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Factsheet IS90 - Public Company Shares

Purpose

This Factsheet explains what public company shares are and how they affect your income support pension or payment.

What are public company shares?

Shares represent the portion of a public company owned by a person and can be in:

  • a public company which is listed on any stock exchange;
  • an unlisted public company; or
  • derivatives, such as warrants, rights issues, options and futures.

How are shares valued?

We value all of your shares which are listed on the Australian Stock Exchange by multiplying the number of shares you own by the last sale price of the share.  We use the last sale price on our database, which is updated fortnightly.  However, when working out the rate of income support pension or payment payable, the value of shares is only refreshed at specific times (for more information refer to the section Re-valuing public company shares).

Example 1: If you own 1,000 AAA ordinary shares and the last sale price was $17.00 a share, the total value of these shares would be $17,000.

Unlisted public company shares, overseas shares, rights issues, options and futures are valued by multiplying the number of shares you own by the last sale price of the share.  We will use the latest available information in the financial press or information provided by the company.

Example 2: If you own 1,000 BBB ordinary shares and the last sale price provided by the company is $1.50, the total value of these shares would be $1,500.

Your income from public company shares?

Income is deemed on the value of your shares.  We do not assess your actual share dividends or your capital gains.  The value of your public company shares is added to the value of your other financial assets.  The deeming rules are then applied to your total financial assets to give you your deemed income.

For more information refer to Factsheet IS89 Deeming and Financial Assets.

*Note: - The deeming rules are not applied to private company shares.  Refer to Factsheet IS156 Business Structures - Private Companies for income and assets information relating to private companies.

Example 3: If you own 1,000 AAA ordinary shares and the last sale price was $17.00, the total value of these shares is $17,000.  If this $17,000 was your only financial asset, we would deem it to earn income at the current deeming rate of 1.00%.  This would equate to $6.54 deemed income per fortnight (($17,000 X 1.00%) / 26 = $6.54).

Your public company shares as assets

The current value of all public company shares is counted as a financial asset for pension or payment purposes.

Re–valuing public company shares

All of your public company shares which are listed on the Australian Stock Exchange will be re-valued using the most recent sale prices available to us:

  • in March and September each year; or
  • when you tell us of a change relating to any share or managed investment; or
  • when you request a revaluation of any of your shares or managed investments; or
  • following an event that affects your shares or managed investments.

Your unlisted public company shares, overseas shares, options, rights, warrants and futures will only be re-valued when you tell us of a change in their value.  You must tell us if the total value of these shares varies by more than $1,000.

What about restructures to public company shares?

DVA monitors public company shares for name changes, mergers, takeovers, restructures and terminations and will bring your records up to date in response to these events.

By keeping the name and number of your shares up to date, we can ensure that your listed shares will be re-valued correctly in March and September each year.

What information does DVA need about your public company shares?

The information you will need to provide depends on the type of public company shares you have.

If you sell shares or securities listed on the Australian Stock Exchange, unlisted public company shares, or overseas shares, you would be required to tell us the following information:

  • the name, type and number of shares sold and the date the shares were sold;
  • how much money you received from the sale of your investment;
  • how you re-invested or disposed of the money you received from the sale of your shares; and
  • if you are a member of a couple, who owned the shares.

If you buy shares or securities listed on the Australian Stock Exchange, unlisted public company shares, or overseas shares, you would be required to tell us the following information:

  • the full name of the company;
  • the type of shares (e.g. ordinary, instalment receipts, converting preference);
  • the number of shares or securities;
  • if you are a member of a couple, who owns the shares;
  • where you transferred the money from to buy the shares; and
  • if unlisted public company shares, full details of the company including a contact phone number.

Obligations

When you are granted an income support pension or payment and periodically after that, you will be notified of your obligations.  You will be required to tell us within 14 days (28 days if you live overseas or receive remote area allowance) of changes to your circumstances that might affect the rate of income support pension or payment you receive or your eligibility to receive that pension or payment.  These obligations apply equally to trustees.

In relation to your public company shares, the sorts of things you would need to tell us about within 14 days (28 days if you live overseas or receive remote area allowance) are as follows:

  • you buy shares, sell shares, re-invest dividends, take up rights issues, or exercise an option to purchase additional shares;
  • you give shares away; or
  • the value of your unlisted public company shares, overseas shares, options, rights, warrants and futures varies by more than $1,000.

If you sell or give away your shares you would need to tell us within 14 days (28 days if you live overseas or receive remote area allowance):

  • the name, type and number of shares you sold or gave away;
  • how much money you received from the sale of your shares;
  • if you gave away shares, the date you gave the investment away; or
  • any changes to your other income and assets.

If you buy more public company shares, you would need to tell us within 14 days (28 days if you live overseas or receive remote area allowance):

  • the name, type and number of shares you bought and the date you bought the shares; or
  • any changes to your other income and assets.

You would not need to tell us if:

  • the prices of your listed shares vary;
  • the number of your listed shares changes due to a company restructure which affects all shareholders (for example, a share split, consolidation, or bonus issue); or
  • the name of your listed company changes due to a company name change, merger or takeover.

You also would not need to tell us if:

  • you are on the maximum rate of pension or payment; and
  • your total income after the changes to your share income, does not take you over the income free area by at least $2.00 for singles or $4.00 for couples

or

  • you are receiving the reduced rate of pension or payment; and
  • your deemed income from your shares plus your other sources of income increases by less than $2.00 if you are single or $4.00 for couples.

Usually an overpayment of pension or payment will not occur when you have met your obligations.  However, sometimes even if you have met your obligations, an overpayment can occur because we have not been able to process the change before the next payday.  We do our best to prevent this occurring, but it is not always possible.  To provide you with your exact entitlement we are obliged to recover overpayments of pension or payment where they do occur.

More Information

DVA General Enquiries

Phone: 1800 555 254 *

Email: GeneralEnquiries@dva.gov.au

DVA Website: www.dva.gov.au

Factsheet Website: www.dva.gov.au/factsheets

* Calls from mobile phones and pay phones may incur additional charges.

Related Factsheets

Disclaimer

The information contained in this Factsheet is general in nature and does not take into account individual circumstances. You should not make important decisions, such as those that affect your financial or lifestyle position on the basis of information contained in this Factsheet. Where you are required to lodge a written claim for a benefit, you must take full responsibility for your decisions prior to the written claim being determined. You should seek confirmation in writing of any oral advice you receive from DVA.

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9 May 2018