VEA [2]
An asset-tested income stream (long term) [5] is an income stream [5] that:
An asset-tested income stream (long term) is an income stream wher ethe specified term of the contract is:
If the income stream was purchased before 20 September 2007 and doesn not meet all the characteristics of an asset-test exempt income stream, it is an asset-tested income stream (long term).
Income streams that are paid for the life of the owner and were purchased on or after 1 July 2019 are classified as asset-tested income streams (lifetime).
The term of an asset-tested income stream (long term) is also known as its relevant number [5]. For an asset-tested income stream (long term) paid for a fixed term, the relevant number is the fixed term that the income stream is payable for as specified in the contract. For asset-tested income streams (long term) paid for life and for all allocated income streams, the relevant number is either:
When determining the relevant number, the actual life expectancy factors are used (that is, there is no rounding). If there is a guaranteed period [5], the relevant number will be based on the life expectancy, not the guaranteed period.
An account-based income stream, also known as an allocated pension or transition to retirement pension, is an asset-tested (long term deemed) income stream and is treated as a financial asset and deemed if either:
Under grandfathering provisions, an account-based income stream is not an asset-tested (long term deemed) income stream, and will continue to be assessed as an asset-tested (long term) income stream, if it:
Under grandfathering provisions, an account-based income stream is not an asset-tested (long term deemed) income stream, and will continue to be assessed as an asset-tested (long term) income stream, if it:
An asset-tested lifetime income stream is an income stream that:
More: 10.5.2 Asset-tested Income Streams - Lifetime and 10.5.4 Income and Assets Assessment of Income Streams.
VEA: section 5JE.
An income stream is classified as an asset tested income stream (short term) [5], when the term is five years or less and it is not an:
Most income streams purchased on or after 20 September 2007 are asset-tested income streams. There are some exceptions for income streams purchased from the commutation of an asset-test exempt income stream, if certain conditions are met.
More [8]
Relevant number
Section 10.5.7 Life Expectancy Tables, Pension Valuation Factors and Payment Factors [9]
More ? (go back) [12]
An income stream is an asset-tested long term income stream if it is:
Note: income streams that pay for the life of an individual or individuals, purchased or acquired on or after 1 July 2019, are assessed as asset-tested lifetime income streams.
Legislative reference: subsection 5J(1) Veterans' Entitlements Act 1986
According to subsection 5J(1) of the VEA [15], an income stream includes:
but does not include any of the following:
An income stream is an asset-test exempt income stream if it is purchased before 20 September 2007 and must be:
and:
Legislative reference:
Veterans' Entitlements Act 1986:
Life expectancy is the length of time a person is expected to live and has the same meaning as 'life expectancy factor' under section 27H of the Income Tax Assessment Act 1936.
An income stream's relevant number is the length of time an income stream is paid for. It can be a fixed term or the life expectancy factor of the payee or reversionary beneficiary.
A guaranteed period ensures that the pension payments will continue to the estate should the owner and the reversionary beneficiary die during the guaranteed period.
An income stream is an asset-tested short term income stream if the term of the income stream is five years or less and it is not any of the following:
Legislation: subsection 5J(1) Veterans' Entitlements Act 1986
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16363%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16363#tgt-cspol_part10_ftn632
[3] http://www.comlaw.gov.au/Series/C2004A03268
[4] https://clik.dva.gov.au/book/export/html/16363#ref-cspol_part10_ftn632
[5] https://clik.dva.gov.au/%23
[6] https://clik.dva.gov.au/book/export/html/16363#tgt-cspol_part10_ftn634
[7] https://clik.dva.gov.au/book/export/html/16363#tgt-cspol_part10_ftn635
[8] https://clik.dva.gov.au/book/export/html/16363#tgt-cspol_part10_ftn633
[9] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/105-income-streams/1057-life-expectancy-tables-pension-valuation-factors-and-payment-factors
[10] https://clik.dva.gov.au/book/export/html/16363#ref-cspol_part10_ftn634
[11] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions
[12] https://clik.dva.gov.au/book/export/html/16363#ref-cspol_part10_ftn635
[13] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/105-income-streams/1053-general-provisions-assessing-income-streams/determining-what-proportion-asset-test-exempt-income-stream-exempt
[14] https://clik.dva.gov.au/book/export/html/16363#ref-cspol_part10_ftn633
[15] http://clik.dva.gov.au/legislation-library