Your assets are assessed at net market value. If you owe money on an asset (an encumbered asset), Centrelink should only consider your equity.

Remember also to deduct commission and selling costs from the likely sale price to get net market value.

Centrelink will usually accept your estimate of the value of your assets, at least initially. However, they may request that the Australian Valuation Office value any real estate, particularly if your estimate of assets is close to the assets test limit, or if Centrelink believes that your estimate is different from the normal range for the district.

A letter from a real-estate agent stating the likely sale price is often acceptable to Centrelink and avoids the cost of a professional valuation.

The Australian Valuation Office performs 'drive by' valuations for Centrelink, which means that they simply make an estimate based on average district prices and the external appearance of the property. These valuations can be highly inaccurate and should be challenged if incorrect.

You should value your assets at what they would bring if sold immediately (minus any selling costs or commissions), for example, livestock at the sale yards, machinery at a clearing sale, your car at a secondhand dealer offering cash, and so on.

Land should be valued according to recent similar land sales in the district. A real-estate agent may be able to give you an idea of a realistic price for an immediate sale. In extreme circumstances (such as drought), your land may be almost unsaleable at any price. In this situation, argue that market value of the land is extremely low. Obviously, once circumstances change (the drought breaks), your land may rapidly increase in value and Centrelink may expect a new estimate.

Disputes over valuation are best avoided by supplying good supporting evidence (such as a written estimate from a real-estate agent, secondhand dealer, etc.). If there are disputes, the final valuation will be based on a full inspection by the Australian Valuation Office. At this stage, make a thorough effort to highlight the reasons why your estimate should be accepted.