Account-based income streams
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).
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.