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Payment Factors for Allocated Income Streams

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Last amended: 3 September 2013

Use of payment valuation factors and percentage factors

These factors are used in determining the minimum and maximum payment limits for allocated income streams which are now commonly referred to as account based income streams. The relevant payment factor depends on the commencement day of the income stream.

Commencement day

Table

Before 1 January 2006*

Table 1

From 1 January 2006 to 30 June 2007*

Table 2

From 1 July 2007

Table 3

* Table 3 applies to income streams with a commencement day before 1 July 2007 if the owner of the income stream elects for Table 3 to apply instead of Table 1 or Table 2 as appropriate.

Table 1 – Determining the payment valuation factor

This table prescribes which maximum and minimum payment factors to use based on the person's age in whole years on the commencement day of the income stream and then on each 1 July thereafter for income streams commencing before 1 January 2006.

Age

Maximum payment valuation factor

Minimum payment valuation factor

Age

Maximum payment valuation factor

Minimum payment valuation factor

41

10

24.3

71

6.2

13.1

42

10

24.0

72

5.8

12.6

43

10

23.7

73

5.4

12.2

44

10

23.4

74

4.8

11.7

45

10

23.1

75

4.3

11.3

46

10

22.8

76

3.7

10.8

47

10

22.5

77

3.0

10.4

48

10

22.2

78

2.2

10.0

49

10

21.9

79

1.4

9.5

50

9.9

21.5

80

1

9.1

51

9.9

21.2

81

1

8.7

52

9.8

20.9

82

1

8.3

53

9.7

20.5

83

1

7.9

54

9.7

20.1

84

1

7.5

55

9.6

19.8

85

1

7.1

56

9.5

19.4

86

1

6.8

57

9.4

19.0

87

1

6.4

58

9.3

18.6

88

1

6.1

59

9.1

18.2

89

1

5.8

60

9.0

17.8

90

1

5.5

61

8.9

17.4

91

1

5.3

62

8.7

17.0

92

1

5.0

63

8.5

16.6

93

1

4.8

64

8.3

16.2

94

1

4.6

65

8.1

15.7

95

1

4.4

66

7.9

15.3

96

1

4.2

67

7.6

14.9

97

1

4.0

68

7.3

14.4

98

1

3.8

69

7.0

14.0

99

1

3.7

70

6.6

13.5

100 or more

1

3.5

Table 2 – Determining the payment valuation factor

This table prescribes which maximum and minimum payment factors to use based on the person's age in whole years on the commencement day of the income stream and then on each 1 July thereafter for income streams commencing from 1 January 2006 to 30 June 2007.

Age

Maximum payment valuation factor

Minimum payment valuation factor

Age

Maximum payment valuation factor

Minimum payment valuation factor

41

12

25.3

71

8.0

14.6

42

12

25.0

72

7.6

14.2

43

12

24.8

73

7.2

13.7

44

12

24.5

74

6.7

13.3

45

12

24.2

75

6.2

12.8

46

12

24.0

76

5.7

12.3

47

12

23.7

77

5.1

11.9

48

12

23.4

78

4.5

11.4

49

12

23.1

79

3.8

10.9

50

12

22..8

80

3.1

10.5

51

11.9

22.5

81

2.3

10.0

52

11.8

22.2

82

1.4

9.6

53

11.8

21.8

83

1

9.1

54

11.7

21.5

84

1

8.7

55

11.5

21.1

85

1

8.3

56

11.4

20.8

86

1

7.9

57

11.3

20.4

87

1

7.5

58

11.2

20.1

88

1

7.2

59

11.0

19.7

89

1

6.9

60

10.9

19.3

90

1

6.6

61

10.7

18.9

91

1

6.3

62

10.5

18.5

92

1

6.0

63

10.3

18.1

93

1

5.8

64

10.1

17.7

94

1

5.5

65

9.9

17.3

95

1

5.3

66

9.6

16.8

96

1

5.1

67

9.3

16.4

97

1

4.9

68

9.1

16.0

98

1

4.7

69

8.7

15.5

99

1

4.5

70

8.4

15.1

100 or more

1

4.4

Table 3 - Determining the percentage factor

The following table describes which percentage factor to use depending on the person's age in whole years on the commencement day of the income stream and then on each 1 July thereafter.

Age

Percentage factor

Under 65

4

65 - 74

5

75 - 79

6

80 - 84

7

85 - 89

9

90 - 94

11

95 or more

14

For the financial years commencing on 1 July 2008 and ending 30 June 2013, temporary relief measures were applied by the Government in response to the Global Financial Crisis to allow all account based income stream recipients to elect to reduce their minimum annual payment to:

  • 50% of the required minimum payment for the financial years commencing 1 July 2008 and ending 30 June 2011; and
  • 75% of the required minimum payment for the financial years commencing 1 July 2011 and ending 30 June 2013.

These temporary relief measures ceased to apply from 1 July 2013.


The commencement day in relation to an income stream is the first day of the period to which the first income stream payment relates. This is usually one instalment period before the date of the first payment.

 

 

According to section 5J(1) of the VEA, an income stream includes:

  • an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or
  • an income stream arising under a public sector scheme (within the meaning of that Act); or
  • an income stream arising under a retirement savings account; or
  • an income stream provided by a life insurance business (within the meaning of the Life Insurance Act 1995); or
  • an income stream provided by a friendly society (within the meaning of the Income Tax Assessment Act 1996); or
  • an income stream designated in writing by the Commission for the purposes of this definition, having regard to the guidelines determined under subsection 5J(1F) of the VEA;
  • but does not include any of the following:
  • available money;
  • deposit money;
  • a managed investment;
  • a listed security;
  • a loan that has not been repaid in full;
  • an unlisted public security; or
  • gold, silver or platinum bullion.