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A commutation, in relation to an income stream, is the conversion of part or all of the future income stream payments into a lump sum. A commutation is similar to a withdrawal.
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.
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