Policy

Assets assessment of legally irrecoverable loan or debt

A loan or debt that is [glossary:legally irrecoverable:157] is a [glossary:disregarded asset:654], because it has no value.

Legally irrecoverable

A loan or debt is [glossary:legally irrecoverable:157] solely if it has not been repaid in full or in part according to the terms of the loan agreement and within the time frame specified in the statute of limitations of the relevant State. A loan or debt is not legally irrecoverable solely because there is no documentation of the loan or debt agreement.

Calculating the asset value

This table shows how to calculate the asset value of an asset-test exempt income stream where the superannuation agreement or court order specified 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 Allocated or Account-based 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.

Last amended: 14 February 2011

How to use life expectancy tables

The following table shows how to select and use the appropriate life expectancy table in the assessment of an income stream.

Last amended: 13 May 2008

How to use life expectancy tables

The following table shows how to select and use the appropriate [glossary:life expectancy:348] table in the assessment of an [glossary:income stream:406].

Distribution of capital on wind-up to an attributable stakeholder

Distributions of capital to an attributable stakeholder on the wind-up of a private trust or company are not regarded as income for pension purposes (provided the distribution is in proportion to the [glossary:attribution percentage:396] of the attributable stakeholder). However, the assets of the structure are still attributable in the proportions previously determined.

Last amended: 10 March 2011

Documentation required to ensure ATE compliance for SMSFs and SAFs

In addition to the income stream schedule, a self managed superannuation fund (SMSF) or small APRA fund (SAF) must supply the following documentation to determine whether an income stream is an [glossary:asset test exempt income stream:236][glossary:.:]:

    VEA

Definition of life insurance policies

The following are assessed as life insurance policies:

• conventional life insurance policies,
• whole of life insurance policies,
• endowment insurance policies, and
• pure endowment insurance policies.

These products have an investment component and may have a surrender value. Whereas, products such as term insurance, trauma insurance, total and permanent disablement insurance, income protection insurance and business insurance cover do not have an investment component or surrender value.

Constructive trust

A constructive trust arises where an individual can establish that in spite of being the legal owner of an asset, that they only hold this asset on behalf of someone else. Constructive trusts are not common and in most cases a legal opinion will need to be sought to confirm the existence of such a trust. A constructive trust is imposed on a person by a court whenever the court considers that it would be unconscionable to deny another person's claimed interest in that property.