Asset-tested Income Streams - Lifetime

Date amended:

1 Jul 2019

External

Policy

Asset-tested income stream (lifetime)

Asset-tested income streams (lifetime) are income streams where:

the income stream was purchased or acquired on or after 1 July 2019;
the income stream ensures that, once the income stream starts paying income, it continues to pay for the remainder of the product owner’s life; and
the amount of payment made by the income stream considers the age, life expectancy or other factors relevant to the mortality of the product owner.

Note: lifetime income streams purchased before 1 July 2019 are assessed as asset‑tested income streams (long term) or could be asset-test exempt if purchased before 20 September 2007.

The table below gives an overview of the assets and income test treatment of different types of asset-tested income streams (lifetime). A full outline can be found at 10.5.4 Means Test Assessment of Asset-Tested Income Streams (lifetime).

Type	Assets test	Income test
Purchased with superannuation monies	BEFORE the assessment day, there is no assessable asset value. ON OR AFTER the assessment day, and UP TO AND INCLUDING the threshold day, 60 per cent of the purchase amount is assessed as an asset. AFTER the threshold day, 30 per cent of the purchase amount is assessed as an asset. Asset value may be higher if the income stream has a high surrender value or death benefit.	BEFORE the assessment day, there is no assessable income. ON OR AFTER the assessment day, 60 per cent of the annual payment is assessed as income.
Purchased with non-superannuation monies	BEFORE the assessment day 100 per cent of the purchase amount is assessed as an asset. ON OR AFTER the assessment day, and UP TO AND INCLUDING the threshold day, 60 per cent of the purchase amount is assessed as an asset. AFTER the threshold day, 30 per cent of the purchase amount is assessed as an asset. Asset value may be higher if the income stream has a high surrender value or death benefit.	BEFORE the assessment day, the purchase amount is deemed using the deeming rates (see 9.5) ON OR AFTER the assessment day, 60 per cent of the annual payment is assessed as income.

Type

Assets test

Income test

Purchased with superannuation monies

BEFORE the assessment day,
there is no assessable asset value.

ON OR AFTER the assessment day, and UP TO AND INCLUDING the threshold day,
60 per cent of the purchase amount is assessed as an asset.

AFTER the threshold day,
30 per cent of the purchase amount is assessed as an asset.

Asset value may be higher if the income stream has a high surrender value or death benefit.

BEFORE the assessment day, there is no assessable income.

ON OR AFTER the assessment day,
60 per cent of the annual payment is assessed as income.

Purchased with non-superannuation monies

BEFORE the assessment day
100 per cent of the purchase amount is assessed as an asset.

ON OR AFTER the assessment day, and UP TO AND INCLUDING the threshold day,
60 per cent of the purchase amount is assessed as an asset.

AFTER the threshold day,
30 per cent of the purchase amount is assessed as an asset.

Asset value may be higher if the income stream has a high surrender value or death benefit.

BEFORE the assessment day, the purchase amount is deemed using the deeming rates (see 9.5)

ON OR AFTER the assessment day,
60 per cent of the annual payment is assessed as income.

VEA: section 5JE;
subsection 46YB Income – asset-tested income stream (lifetime);
section 52BAA Value of asset-tested income streams (lifetime) that are managed investments;
section 52BAB Value of asset-tested income streams (lifetime) that are not managed investments.

More: 10.5.4 Means Test Assessment of Asset-tested Income Streams (lifetime)