Calculating the asset value
This table shows how to calculate the asset value of Allocated (Account-based) and Market Linked Income Streams where the superannuation agreement or court order specifies that payments from the original Family Law Affected Income Stream, owned by the member, are to be split with the former partner (non-member) on a percentage basis.
For Asset-test Exempt Income Streams, Defined Benefit Income Streams, Asset-tested Long Term Income Streams or Lifetime Income Streams, see the relevant pages under 10.5.6 Family Law Affected Income Streams.
For Allocated (Account-based) or Market Linked Income Streams:
Step | Action |
1 | Determine the percentages in the payment split for the owner (MSPROP) and the former partner (NMSPROP). |
2 | Calculate the asset value of the primary FLA income stream using the formula: MSPROP x account balance of original FLA income stream at the operative time Calculate the asset value of the secondary FLA income stream using the formula: NMSPROP x account balance of original FLA income stream at the operative time |
Although there are two separate income streams (the primary and secondary FLA income streams), there is only one account balance. The account balance is only notionally split between the primary and secondary income streams.
Impact of subsequent commutations on asset value
Any commutation made after the operative time is apportioned between the primary and secondary FLA income streams in the same proportion as the original percentage payment split. The commutation will affect the account balance and therefore the asset value of both the primary and secondary FLA income streams.
Subsequent reviews of asset value
FLA income streams are subject to the same asset value reviews as other income streams. The first six or twelve monthly review of the primary and/or secondary FLA income streams is taken from the time of the previous review date of the original FLA income stream. If the original FLA income stream has not yet had its first review, the review of the primary and/or secondary FLA income stream is taken from the commencement day of the original FLA income stream.
Income test assessment
This table shows how to calculate the assessable income from the income stream.
Step | Action |
1 | Determine the percentages in the payment split for the owner (MSPROP) and the former partner (NMSPROP). Determine the gross income for the owner and the former partner. |
2 | Calculate the notional purchase price (NPP) at the operative time for the original FLA income stream. The NPP = the purchase price of the original FLA income stream on the commencement day less any commutations made before the operative time. |
3 | Calculate the NPP for the primary and secondary FLA income streams by applying MSPROP and NMSPROP respectively to the NPP. NPP for the primary FLA income stream (MSNPP) = NPP x MSPROP NPP for the secondary FLA income stream (NMSNPP) = NPP x NMSPROP |
4 | Calculate the deduction amount for the primary and secondary FLA income streams. Deduction for the owner = MSNPP ÷ relevant number Deduction for the former partner = NMSNPP ÷ relevant number Relevant number is the relevant number of the original FLA income stream on its commencement day. |
5 | Reduce the gross income of the primary and secondary FLA income streams by their respective deduction amounts. |
Impact of subsequent commutations on assessable income
Any commutations made after the operative time are apportioned between the primary and secondary FLA income streams in the same proportion as the original percentage payment split. The commutation will affect the gross income, NPP and therefore the deduction amount for both the primary and secondary FLA income streams.