9.5.7 Deemed Income from Account-Based Income Streams

Account-based income streams

Account-based income streams are retirement or transition to retirement income stream products purchased with superannuation money.  Account-based income streams are tax free from 60 years of age.  Account-based income streams owners are required by superannuation rules to drawdown at least a minimum amount of their account balance every year.

From 1 January 2015 account-based income streams are regarded as financial assets and have deemed income calculated on the current account balance if:

• the income stream commenced on or after 1 January 2015, or
• the income stream commenced before 1 January 2015 and the owner of the income stream has not continuously received an income support payment since 31 December 2014.

Other account-based income streams will continue to be assessed under the rules which applied prior to 1 January 2015.

Reverted account-based income streams

Account-based income streams that were assessed under the pre-1 January 2015 rules, but reverted to a reversionary beneficiary under the income stream contract following the death of the original owner will continue to be assessed under the pre-1 January 2015 rules if the reversionary beneficiary has been continuously in receipt of an income support payment since the reversion of the income stream.

Family Law account-based income streams

Account-based income streams that were assessed under the pre-1 January 2015 rules, but were commuted as part of a divorce/separation settlement (a court order under Part VIIIAA or Part VIIIB of the Family Law Act 1975) and an account-based income stream is purchased by direct rollover of the proceeds, will continue to be assessed under the pre-1 January 2015 rules if the owner has been continuously in receipt of an income support payment since the commencement of the new income stream.