For asset-tested income streams (lifetime), the threshold day is the day the standard assets test assessment steps down from 60 per cent of the purchase amount to 30 per cent of the purchase amount.

VEA: subsection 52BAB(3)

Policy reference: 10.5.4 Means Test Assessment of Asset-tested Income Streams (lifetime)

Determining a person’s threshold day
(where the person is not a reversionary beneficiary)

A person’s threshold day in relation to their asset-tested income stream (lifetime) is worked out using the following method:

Step 1

Determine the life expectancy of a 65 year old man, rounded down to the nearest whole year, that applied on the person’s assessment day (see table below).

Step 2

Increase the number at Step 1 by 65.

Step 3

If the income stream is not a joint income stream, the person’s threshold day is the later of the following days:

  • the day before the person reaches the age in years worked out in Step 2;
  • the last day of a 5 year period beginning on the person’s assessment day.

Step 4

If the income stream is a joint income stream, the person’s threshold day is the later of the following days:

  • the day before the oldest of the joint owners reaches the age in years worked out in Step 2;
  • the last day of a 5 year period beginning on the person’s assessment day.

VEA: subsection 52BAB(10)

Policy reference: 10.5.4 Means Test Assessment of Asset-tested Income Streams (lifetime)

Determining a person’s threshold day (where the person is a reversionary beneficiary)

If an asset-tested income stream (lifetime) reverts to a person as a reversionary beneficiary, and the original owner had passed their assessment day before the income stream reverted, then the threshold day is the same threshold day the original owner of the income stream would have had.

If this calculation results in a threshold day before the reversionary beneficiary’s assessment day, then the person’s threshold day is the person’s assessment day.

If an asset-tested income stream (lifetime) reverts to a person as a reversionary beneficiary, and the original owner had not yet passed their assessment day before the income stream reverted, then the threshold day for the reversionary beneficiary is worked out in the same way as for those who are not reversionary beneficiaries using the method statement above.

VEA: subsection 52BAB(11)

Policy reference: 10.5.4 Means Test Assessment of Asset-tested Income Streams (lifetime)

Relevant life expectancy of a 65 year old man

The following table shows the relevant life expectancy of a 65 year old man to be used when determining a person’s threshold day. The relevant life expectancy is determined with reference to the most recent Australian Government Actuary Life Tables.

If the person’s assessment day, in relation to the income stream, is in the period:

Then the relevant life expectancy of a 65 year old man is:

1 July 2019 to present

19.22 years

VEA: subsection 52BAB(10), Veterans' Entitlements (Number of expected years) Instrument 2019.

More: 10.5.4 Means Test Assessment of Asset-tested Income Streams (lifetime)