VEA ? [2]
The Commission has made several determinations in the form of legislative instruments that regardless of its commencement day [3], a defined benefit income stream [3] is 100% asset test exempt.
VEA ? [4]
An asset test exempt income stream [3] commencing before 20 September 2004 is 100% asset test exempt.
VEA ? [5]
Most asset test exempt income streams commencing on or after 20 September 2004 and before 20 September 2007 are 50% asset test exempt. However, principles have been developed allowing the Commission to determine that certain asset test exempt income streams commencing on or after 20 September 2004 and before 20 September 2007 are 100% asset test exempt. The income stream must:
Most income streams commencing on or after 20 September 2007 are not asset test exempt. However, principles have been developed allowing the Commission to determine that certain income streams commencing on or after 20 September 2007 are either 50% or 100% asset test exempt. The income stream must:
The level of asset test exemption (50% or 100%) will be the same as the asset test exemption applicable to the existing asset test exempt income stream.
In general terms, the Principles under which a new income stream can retain its asset test exemption are limited to commutations made to enable:
The original income stream must be commuted in full, in one complete transaction, and the commuted amount rolled over to the new income stream, except for commutations made in relation to payment splits under the Family Law Act, or payment of a superannuation contributions surcharge debt, excess contributions tax or hardship amount, which can be partial commutations. A partial commutation based on a partial transfer of assets cannot be recognised, outside of the limited allowed circumstances, including in those cases where the transfer of the remaining asset value has been delayed.
Full details of each allowable commutation event are outlined in the Veterans' Entitlements (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022 (legislation.gov.au) [8]
Legislation library\Income Support\Income Streams\1999/6 – Lifetime Income Stream [9]
Legislation library\Income Support\Income Streams\1999/5 – Lifetime Income Stream Guidelines [9]
Legislation library\Income Support\Income Streams\1998/12 – Lifetime Income Stream [9]
Legislation library\Income Support\Income Streams\1998/11 – Lifetime Income Stream [9]
Legislation library\Income Support\Income Streams\1998/10 – Lifetime Income Stream Guidelines [9]
Legislation Library – Principles for determining whether an income stream is asset test exempt
Income streams - VE-PRINCIPLES/2011-Retention of Exemption for Asset-test Exempt Income Streams [9]
Legislation Library – Principles for determining whether an income stream is asset test exempt
Income streams - VE-PRINCIPLES/2011-Retention of Exemption for Asset-test Exempt Income Streams [9]
The commencement day in relation to an income stream [3] is the first day of the period to which the first income stream payment relates. This is usually one instalment period before the date of the first income payment.
The commencement day cannot occur prior to:
Legislative reference: subsection 5J(1) of the Veterans' Entitlements Act 1986.
A defined benefit income stream is an income stream [3] where the payments are not fully determined by a purchase price [3]. Instead, payments are made with reference to a set formula based on:
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:
A commutation, in relation to an income stream [3], is the conversion of part or all of the future income stream payments into a lump sum. A commutation is similar to a withdrawal.
Superannuation contributions surcharge has the meaning that it has in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.
A person may apply to the Commission in writing to be allowed to commute the whole or part of an income stream because of extreme financial hardship. According to s.5JA of the VEA, the Commission may determine an amount as allowable commutation if these conditions are satisfied:
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16370%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16370#tgt-cspol_part10_ftn647
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16370#tgt-cspol_part10_ftn648
[5] https://clik.dva.gov.au/book/export/html/16370#tgt-cspol_part10_ftn649
[6] https://clik.dva.gov.au/book/export/html/16370#tgt-cspol_part10_ftn650
[7] https://clik.dva.gov.au/book/export/html/16370#tgt-cspol_part10_ftn651
[8] https://www.legislation.gov.au/Details/F2022L00413
[9] https://clik.dva.gov.au/legislation-library
[10] https://clik.dva.gov.au/book/export/html/16370#ref-cspol_part10_ftn647
[11] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[12] https://clik.dva.gov.au/book/export/html/16370#ref-cspol_part10_ftn648
[13] https://clik.dva.gov.au/book/export/html/16370#ref-cspol_part10_ftn649
[14] https://clik.dva.gov.au/book/export/html/16370#ref-cspol_part10_ftn650
[15] https://clik.dva.gov.au/book/export/html/16370#ref-cspol_part10_ftn651
[16] http://www.comlaw.gov.au/Series/C2004A03268