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Asset-tested income stream (short term)
An income stream is an asset-tested short term income stream if the term of the income stream is five years or less and it is not any of the following:
- an asset-test exempt income stream;
- an asset-tested income stream (long term); or
- an asset-tested income stream (lifetime).
Legislation: subsection 5J(1) Veterans' Entitlements Act 1986
An income stream is an asset-test exempt income stream if it is purchased before 20 September 2007 and must be:
- paid for the income support recipient's lifetime for lifetime products; or
- paid for a fixed period based on the income support recipient's life expectancy or that of their reversionary partner's;
- make payments at least annually;
- specify the payment to be made in the first year;
- not pay less than the previous year's payments in any year;
- limit indexation to no more than 5% or CPI plus 1% in any year;
- convert the purchase price wholly into income;
- have no residual capital value;
- have limited commutation;
- have limited reversionary benefits;
- have limited transferability;
- not be able to be borrowed against; and
- in respect of market-linked income streams, must make payments according to the formula in the Superannuation Industry (Supervision) Regulations 1994.
Veterans' Entitlements Act 1986:
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