Moving to combat the black economy

05th Mar, 2018

The Black Economy Taskforce was established in 2017 “to develop an innovative, forward-looking whole-of-government policy response to combat the black economy in Australia, recognising that these issues cannot be tackled by traditional tax enforcement measures alone”. In May 2017 the taskforce made a its initial recommendations, which it based on foreign jurisdiction experiences, consultation with stakeholders and anecdotal evidence it had received.

The DSS proposes to consider the following amounts when assessing such pooled lifetime income streams as part of social security means testing:

  • income test: 70% of all income paid from the income stream product; and
  • assets test: 70% of the purchase price of the product until the person reaches the age of their life expectancy at the time they made the purchase, and 35% from then on.
TIP: Under the new rules, deferred super income stream products would receive the same asset test assessment as products where payments begin immediately.