15Guidelines for asset‑test exempt income stream resulting from payment of hardship amount

15 Guidelines for asset‑test exempt income stream resulting from payment of hardship amount

The Secretary may determine that an income stream is an asset‑test exempt income stream for the purposes of the Act if: (a) it is covered by section 9A or 9B of the Act or would have been covered by those sections if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply; and (b) it is purchased by the primary beneficiary on or after 20 September 2007; and (c) it results from another asset‑test exempt income stream (the original income stream) being commuted to pay a hardship amount; and (d) the original income stream was covered by section 9A or 9B of the Act or would have been covered by those sections if paragraph 9A(1)(aa) or subparagraph 9B(1)(a)(i) of the Act did not apply; and (e) the original income stream: (i) was purchased before 20 September 2004; or (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 (iii) was, until the commencement of this Determination, covered by the 2007 Determination; or (iv) is covered by this Determination.

Note: Example

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 2012, 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 this Determination and retains the 100% exemption from the social security assets test.