15Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund

15 Commutation of asset‑test exempt income stream resulting from closure of a self managed superannuation fund

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; and (c) it is not sourced from a self managed superannuation fund; and (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: (i) a member of the fund supporting the original income stream has died; or (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 (e) the original income stream was: (i) covered by section 9A or 9B of the Act; and (ii) sourced from a self managed superannuation fund; and (f) the original income stream: (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 (ii) until the commencement of these Principles, was covered by the 2007 Principles; or (iii) was covered by these Principles.

Note: Example

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.