1.1.A.306 Asset-test exempt income stream

Usage

This definition applies to all payments.

Definition

An ATE income stream:

  • is payable for
    • the income support recipient's lifetime for lifetime products, OR
    • a term based on the income support recipient's life expectancy, or their reversionary partner's life expectancy (if relevant), AND
  • has
    • a fixed annual payment (1.1.A.155), OR
    • may be indexed at no greater than 5% or CPI + 1%, (but indexation CANNOT be a negative value for lifetime or life expectancy products), OR
    • has a payment determined at the start of each financial year based on set payment factors for market-linked products, AND
  • commences on the day it is purchased or acquired, AND
  • converts the purchase price wholly into income, AND
  • has nil RCV, AND
  • is non-commutable except in limited circumstances, AND
  • has limited reversionary benefits, AND
  • cannot be used as security for borrowing, AND
  • for lifetime and life expectancy products provided by a class of providers (SMSFs or SAFs), a current actuarial certificate is in force (4.9.4.40).

Note:

  • For ATE income streams purchased or acquired before 20 September 2004, refer to 4.9.2.10.
  • For ATE income streams purchased or acquired on or after 20 September 2004, and before 20 September 2007, refer to 4.9.2.15.

Act reference: SSAct section 9(1)-'life expectancy', section 9(1)-'purchase price', section 9(1)-'residual capital value', section 9A Meaning of asset-test exempt income stream-lifetime income streams, section 9B Meaning of asset-test exempt income stream-life expectancy income streams

Policy reference: SS Guide 4.9.2.10 Characteristics of pre-20/09/2004 Asset-Test Exempt Income Streams, 4.9.2.15 Characteristics of Asset-Test Exempt Income Streams Purchased from 20/09/2004 & before 20/09/2007, 4.9.4.40 Actuarial Valuation Certificate for Lifetime or Life Expectancy ATE Income Streams Paid from SMSFs or SAFs

Last reviewed: 1 July 2019