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9.5.7 Deemed Income from Account-Based Income Streams

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Last amended 
30 March 2015
Account-based income streams
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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.

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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.

Veterans' Entitlements Act 1986  section 5J(1) definition of financial investment includes:

(i) an asset tested income stream (long term) that is an account based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or

(ii)  an asset tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection (1G).

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