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Payment Factors for Market Linked Income Streams

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Last amended: 3 September 2013

Use of payment factors

These payment factors are used in determining the annual payment to be paid by a market linked income stream.

Rules determining the choice of payment factor

The following rules determine which payment factor is to be used:

  • for income streams commencing between 1 July and 31 December, the remaining term of the income stream is rounded down to the next whole number
  • for income streams commencing between 1 January and 30 June, the remaining term of the income stream is rounded up to the next whole number

 

This table prescribes which minimum payment factors to use based for the term of the income stream at its commencement day and then for the remaining term of the income stream on each 1 July thereafter.

 

Remaining term of income stream (years)

Payment factor

Remaining term of income stream (years)

Payment factor

70

26.00

35

20.00

69

25.91

34

19.70

68

25.82

33

19.39

67

25.72

32

19.07

66

25.62

31

18.74

65

25.52

30

18.39

64

25.41

29

18.04

63

25.30

28

17.67

62

25.19

27

17.29

61

25.07

26

16.89

60

24.94

25

16.48

59

24.82

24

16.06

58

24.69

23

15.62

57

24.55

22

15.17

56

24.41

21

14.70

55

24.26

20

14.21

54

24.11

19

13.71

53

23.96

18

13.19

53

23.80

17

12.65

51

23.63

16

12.09

50

23.46

15

11.52

49

23.28

14

10.92

48

23.09

13

10.30

47

22.90

12

9.66

46

22.70

11

9.00

45

22.50

10

8.32

44

22.28

9

7.61

43

22.06

8

6.87

42

21.83

7

6.11

41

21.60

6

5.33

40

21.36

5

4.52

39

21.10

4

3.67

38

20.84

3

2.80

37

20.57

2

1.90

36

20.29

1 or less

1.00

 

For the period commencing on 1 July 2008 and ending 30 June 2013, temporary relief measures were applied by the Government in response to the Global Financial Crisis to allow all account-based income stream recipients to elect to reduce their minimum annual payment to :

  • 50% of the required minimum payment for the period commencing 1 July 2008 and ending 30 June 2011; and
  • 75% of the required minimum payment for the period commencing 1 July 2011 and ending 30 June 2013.

These temporary relief measures ceased to apply from 1 July 2013.

Temporary relief was again applied over the period 1 July 2019 to 30 June 2022 in response to the Coronavirus pandemic.  Income stream recipients were able to elect to reduce their minimum annual payment to 50%  of the required minimum payment for the periodcommencing 1 July 2019 to 30 June 2022.


 

Annual payment means the amount payable to the person for the year under the income stream.

According to subsection 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 as life insurance business by a life company registered under section 21 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;
    • an investment in a public unit trust;
    • an investment in an insurance bond;
    • an investment with a friendly society;
    • an investment in a superannuation fund;
    • an investment in an approved deposit fund;
    • an investment in an ATO small superannuation account;
  • a listed security;
  • a loan that has not been repaid in full;
  • an unlisted public security; 
  • gold, silver or platinum bullion; or
  • a payment of compensation in relation to a person's:
    • inability to earn, derive or receive income from remunerative work; or
    • total and permanent disability or incapacity.