14Asset‑test exempt income stream resulting from payment of hardship amount

14 Asset‑test exempt income stream resulting from payment of hardship amount

These Principles cover an asset‑test exempt income stream if: (a) it is covered by section 9A or 9B of the Act; and (b) it is purchased by the primary beneficiary on or after 20 September 2004; 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; 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 covered by the 2007 Principles during the period starting on 20 September 2007 and ending at the end of 28 November 2011; or (iv) until the commencement of these Principles, was covered by the 2011 Principles; or (iv) was covered by these Principles.

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 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.