An income stream is an asset-test exempt income stream if it is purchased before 20 September 2007 and must be:

• paid for the income support recipient's lifetime for lifetime products; or
• paid for a fixed period based on the income support recipient's life expectancy or that of their reversionary partner's;

and:

• make payments at least annually;
• specify the payment to be made in the first year;
• not pay less than the previous year's payments in any year;
• limit indexation to no more than 5% or CPI plus 1% in any year;
• convert the purchase price wholly into income;
• have no residual capital value;
• have limited commutation;
• have limited reversionary benefits;
• have limited transferability;
• not be able to be borrowed against; and
• in respect of market-linked income streams, must make payments according to the formula in the Superannuation Industry (Supervision) Regulations 1994.

Legislative reference:

Veterans' Entitlements Act 1986:

• section 5JA - lifetime income streams;
• section 5JB - life expectancy income streams; or
• section 5JBA - market-linked income streams.