{"id":"F2022L00417","name":"Social Security (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022","slug":"social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":102347,"registerId":"commonwealth-F2022L00417-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"## Part 1 Preliminary\n\n#### 1 Name\n\n This instrument is the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022.\n\n#### 2 Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

  1. The whole of this instrument

On the day after this instrument is registered

30 March 2022

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n#### 3 Authority\n\n This instrument is made under paragraphs (a) and (b) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n (a) asset-test exempt income stream;\n (b) hardship amount;\n (b) income stream.\n In this instrument:\n\n> 2005 Principles means the Social Security (Partially Asset‑test Exempt Income Stream — Exemption) (FaHCSIA) Principles 2005 as made.\n\n> 2007 Principles means the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) (FaCSIA) Principles 2007.\n\n> 2011 Principles means the Social Security (Retention of exemption for asset-test exempt income streams) (DSS) Principles 2011.\n\n> Act means the Social Security Act 1991.\n\n> benefit fund has the meaning given by subsection 16B(1) of the Life Insurance Act 1995.\n\n> defined benefit pension has the meaning given by regulation 9.04E of the Superannuation Industry (Supervision) Regulations 1994.\n\n> immediate annuity means an annuity that is presently payable.\n\n> life company has the meaning given in the Dictionary to the Life Insurance Act 1995.\n\n> regulated superannuation fund has the meaning given by subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.\n\n> self managed superannuation fund has the meaning given by sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.\n\n> statutory fund has the meaning given by section 29 of the Life Insurance Act 1995.\n\n> sub-fund means a sub-fund within a regulated superannuation fund that is taken to be a regulated superannuation fund for the purposes of section 69A of the Superannuation Industry (Supervision) Act 1993.\n\n> successor fund has the meaning given by subregulation 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994.\n\n> third party has the meaning given by section 90AB of the Family Law Act 1975.\n\n#### 5 Schedules\n\n Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n#### 6 Purpose\n\n These Principles specify:\n (a) under Part 2 — the criteria that exclude an asset-test exempt income stream from the class of partially asset‑test exempt income streams established by paragraph (a) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act; and\n (b) under Part 3 — the criteria to be satisfied by an income stream covered by paragraph (b) of that definition.\n\n> Note Section 1118 of the Act provides for certain assets to be disregarded in calculating the value of a person’s assets for the purposes of the assets test. Paragraph 1118(1)(d) of the Act provides that the value of an asset‑test exempt income stream, other than a partially asset‑test exempt income stream, is to be disregarded for the purposes of that calculation. Paragraph 1118(1)(da) of the Act provides that only half of the value of a partially asset‑test exempt income stream is to be disregarded for the purposes of the assets test.\n\n## Part 2 Asset‑test exempt income streams\n\n#### 7 Principles\n\n For subparagraph (a)(iii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the Principles are the Principles set out in this Part.\n\n> Note For the definition of asset‑test exempt income stream, see subsection 9(1) of the Act.\n\n#### 8 Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004\n\n (1) These Principles cover an asset‑test exempt income stream if:\n (a) the income stream (the present income stream) is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004 from funds arising from the commutation of another asset‑test exempt income stream (the original income stream); and\n (c) the original income stream was purchased before 20 September 2004; and\n (d) the original income stream is a kind of income stream to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (c) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (d) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it is not an income stream to which section 10 or 11 of these Principles applies; and\n (c) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (d) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. At the time of the purchase, J and H were members of a couple together. On 1 December 2005, J and H ceased to be members of a couple together. On 15 December 2005, J commutes the original income stream and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by section 9A or 9B of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2002, P purchased a 100% asset-test exempt income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. On 1 September 2022, the Secretary is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) it is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) it:\n (i) is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 9 Asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it results from the transfer, on or after 20 September 2004, of another income stream (the original income stream) to a successor fund; and\n (c) the original income stream was covered by section 9A or 9B of the Act; and\n (d) the original income stream was provided by a regulated superannuation fund; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 10 Asset‑test exempt income stream resulting from payment split\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 11 Asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. At the time of the purchase, J and H are partnered. On 1 February 2023, J and H separate. On 15 February 2023, J commutes the original income stream in response to a Family Court order and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 12 Asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 13 Asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 14 Asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. On 3 March 2023, J commutes part of the new income stream to pay a hardship amount, and J purchases another income stream (the further income stream) from the remaining capital backing the new income stream. The further income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 15 Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary; and\n (c) it is not sourced from a self managed superannuation fund; and\n (d) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a self managed superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) until the commencement of these Principles, was covered by the 2007 Principles; or\n (iii) was covered by these Principles.\n\n> Note: Example\n\n> Note: F and W are trustees of their self managed superannuation fund. They both have lifetime asset‑test exempt income streams that were purchased on 1 July 2003 when F was 65 and W was 64. F dies on 26 January 2023. W subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. W commutes her asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 16 Asset‑test exempt income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21 (2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 17 Asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an asset-test exempt income stream that is a family law affected income stream that does not meet the requirements of subsection 9A(2) or 9B(2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream is derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the income stream is derived from an original family law affected income stream:\n (i) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975; and\n (ii) the income stream was purchased on or after 20 September 2004; and\n (c) the original family law affected income stream from which the income stream is derived as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased before 20 September 2004; and\n (d) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (e) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (f) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) the Secretary is satisfied that there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 18 Commutation of asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (d) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a regulated superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n## Part 3 Partially asset‑test exempt income streams\n\n#### 19 Principles\n\n For subparagraph (b)(ii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the principles are the Principles set out in this Part.\n\n#### 20 Partially asset‑test exempt income stream resulting from original partially asset‑test exempt income stream purchased on or after 20 September 2004 but before 20 September 2007\n\n (1) These Principles cover an income stream if:\n (a) the income stream (the present income stream) is purchased by the primary beneficiary on or after 20 September 2007 from the commutation of a partially asset‑test exempt income stream (the original income stream); and\n (b) the original income stream was purchased on or after 20 September 2004 and before 20 September 2007; and\n (c) the original income stream is a kind of income stream in relation to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (b) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (c) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is not an income stream to which section 22 or 23 of these Principles applies; and\n (b) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (c) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2005, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. The income stream has a 50% exemption from the social security assets test. At the time of the purchase, J and H were members of a couple together. On 1 December 2008, J and H ceased to be members of a couple together. On 15 December 2008, J commutes the original income stream and purchases another income stream (the new income stream) covered by section 9A) of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by subsection 9A(1) or 9B(1A) of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2005, P purchased an income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. The income stream has a 50% exemption from the social security assets test. On 1 September 2022, the Secretary of the Department of Social Services is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) the income stream is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) the income stream:\n (i) is an income stream to which paragraph 9A(1)(b) or 9B(1A)(b) of the Act applies or would have applied if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply, and in relation to which the Secretary is not satisfied as required by that paragraph; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 21 Partially asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an income stream if:\n (a) it results from the transfer, on or after 20 September 2007, of another income stream (the original income stream) to a successor fund; and\n (b) at the time of transfer, the original income stream was:\n (i) covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) provided by a regulated superannuation fund; and\n (c) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 22 Partially asset‑test exempt income stream resulting from payment split\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2005, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. The income stream has a 50% exemption from the social security assets test. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 23 Partially asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act, that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 24 Partially asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 25 Partially asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv was covered by these Principles.\n\n#### 26 Partially asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 27 Partially asset-test exempt market-linked income stream resulting from commutation of another partially asset-test exempt market-linked income stream\n\n These Principles cover an income stream if:\n (a) it is covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA (1) (a) (i) of the Act did not apply; and\n (b) it results from the commutation and rollover of all the assets supporting a partially asset-test exempt income stream (the original income stream); and\n (c) the original income stream was covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA(1)(a)(i) did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 28 Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary; and\n (b) it is not sourced from a self managed superannuation fund; and\n (c) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a self managed superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.\n\n> Note: Example\n\n> Note: G and A are trustees of their self managed superannuation fund. They both have market‑linked asset‑test exempt income streams that were purchased on 1 July 2005 when G was 65 and A was 64. G dies on 26 January 2015. A subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. A commutes her market‑linked asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9BA of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 29 Partially asset‑test income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (b) it results from an asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21(2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 30 Partially asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an income stream that is a family law affected income stream that does not meet the requirements of subsection 9A (2) or 9B (2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of one or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream was derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the original family law affected income stream from which the income stream is derived as a result of the operation of one or more orders under Part VIIIAA, or one or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased after 19 September 2004 and before 20 September 2007; and\n (c) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company, or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (d) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (e) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 31 Commutation of partially asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (c) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a regulated superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n This instrument is the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022.","sortOrder":1},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

  1. The whole of this instrument

On the day after this instrument is registered

30 March 2022

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.","sortOrder":2},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n This instrument is made under paragraphs (a) and (b) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act.","sortOrder":3},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n (a) asset-test exempt income stream;\n (b) hardship amount;\n (b) income stream.\n In this instrument:\n\n> 2005 Principles means the Social Security (Partially Asset‑test Exempt Income Stream — Exemption) (FaHCSIA) Principles 2005 as made.\n\n> 2007 Principles means the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) (FaCSIA) Principles 2007.\n\n> 2011 Principles means the Social Security (Retention of exemption for asset-test exempt income streams) (DSS) Principles 2011.\n\n> Act means the Social Security Act 1991.\n\n> benefit fund has the meaning given by subsection 16B(1) of the Life Insurance Act 1995.\n\n> defined benefit pension has the meaning given by regulation 9.04E of the Superannuation Industry (Supervision) Regulations 1994.\n\n> immediate annuity means an annuity that is presently payable.\n\n> life company has the meaning given in the Dictionary to the Life Insurance Act 1995.\n\n> regulated superannuation fund has the meaning given by subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.\n\n> self managed superannuation fund has the meaning given by sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.\n\n> statutory fund has the meaning given by section 29 of the Life Insurance Act 1995.\n\n> sub-fund means a sub-fund within a regulated superannuation fund that is taken to be a regulated superannuation fund for the purposes of section 69A of the Superannuation Industry (Supervision) Act 1993.\n\n> successor fund has the meaning given by subregulation 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994.\n\n> third party has the meaning given by section 90AB of the Family Law Act 1975.","sortOrder":4},{"sectionNumber":"5","sectionType":"section","heading":"Schedules","content":"#### 5 Schedules\n\n Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.","sortOrder":5},{"sectionNumber":"6","sectionType":"section","heading":"Purpose","content":"#### 6 Purpose\n\n These Principles specify:\n (a) under Part 2 — the criteria that exclude an asset-test exempt income stream from the class of partially asset‑test exempt income streams established by paragraph (a) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act; and\n (b) under Part 3 — the criteria to be satisfied by an income stream covered by paragraph (b) of that definition.\n\n> Note Section 1118 of the Act provides for certain assets to be disregarded in calculating the value of a person’s assets for the purposes of the assets test. Paragraph 1118(1)(d) of the Act provides that the value of an asset‑test exempt income stream, other than a partially asset‑test exempt income stream, is to be disregarded for the purposes of that calculation. Paragraph 1118(1)(da) of the Act provides that only half of the value of a partially asset‑test exempt income stream is to be disregarded for the purposes of the assets test.","sortOrder":6},{"sectionNumber":"Part 2","sectionType":"part","heading":"Asset‑test exempt income streams","content":"## Part 1 Preliminary\n\n#### 1 Name\n\n This instrument is the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022.\n\n#### 2 Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

  1. The whole of this instrument

On the day after this instrument is registered

30 March 2022

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n#### 3 Authority\n\n This instrument is made under paragraphs (a) and (b) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n (a) asset-test exempt income stream;\n (b) hardship amount;\n (b) income stream.\n In this instrument:\n\n> 2005 Principles means the Social Security (Partially Asset‑test Exempt Income Stream — Exemption) (FaHCSIA) Principles 2005 as made.\n\n> 2007 Principles means the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) (FaCSIA) Principles 2007.\n\n> 2011 Principles means the Social Security (Retention of exemption for asset-test exempt income streams) (DSS) Principles 2011.\n\n> Act means the Social Security Act 1991.\n\n> benefit fund has the meaning given by subsection 16B(1) of the Life Insurance Act 1995.\n\n> defined benefit pension has the meaning given by regulation 9.04E of the Superannuation Industry (Supervision) Regulations 1994.\n\n> immediate annuity means an annuity that is presently payable.\n\n> life company has the meaning given in the Dictionary to the Life Insurance Act 1995.\n\n> regulated superannuation fund has the meaning given by subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.\n\n> self managed superannuation fund has the meaning given by sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.\n\n> statutory fund has the meaning given by section 29 of the Life Insurance Act 1995.\n\n> sub-fund means a sub-fund within a regulated superannuation fund that is taken to be a regulated superannuation fund for the purposes of section 69A of the Superannuation Industry (Supervision) Act 1993.\n\n> successor fund has the meaning given by subregulation 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994.\n\n> third party has the meaning given by section 90AB of the Family Law Act 1975.\n\n#### 5 Schedules\n\n Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n#### 6 Purpose\n\n These Principles specify:\n (a) under Part 2 — the criteria that exclude an asset-test exempt income stream from the class of partially asset‑test exempt income streams established by paragraph (a) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act; and\n (b) under Part 3 — the criteria to be satisfied by an income stream covered by paragraph (b) of that definition.\n\n> Note Section 1118 of the Act provides for certain assets to be disregarded in calculating the value of a person’s assets for the purposes of the assets test. Paragraph 1118(1)(d) of the Act provides that the value of an asset‑test exempt income stream, other than a partially asset‑test exempt income stream, is to be disregarded for the purposes of that calculation. Paragraph 1118(1)(da) of the Act provides that only half of the value of a partially asset‑test exempt income stream is to be disregarded for the purposes of the assets test.\n\n## Part 2 Asset‑test exempt income streams\n\n#### 7 Principles\n\n For subparagraph (a)(iii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the Principles are the Principles set out in this Part.\n\n> Note For the definition of asset‑test exempt income stream, see subsection 9(1) of the Act.\n\n#### 8 Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004\n\n (1) These Principles cover an asset‑test exempt income stream if:\n (a) the income stream (the present income stream) is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004 from funds arising from the commutation of another asset‑test exempt income stream (the original income stream); and\n (c) the original income stream was purchased before 20 September 2004; and\n (d) the original income stream is a kind of income stream to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (c) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (d) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it is not an income stream to which section 10 or 11 of these Principles applies; and\n (c) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (d) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. At the time of the purchase, J and H were members of a couple together. On 1 December 2005, J and H ceased to be members of a couple together. On 15 December 2005, J commutes the original income stream and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by section 9A or 9B of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2002, P purchased a 100% asset-test exempt income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. On 1 September 2022, the Secretary is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) it is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) it:\n (i) is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 9 Asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it results from the transfer, on or after 20 September 2004, of another income stream (the original income stream) to a successor fund; and\n (c) the original income stream was covered by section 9A or 9B of the Act; and\n (d) the original income stream was provided by a regulated superannuation fund; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 10 Asset‑test exempt income stream resulting from payment split\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 11 Asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. At the time of the purchase, J and H are partnered. On 1 February 2023, J and H separate. On 15 February 2023, J commutes the original income stream in response to a Family Court order and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 12 Asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 13 Asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 14 Asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. On 3 March 2023, J commutes part of the new income stream to pay a hardship amount, and J purchases another income stream (the further income stream) from the remaining capital backing the new income stream. The further income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 15 Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary; and\n (c) it is not sourced from a self managed superannuation fund; and\n (d) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a self managed superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) until the commencement of these Principles, was covered by the 2007 Principles; or\n (iii) was covered by these Principles.\n\n> Note: Example\n\n> Note: F and W are trustees of their self managed superannuation fund. They both have lifetime asset‑test exempt income streams that were purchased on 1 July 2003 when F was 65 and W was 64. F dies on 26 January 2023. W subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. W commutes her asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 16 Asset‑test exempt income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21 (2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 17 Asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an asset-test exempt income stream that is a family law affected income stream that does not meet the requirements of subsection 9A(2) or 9B(2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream is derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the income stream is derived from an original family law affected income stream:\n (i) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975; and\n (ii) the income stream was purchased on or after 20 September 2004; and\n (c) the original family law affected income stream from which the income stream is derived as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased before 20 September 2004; and\n (d) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (e) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (f) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) the Secretary is satisfied that there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 18 Commutation of asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (d) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a regulated superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n## Part 3 Partially asset‑test exempt income streams\n\n#### 19 Principles\n\n For subparagraph (b)(ii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the principles are the Principles set out in this Part.\n\n#### 20 Partially asset‑test exempt income stream resulting from original partially asset‑test exempt income stream purchased on or after 20 September 2004 but before 20 September 2007\n\n (1) These Principles cover an income stream if:\n (a) the income stream (the present income stream) is purchased by the primary beneficiary on or after 20 September 2007 from the commutation of a partially asset‑test exempt income stream (the original income stream); and\n (b) the original income stream was purchased on or after 20 September 2004 and before 20 September 2007; and\n (c) the original income stream is a kind of income stream in relation to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (b) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (c) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is not an income stream to which section 22 or 23 of these Principles applies; and\n (b) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (c) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2005, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. The income stream has a 50% exemption from the social security assets test. At the time of the purchase, J and H were members of a couple together. On 1 December 2008, J and H ceased to be members of a couple together. On 15 December 2008, J commutes the original income stream and purchases another income stream (the new income stream) covered by section 9A) of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by subsection 9A(1) or 9B(1A) of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2005, P purchased an income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. The income stream has a 50% exemption from the social security assets test. On 1 September 2022, the Secretary of the Department of Social Services is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) the income stream is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) the income stream:\n (i) is an income stream to which paragraph 9A(1)(b) or 9B(1A)(b) of the Act applies or would have applied if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply, and in relation to which the Secretary is not satisfied as required by that paragraph; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 21 Partially asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an income stream if:\n (a) it results from the transfer, on or after 20 September 2007, of another income stream (the original income stream) to a successor fund; and\n (b) at the time of transfer, the original income stream was:\n (i) covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) provided by a regulated superannuation fund; and\n (c) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 22 Partially asset‑test exempt income stream resulting from payment split\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2005, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. The income stream has a 50% exemption from the social security assets test. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 23 Partially asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act, that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 24 Partially asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 25 Partially asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv was covered by these Principles.\n\n#### 26 Partially asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 27 Partially asset-test exempt market-linked income stream resulting from commutation of another partially asset-test exempt market-linked income stream\n\n These Principles cover an income stream if:\n (a) it is covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA (1) (a) (i) of the Act did not apply; and\n (b) it results from the commutation and rollover of all the assets supporting a partially asset-test exempt income stream (the original income stream); and\n (c) the original income stream was covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA(1)(a)(i) did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 28 Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary; and\n (b) it is not sourced from a self managed superannuation fund; and\n (c) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a self managed superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.\n\n> Note: Example\n\n> Note: G and A are trustees of their self managed superannuation fund. They both have market‑linked asset‑test exempt income streams that were purchased on 1 July 2005 when G was 65 and A was 64. G dies on 26 January 2015. A subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. A commutes her market‑linked asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9BA of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 29 Partially asset‑test income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (b) it results from an asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21(2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 30 Partially asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an income stream that is a family law affected income stream that does not meet the requirements of subsection 9A (2) or 9B (2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of one or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream was derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the original family law affected income stream from which the income stream is derived as a result of the operation of one or more orders under Part VIIIAA, or one or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased after 19 September 2004 and before 20 September 2007; and\n (c) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company, or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (d) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (e) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 31 Commutation of partially asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (c) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a regulated superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.","sortOrder":7},{"sectionNumber":"7","sectionType":"section","heading":"Principles","content":"#### 7 Principles\n\n For subparagraph (a)(iii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the Principles are the Principles set out in this Part.\n\n> Note For the definition of asset‑test exempt income stream, see subsection 9(1) of the Act.","sortOrder":8},{"sectionNumber":"8","sectionType":"section","heading":"Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004","content":"#### 8 Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004\n\n (1) These Principles cover an asset‑test exempt income stream if:\n (a) the income stream (the present income stream) is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004 from funds arising from the commutation of another asset‑test exempt income stream (the original income stream); and\n (c) the original income stream was purchased before 20 September 2004; and\n (d) the original income stream is a kind of income stream to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (c) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (d) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it is not an income stream to which section 10 or 11 of these Principles applies; and\n (c) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (d) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. At the time of the purchase, J and H were members of a couple together. On 1 December 2005, J and H ceased to be members of a couple together. On 15 December 2005, J commutes the original income stream and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by section 9A or 9B of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2002, P purchased a 100% asset-test exempt income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. On 1 September 2022, the Secretary is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) it is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) it:\n (i) is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.","sortOrder":9},{"sectionNumber":"9","sectionType":"section","heading":"Asset‑test exempt income stream resulting from transfer to successor fund","content":"#### 9 Asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it results from the transfer, on or after 20 September 2004, of another income stream (the original income stream) to a successor fund; and\n (c) the original income stream was covered by section 9A or 9B of the Act; and\n (d) the original income stream was provided by a regulated superannuation fund; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.","sortOrder":10},{"sectionNumber":"10","sectionType":"section","heading":"Asset‑test exempt income stream resulting from payment split","content":"#### 10 Asset‑test exempt income stream resulting from payment split\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.","sortOrder":11},{"sectionNumber":"11","sectionType":"section","heading":"Asset‑test exempt income stream resulting from Family Court order or injunction","content":"#### 11 Asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. At the time of the purchase, J and H are partnered. On 1 February 2023, J and H separate. On 15 February 2023, J commutes the original income stream in response to a Family Court order and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.","sortOrder":12},{"sectionNumber":"12","sectionType":"section","heading":"Asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt","content":"#### 12 Asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.","sortOrder":13},{"sectionNumber":"13","sectionType":"section","heading":"Asset-test exempt income stream resulting from payment of excess contributions tax","content":"#### 13 Asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.","sortOrder":14},{"sectionNumber":"14","sectionType":"section","heading":"Asset‑test exempt income stream resulting from payment of hardship amount","content":"#### 14 Asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. On 3 March 2023, J commutes part of the new income stream to pay a hardship amount, and J purchases another income stream (the further income stream) from the remaining capital backing the new income stream. The further income stream is covered by these Principles and retains the 100% exemption from the social security assets test.","sortOrder":15},{"sectionNumber":"15","sectionType":"section","heading":"Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund","content":"#### 15 Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary; and\n (c) it is not sourced from a self managed superannuation fund; and\n (d) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a self managed superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) until the commencement of these Principles, was covered by the 2007 Principles; or\n (iii) was covered by these Principles.\n\n> Note: Example\n\n> Note: F and W are trustees of their self managed superannuation fund. They both have lifetime asset‑test exempt income streams that were purchased on 1 July 2003 when F was 65 and W was 64. F dies on 26 January 2023. W subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. W commutes her asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.","sortOrder":16},{"sectionNumber":"16","sectionType":"section","heading":"Asset‑test exempt income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994","content":"#### 16 Asset‑test exempt income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21 (2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.","sortOrder":17},{"sectionNumber":"17","sectionType":"section","heading":"Asset-test exempt income stream that is family law affected income stream","content":"#### 17 Asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an asset-test exempt income stream that is a family law affected income stream that does not meet the requirements of subsection 9A(2) or 9B(2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream is derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the income stream is derived from an original family law affected income stream:\n (i) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975; and\n (ii) the income stream was purchased on or after 20 September 2004; and\n (c) the original family law affected income stream from which the income stream is derived as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased before 20 September 2004; and\n (d) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (e) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (f) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) the Secretary is satisfied that there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.","sortOrder":18},{"sectionNumber":"18","sectionType":"section","heading":"Commutation of asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund","content":"#### 18 Commutation of asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (d) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a regulated superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":19},{"sectionNumber":"Part 3","sectionType":"part","heading":"Partially asset‑test exempt income streams","content":"## Part 1 Preliminary\n\n#### 1 Name\n\n This instrument is the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) Principles 2022.\n\n#### 2 Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n```html\n

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

  1. The whole of this instrument

On the day after this instrument is registered

30 March 2022

\n```\n\n> Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n#### 3 Authority\n\n This instrument is made under paragraphs (a) and (b) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n (a) asset-test exempt income stream;\n (b) hardship amount;\n (b) income stream.\n In this instrument:\n\n> 2005 Principles means the Social Security (Partially Asset‑test Exempt Income Stream — Exemption) (FaHCSIA) Principles 2005 as made.\n\n> 2007 Principles means the Social Security (Retention of Exemption for Asset-test Exempt Income Streams) (FaCSIA) Principles 2007.\n\n> 2011 Principles means the Social Security (Retention of exemption for asset-test exempt income streams) (DSS) Principles 2011.\n\n> Act means the Social Security Act 1991.\n\n> benefit fund has the meaning given by subsection 16B(1) of the Life Insurance Act 1995.\n\n> defined benefit pension has the meaning given by regulation 9.04E of the Superannuation Industry (Supervision) Regulations 1994.\n\n> immediate annuity means an annuity that is presently payable.\n\n> life company has the meaning given in the Dictionary to the Life Insurance Act 1995.\n\n> regulated superannuation fund has the meaning given by subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.\n\n> self managed superannuation fund has the meaning given by sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.\n\n> statutory fund has the meaning given by section 29 of the Life Insurance Act 1995.\n\n> sub-fund means a sub-fund within a regulated superannuation fund that is taken to be a regulated superannuation fund for the purposes of section 69A of the Superannuation Industry (Supervision) Act 1993.\n\n> successor fund has the meaning given by subregulation 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994.\n\n> third party has the meaning given by section 90AB of the Family Law Act 1975.\n\n#### 5 Schedules\n\n Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n#### 6 Purpose\n\n These Principles specify:\n (a) under Part 2 — the criteria that exclude an asset-test exempt income stream from the class of partially asset‑test exempt income streams established by paragraph (a) of the definition of partially asset-test exempt income stream set out in subsection 1118(1A) of the Act; and\n (b) under Part 3 — the criteria to be satisfied by an income stream covered by paragraph (b) of that definition.\n\n> Note Section 1118 of the Act provides for certain assets to be disregarded in calculating the value of a person’s assets for the purposes of the assets test. Paragraph 1118(1)(d) of the Act provides that the value of an asset‑test exempt income stream, other than a partially asset‑test exempt income stream, is to be disregarded for the purposes of that calculation. Paragraph 1118(1)(da) of the Act provides that only half of the value of a partially asset‑test exempt income stream is to be disregarded for the purposes of the assets test.\n\n## Part 2 Asset‑test exempt income streams\n\n#### 7 Principles\n\n For subparagraph (a)(iii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the Principles are the Principles set out in this Part.\n\n> Note For the definition of asset‑test exempt income stream, see subsection 9(1) of the Act.\n\n#### 8 Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004\n\n (1) These Principles cover an asset‑test exempt income stream if:\n (a) the income stream (the present income stream) is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004 from funds arising from the commutation of another asset‑test exempt income stream (the original income stream); and\n (c) the original income stream was purchased before 20 September 2004; and\n (d) the original income stream is a kind of income stream to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (c) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (d) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and\n (b) it is not an income stream to which section 10 or 11 of these Principles applies; and\n (c) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (d) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. At the time of the purchase, J and H were members of a couple together. On 1 December 2005, J and H ceased to be members of a couple together. On 15 December 2005, J commutes the original income stream and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by section 9A or 9B of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2002, P purchased a 100% asset-test exempt income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. On 1 September 2022, the Secretary is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) it is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) it:\n (i) is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 9 Asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it results from the transfer, on or after 20 September 2004, of another income stream (the original income stream) to a successor fund; and\n (c) the original income stream was covered by section 9A or 9B of the Act; and\n (d) the original income stream was provided by a regulated superannuation fund; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 10 Asset‑test exempt income stream resulting from payment split\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 11 Asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. At the time of the purchase, J and H are partnered. On 1 February 2023, J and H separate. On 15 February 2023, J commutes the original income stream in response to a Family Court order and purchases another income stream (the new income stream) covered by subsection 9A(1) of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 12 Asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 13 Asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 14 Asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2002, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. As it was purchased before 20 September 2004, the income stream has a 100% exemption from the social security assets test. On 3 March 2023, J commutes part of the new income stream to pay a hardship amount, and J purchases another income stream (the further income stream) from the remaining capital backing the new income stream. The further income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 15 Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary; and\n (c) it is not sourced from a self managed superannuation fund; and\n (d) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a self managed superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) until the commencement of these Principles, was covered by the 2007 Principles; or\n (iii) was covered by these Principles.\n\n> Note: Example\n\n> Note: F and W are trustees of their self managed superannuation fund. They both have lifetime asset‑test exempt income streams that were purchased on 1 July 2003 when F was 65 and W was 64. F dies on 26 January 2023. W subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. W commutes her asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9A of the Act. The new income stream is covered by these Principles and retains the 100% exemption from the social security assets test.\n\n#### 16 Asset‑test exempt income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21 (2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (d) the original income stream was covered by section 9A or 9B of the Act; and\n (e) the original income stream:\n (i) was purchased before 20 September 2004; or\n (ii) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (iii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iv) until the commencement of these Principles, was covered by the 2011 Principles; or\n (v) was covered by these Principles.\n\n#### 17 Asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an asset-test exempt income stream that is a family law affected income stream that does not meet the requirements of subsection 9A(2) or 9B(2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream is derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the income stream is derived from an original family law affected income stream:\n (i) as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975; and\n (ii) the income stream was purchased on or after 20 September 2004; and\n (c) the original family law affected income stream from which the income stream is derived as a result of the operation of 1 or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased before 20 September 2004; and\n (d) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (e) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (f) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) the Secretary is satisfied that there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 18 Commutation of asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an asset‑test exempt income stream if:\n (a) it is covered by section 9A or 9B of the Act; and\n (b) it is purchased or acquired on or after 20 September 2004; and\n (c) it results from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (d) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (e) the original income stream was:\n (i) covered by section 9A or 9B of the Act; and\n (ii) sourced from a regulated superannuation fund; and\n (f) the original income stream:\n (i) was covered by the 2005 Principles during the period starting on 20 September 2004 and ending at the end of 19 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n## Part 3 Partially asset‑test exempt income streams\n\n#### 19 Principles\n\n For subparagraph (b)(ii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the principles are the Principles set out in this Part.\n\n#### 20 Partially asset‑test exempt income stream resulting from original partially asset‑test exempt income stream purchased on or after 20 September 2004 but before 20 September 2007\n\n (1) These Principles cover an income stream if:\n (a) the income stream (the present income stream) is purchased by the primary beneficiary on or after 20 September 2007 from the commutation of a partially asset‑test exempt income stream (the original income stream); and\n (b) the original income stream was purchased on or after 20 September 2004 and before 20 September 2007; and\n (c) the original income stream is a kind of income stream in relation to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (b) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (c) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is not an income stream to which section 22 or 23 of these Principles applies; and\n (b) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (c) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2005, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. The income stream has a 50% exemption from the social security assets test. At the time of the purchase, J and H were members of a couple together. On 1 December 2008, J and H ceased to be members of a couple together. On 15 December 2008, J commutes the original income stream and purchases another income stream (the new income stream) covered by section 9A) of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by subsection 9A(1) or 9B(1A) of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2005, P purchased an income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. The income stream has a 50% exemption from the social security assets test. On 1 September 2022, the Secretary of the Department of Social Services is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) the income stream is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) the income stream:\n (i) is an income stream to which paragraph 9A(1)(b) or 9B(1A)(b) of the Act applies or would have applied if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply, and in relation to which the Secretary is not satisfied as required by that paragraph; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n#### 21 Partially asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an income stream if:\n (a) it results from the transfer, on or after 20 September 2007, of another income stream (the original income stream) to a successor fund; and\n (b) at the time of transfer, the original income stream was:\n (i) covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) provided by a regulated superannuation fund; and\n (c) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 22 Partially asset‑test exempt income stream resulting from payment split\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2005, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. The income stream has a 50% exemption from the social security assets test. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 23 Partially asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act, that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 24 Partially asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 25 Partially asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv was covered by these Principles.\n\n#### 26 Partially asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 27 Partially asset-test exempt market-linked income stream resulting from commutation of another partially asset-test exempt market-linked income stream\n\n These Principles cover an income stream if:\n (a) it is covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA (1) (a) (i) of the Act did not apply; and\n (b) it results from the commutation and rollover of all the assets supporting a partially asset-test exempt income stream (the original income stream); and\n (c) the original income stream was covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA(1)(a)(i) did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 28 Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary; and\n (b) it is not sourced from a self managed superannuation fund; and\n (c) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a self managed superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.\n\n> Note: Example\n\n> Note: G and A are trustees of their self managed superannuation fund. They both have market‑linked asset‑test exempt income streams that were purchased on 1 July 2005 when G was 65 and A was 64. G dies on 26 January 2015. A subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. A commutes her market‑linked asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9BA of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n#### 29 Partially asset‑test income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (b) it results from an asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21(2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n#### 30 Partially asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an income stream that is a family law affected income stream that does not meet the requirements of subsection 9A (2) or 9B (2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of one or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream was derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the original family law affected income stream from which the income stream is derived as a result of the operation of one or more orders under Part VIIIAA, or one or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased after 19 September 2004 and before 20 September 2007; and\n (c) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company, or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (d) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (e) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.\n\n#### 31 Commutation of partially asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (c) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a regulated superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.","sortOrder":20},{"sectionNumber":"19","sectionType":"section","heading":"Principles","content":"#### 19 Principles\n\n For subparagraph (b)(ii) of the definition of partially asset‑test exempt income stream in subsection 1118(1A) of the Act, the principles are the Principles set out in this Part.","sortOrder":21},{"sectionNumber":"20","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from original partially asset‑test exempt income stream purchased on or after 20 September 2004 but before 20 September 2007","content":"#### 20 Partially asset‑test exempt income stream resulting from original partially asset‑test exempt income stream purchased on or after 20 September 2004 but before 20 September 2007\n\n (1) These Principles cover an income stream if:\n (a) the income stream (the present income stream) is purchased by the primary beneficiary on or after 20 September 2007 from the commutation of a partially asset‑test exempt income stream (the original income stream); and\n (b) the original income stream was purchased on or after 20 September 2004 and before 20 September 2007; and\n (c) the original income stream is a kind of income stream in relation to which one of the following subsections applies.\n (2) This subsection applies to an original income stream if:\n (a) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and\n (b) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and\n (c) the reversionary beneficiary predeceases the primary beneficiary.\n (3) This subsection applies to an original income stream if:\n (a) it is not an income stream to which section 22 or 23 of these Principles applies; and\n (b) it is purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary who, at the time of the purchase, are members of a couple together; and\n (c) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.\n\n> Note: Example\n\n> Note: On 1 March 2005, J purchased an income stream (the original income stream) covered by subsection 9A(1) of the Act for the benefit of J, the primary beneficiary, and H, the reversionary beneficiary. The income stream has a 50% exemption from the social security assets test. At the time of the purchase, J and H were members of a couple together. On 1 December 2008, J and H ceased to be members of a couple together. On 15 December 2008, J commutes the original income stream and purchases another income stream (the new income stream) covered by section 9A) of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n (4) This subsection applies to an original income stream if:\n (a) it is a defined benefit pension covered by subsection 9A(1) or 9B(1A) of the Act that is provided by a regulated superannuation fund; and\n (b) it is an income stream in relation to which the Secretary is not satisfied as required by paragraph 9A(1)(b) or 9B(1A)(b) of the Act, as applicable.\n\n> Note: Example\n\n> Note: On 1 March 2005, P purchased an income stream (the original income stream) that is a defined benefit pension covered by section 9A of the Act that is provided by a regulated superannuation fund. Paragraph 9A(1)(b) of the Act applies to the original income stream. The income stream has a 50% exemption from the social security assets test. On 1 September 2022, the Secretary of the Department of Social Services is not satisfied that the requirements of paragraph 9A(1)(b) of the Act are met in relation to the original income stream. On 15 September 2022, P commutes the original income stream to purchase another income stream (the new income stream) that is covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.\n\n (5) This subsection applies to an original income stream if:\n (a) the income stream is an immediate annuity under a statutory fund established by a life company, or under a benefit fund; and\n (b) the income stream:\n (i) is an income stream to which paragraph 9A(1)(b) or 9B(1A)(b) of the Act applies or would have applied if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply, and in relation to which the Secretary is not satisfied as required by that paragraph; or\n (ii) fails to satisfy relevant standards published by the Australian Prudential Regulation Authority about minimum surrender values and paid up values.\n\n> Note Paragraphs 9A(1)(b) and 9B(1A)(b) of the Act require the Secretary to be satisfied, in relation to an income stream, that there is in force a current actuarial certificate stating that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the income stream’s contract or governing rules.","sortOrder":22},{"sectionNumber":"21","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from transfer to successor fund","content":"#### 21 Partially asset‑test exempt income stream resulting from transfer to successor fund\n\n These Principles cover an income stream if:\n (a) it results from the transfer, on or after 20 September 2007, of another income stream (the original income stream) to a successor fund; and\n (b) at the time of transfer, the original income stream was:\n (i) covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) provided by a regulated superannuation fund; and\n (c) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":23},{"sectionNumber":"22","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from payment split","content":"#### 22 Partially asset‑test exempt income stream resulting from payment split\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to an entitlement of the partner or former partner of the primary beneficiary in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.\n\n> Note: Example\n\n> Note: On 1 March 2005, P, who was partnered to J at that date, purchased an income stream (the original income stream) covered by section 9A of the Act. The income stream has a 50% exemption from the social security assets test. On 1 February 2023, P and J separate. P’s original income stream is commuted to give effect to an entitlement of J in respect of the original income stream under a payment split under Part VIIIB or Part VIIIC of the Family Law Act 1975. On 15 February 2023, J uses the entitlement resulting from the payment split to purchase an income stream (the new income stream) covered by section 9A of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.","sortOrder":24},{"sectionNumber":"23","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from Family Court order or injunction","content":"#### 23 Partially asset‑test exempt income stream resulting from Family Court order or injunction\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired by the primary beneficiary or the primary beneficiary’s partner or former partner on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to give effect to:\n (i) an order made under section 79, 90SM, 90SS or 114 of the Family Law Act 1975; or\n (ii) an injunction granted under section 90SS or 114 of that Act, that is binding on a third party under Part VIIIAA of that Act; or\n (iii) any other order or injunction under the Family Law Act 1975 that relates specifically to the original income stream; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":25},{"sectionNumber":"24","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt","content":"#### 24 Partially asset‑test exempt income stream resulting from payment of superannuation contributions surcharge debt\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a superannuation contributions surcharge debt; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":26},{"sectionNumber":"25","sectionType":"section","heading":"Partially asset-test exempt income stream resulting from payment of excess contributions tax","content":"#### 25 Partially asset-test exempt income stream resulting from payment of excess contributions tax\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset-test exempt income stream (the original income stream) being commuted to pay an amount to give effect to a release authority, given in relation to the primary beneficiary, under:\n (i) former section 292-415 of the Income Tax Assessment Act 1997; or\n (ii) section 292-80C of the Income Tax (Transitional Provisions) Act 1997; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv was covered by these Principles.","sortOrder":27},{"sectionNumber":"26","sectionType":"section","heading":"Partially asset‑test exempt income stream resulting from payment of hardship amount","content":"#### 26 Partially asset‑test exempt income stream resulting from payment of hardship amount\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":28},{"sectionNumber":"27","sectionType":"section","heading":"Partially asset-test exempt market-linked income stream resulting from commutation of another partially asset-test exempt market-linked income stream","content":"#### 27 Partially asset-test exempt market-linked income stream resulting from commutation of another partially asset-test exempt market-linked income stream\n\n These Principles cover an income stream if:\n (a) it is covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA (1) (a) (i) of the Act did not apply; and\n (b) it results from the commutation and rollover of all the assets supporting a partially asset-test exempt income stream (the original income stream); and\n (c) the original income stream was covered by section 9BA of the Act or would have been covered by that section if subparagraph 9BA(1)(a)(i) did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":29},{"sectionNumber":"28","sectionType":"section","heading":"Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund","content":"#### 28 Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary; and\n (b) it is not sourced from a self managed superannuation fund; and\n (c) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund because:\n (i) a member of the fund supporting the original income stream has died; or\n (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a self managed superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.\n\n> Note: Example\n\n> Note: G and A are trustees of their self managed superannuation fund. They both have market‑linked asset‑test exempt income streams that were purchased on 1 July 2005 when G was 65 and A was 64. G dies on 26 January 2015. A subsequently decides that she does not have the expertise or inclination to continue as a fund trustee. A commutes her market‑linked asset‑test exempt income stream and uses the proceeds to purchase from a retail income stream provider, an income stream that meets the provisions of section 9BA of the Act. The new income stream is covered by these Principles and retains the 50% exemption from the social security assets test.","sortOrder":30},{"sectionNumber":"29","sectionType":"section","heading":"Partially asset‑test income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994","content":"#### 29 Partially asset‑test income stream resulting from commutation or rollover because of regulation 6.21 of Superannuation Industry (Supervision) Regulations 1994\n\n These Principles cover an income stream if:\n (a) it is purchased by the primary beneficiary on or after 1 July 2007; and\n (b) it results from an asset‑test exempt income stream (the original income stream) being commuted or rolled over to comply with subregulation 6.21(2A) of the Superannuation Industry (Supervision) Regulations 1994; and\n (c) the original income stream was covered by section 9A, 9B or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (d) the original income stream:\n (i) was purchased on or after 20 September 2004 and before 20 September 2007; or\n (ii) was covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or\n (iii) until the commencement of these Principles, was covered by the 2011 Principles; or\n (iv) was covered by these Principles.","sortOrder":31},{"sectionNumber":"30","sectionType":"section","heading":"Partially asset-test exempt income stream that is family law affected income stream","content":"#### 30 Partially asset-test exempt income stream that is family law affected income stream\n\n (1) These Principles cover an income stream that is a family law affected income stream that does not meet the requirements of subsection 9A (2) or 9B (2) of the Act if:\n (a) either:\n (i) the income stream meets all the requirements of paragraphs 9A(2)(a) to (l) or 9B(2)(a) to (l) of the Act other than those that are not met because of the operation of an order under Part VIIIAA, or a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the income stream; or\n (ii) as a result of the operation of one or more orders under Part VIIIAA, or 1 or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, the income stream was derived from an income stream that was an asset-test exempt income stream to which subsection 9A(1A) or 9B(1B) of the Act applied at the time of the order or payment split, or of the last of them; and\n (b) the original family law affected income stream from which the income stream is derived as a result of the operation of one or more orders under Part VIIIAA, or one or more payment splits under Part VIIIB or Part VIIIC, of the Family Law Act 1975, was purchased after 19 September 2004 and before 20 September 2007; and\n (c) either:\n (i) for an income stream that is an immediate annuity under a statutory fund established by a life company, or under a benefit fund — the income stream satisfies standards published by the Australian Prudential Regulation Authority, about minimum surrender values and paid up values, that apply to the annuity; or\n (ii) in any other case — the income stream meets the requirements of subsection (2); and\n (d) any amount of the original family law affected income stream that is rolled over, transferred, commuted or paid as a lump sum is not more than the amount required to satisfy the non-member partner’s entitlement under an order under Part VIIIAA, or under a payment split under Part VIIIB or Part VIIIC, of the Family Law Act 1975 relating to the original family law affected income stream; and\n (e) for an income stream to which subparagraph (a)(i) applies — the income stream has met all the requirements mentioned in that subparagraph from the day the income stream began being paid.\n (2) An income stream meets the requirements of this subsection if:\n (a) there is in force a current actuarial certificate that states that in the actuary’s opinion there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules under which the income stream is provided; or\n (b) for a period beginning when an actuarial certificate mentioned in paragraph (a) ceases to be in force and ending not more than 26 weeks later, an actuarial certificate of that kind is not in force.","sortOrder":32},{"sectionNumber":"31","sectionType":"section","heading":"Commutation of partially asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund","content":"#### 31 Commutation of partially asset‑test exempt income stream resulting from the closure of a regulated superannuation fund or sub fund\n\n These Principles cover an income stream if:\n (a) it is purchased or acquired on or after 20 September 2007; and\n (b) it results from a partially asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a regulated superannuation fund or sub-fund; and\n (c) it does not result from another asset‑test exempt income stream (the original income stream) being commuted as a result of the closure of a self managed superannuation fund; and\n (d) the original income stream was:\n (i) covered by section 9A, 9B, or 9BA of the Act or would have been covered by those sections if paragraph 9A(1)(aa), subparagraph 9B(1)(a)(i) or subparagraph 9BA(1)(a)(i) of the Act did not apply; and\n (ii) sourced from a regulated superannuation fund; and\n (iii) covered by the 2007 Principles, 2011 Principles or these Principles.","sortOrder":33}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":false,"description":"This instrument consolidates and restates the retention rules that previously appeared in earlier instruments (2005, 2007, 2011 Principles) and continues the existing approach of preserving exemption status in specified transactional circumstances. It does not materially expand the categories of income streams covered; rather it restates and updates the administrative criteria (including explicitly referencing 9BA market‑linked streams and current prudential checks). The core scope—preserving asset‑test exemptions for defined classes of commutations, rollovers, family law outcomes, and fund closures—remains consistent with the instrument series it replaces."},"complexity_factors":["Large number of conditional branches (many separate scenarios in Parts 2 & 3 for when exemption is retained)","Multiple date cut‑offs and historical bands (notably 20 Sep 2004; 20 Sep 2007; 1 Jul 2007; periods ending 19 Sep 2007 and 28 Nov 2011)","Extensive cross‑references to the Social Security Act (sections 9A, 9B, 9BA, 1118(1A)), Family Law Act (multiple Parts and sections), SIS Regulations (reg 6.21) and APRA standards","Dependence on externally issued documents and assessments (actuarial certificates, APRA compliance statements) where the Secretary must be \"satisfied\"","Repeating but slightly different formulations across many clauses (high duplication with small variations increases cognitive load)","Numerous defined terms (references to 2005/2007/2011 Principles, regulated superannuation fund, statutory fund, life company, successor fund, reversionary beneficiary, primary beneficiary, family law affected income stream, market‑linked streams etc.)","Nested exceptions (for example: family law affected streams that fail subsection 9A(2) or 9B(2) but meet alternative criteria)","Interlocking administrative timelines (e.g., temporary 26‑week gap allowed for actuarial certificates) which add conditional time windows"],"plain_english_summary":"**What this instrument does (mechanically)\n\n- This is a set of administrative principles that tell the Social Security Act how to treat certain superannuation and annuity income streams for the purposes of the social security assets test. Concretely, it lists the situations in which an income stream that is purchased, commuted, rolled over or transferred will keep its existing \"asset-test exemption\" status (either fully exempt or partially exempt) rather than becoming a non-exempt asset.\n\n- The instrument does not change the asset-test exemptions in the Act itself. Instead it specifies the detailed circumstances (and the documentary and timing conditions) in which an income stream continues to be treated as the same exempt class after actions such as commutation, transfer to a successor fund, payment splits under family law, payment of tax/surcharge, hardship withdrawals, fund closures, rollovers required by prudential rules, and similar events (see Parts 2 and 3).\n\nWho this affects\n\n- People with income streams (pensions, annuities) that are or were \"asset-test exempt\" or \"partially asset-test exempt\" under the Social Security Act, and who subsequently commute, transfer, split, roll over or re‑purchase those income streams.\n- Regulated superannuation funds, self-managed super funds, life companies and other income-stream providers that issue or accept rollovers/commutations and that may need to supply actuarial certificates or meet APRA standards.\n- The Department (the Secretary) when exercising statutory satisfactions (for example, about actuarial certificates or provider solvency).\n\nWhy it matters (policy purpose and operational consequence)\n\n- The stated purpose (set out in the instrument) is to preserve the assets-test exemption status of income streams in a range of specified transfer/commutation/rollover circumstances so that a taxable event or administrative action does not automatically remove the exemption that applied to the original income stream (see Purpose). In other words: if a person commutes an exempt income stream and uses the proceeds in narrowly defined ways, the new stream can keep the same asset-test treatment.\n\n- Operationally, the instrument therefore determines whether a person’s assets are counted or disregarded when Centrelink applies the assets test to means‑tested payments. That affects a person’s eligibility and payment rate for age pension and other social security payments.\n\nHow it works (key mechanisms and decision points)\n\n- Date cut-offs and classes: many clauses hinge on when the original income stream was purchased (notably before 20 Sep 2004, between 20 Sep 2004 and 20 Sep 2007, or purchases/transactions after those dates). The exemption status preserved (100% exempt vs 50% partially exempt) follows the original category of the income stream. See Part 2 (asset-test exempt streams) and Part 3 (partially asset‑test exempt streams).\n\n- Specified events covered: commutation and re‑purchase; transfer to a successor fund; payment splits under family law; Family Court orders/injunctions; payments to satisfy superannuation surcharge or excess contributions tax; hardship withdrawals; closure of SMSFs or regulated funds; rollovers required by SIS regulation 6.21; and market‑linked product rollovers. Each event has conditions that must be met for the exemption to be retained (see individual clauses 8–18 and 20–31).\n\n- Prudential and evidentiary conditions: retention often depends on provider solvency evidence — the Secretary must be satisfied that there is a current actuarial certificate stating a high probability the provider can meet payments, or (in limited circumstances) a temporary gap of up to 26 weeks is permitted. For certain annuities APRA standards (minimum surrender/paid‑up values) also matter. These are recurring administrative gates (see relevant subsections and notes).\n\nWho pays, who decides, and what behaviour changes\n\n- Who pays: the fiscal impact (if any) of preserving exemptions is borne by the social security system — exemptions reduce the asset base counted against claimants and can reduce required pension payments. Individuals who keep exemptions benefit in eligibility/entitlement terms; the cost is absorbed in program budgets.\n\n- Who decides: the Secretary (Department) has evaluative discretion in some cases (for example, satisfaction about actuarial certificates and compliance with APRA standards). Super funds and life companies provide the underlying products and evidence (actuarial certificates, product terms) that the Department uses to make its decisions.\n\n- Behaviour changes and incentives: the instrument preserves an incumbent exemption status across administrative transactions, which reduces the incentive for individuals to avoid commutation/rollover because of asset-test consequences. It also creates an incentive for product providers to maintain the documentation and prudential compliance (actuarial certificates, APRA standards) required to preserve exemption status for their customers.\n\nCosts, trade-offs and implementation points to note\n\n- Concentrated benefits, diffuse costs: benefits flow primarily to holders of legacy exempt or partially exempt income streams (a concentrated group). The fiscal effect is spread across the social security program (diffuse) rather than charged back to providers or affected individuals as a policy rule. (See Purpose and the repeated date‑based clauses.)\n\n- Administrative burden: the Department must verify purchase dates, the provenance of funds (commutation/rollover source), compliance with family‑law orders/payment splits, APRA standard compliance, and the currency and content of actuarial certificates. Providers must supply actuarial certificates and meet solvency/valuation standards for their products. This creates record‑keeping and evidentiary compliance costs for both public administration and private providers.\n\n- Discretion and timing risk: the Secretary’s requirement to be \"satisfied\" about actuarial certificates introduces an administrative discretion point; temporary gaps are allowed in some circumstances (up to 26 weeks), but longer gaps or failure to meet APRA standards can break the continuity and cause loss of exemption.\n\n- Cross‑system coordination: the instrument relies on interaction with family law (orders, payment splits), taxation regimes (release authorities, surcharge payments), and prudential regulation (APRA standards, SIS regs). That increases the chance of implementation friction where documents or timings differ across systems.\n\n- Product design and potential strategic responses: because retention depends on the nature and date of the original stream and on provider certifications, product providers may structure offerings or documentation to ensure customers can retain exemptions on future commutations/transfers; conversely, changes in prudential standards or actuarial practice could alter retention outcomes.\n\nHow this relates to the Act\n\n- These are principles made under the Social Security Act 1991 (subsection 1118(1A)) that specify which streams should be excluded from becoming partially asset‑test exempt when the Act’s technical definition operates; the instrument references and operationalises sections 9A, 9B and 9BA of the Act and other external rules (Family Law Act, SIS regs, APRA standards).\n\nSummary in one line\n\n- The instrument preserves the asset‑test exemption status of certain superannuation/annuity income streams after commutation/transfer/rollover/payment events — subject to specific timing, evidentiary and prudential conditions — and sets the administrative rules the Department uses to recognise that retention."},"kimi_summary":{"_metrics":{"completionTokens":725},"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"The legislation maintains its original purpose of preserving assets test exemptions for legacy income streams during permitted changes. The 2022 version consolidates and replaces earlier Principles (2005, 2007, 2011) without expanding scope — it continues the same policy framework with updated drafting and continued coverage of the same categories of exempt and partially exempt income streams."},"complexity_factors":["Multiple overlapping date thresholds (20 September 2004, 20 September 2007, 28 November 2011, 1 July 2007)","Extensive cross-referencing to predecessor instruments (2005, 2007, 2011 Principles)","Nested conditional logic with multiple sub-paragraphs and sub-sub-paragraphs","Heavy reliance on definitions from other Acts (Social Security Act 1991, Family Law Act 1975, Superannuation Industry (Supervision) Act 1993, Income Tax Assessment Act 1997)","Duplicated structure across Part 2 (100% exempt) and Part 3 (50% exempt) with subtle date differences","Family law affected income streams with complex tracing requirements","Actuarial certificate requirements and 26-week grace periods","Multiple defined terms referencing external legislation"],"plain_english_summary":"These Principles preserve the special assets-test exemption for certain legacy retirement income streams (fully exempt pre‑20 Sep 2004; 50% exempt 20 Sep 2004–19 Sep 2007) even after they are changed, commuted, transferred, or restructured. \n\nThey affect retirees (and their partners or former partners) with those legacy products and prevent necessary events—like relationship breakdowns, death, fund closure, court orders or tax-related commutations—from unexpectedly causing loss of pension entitlement or reduced payments."}},"importantCases":[],"_links":{"self":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022","history":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022/history","analysis":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022/analysis","conflicts":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022/conflicts","importantCases":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022/important-cases","documents":"/api/acts/social-security-retention-of-exemption-for-asset-test-exempt-income-streams-principles-2022/documents"}}