8Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004

8 Asset‑test exempt income stream resulting from original asset‑test exempt income stream purchased before 20 September 2004

(1) These Principles cover an asset‑test exempt income stream if: (a) the income stream (the present income stream) 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 from funds arising from the commutation of another asset‑test exempt income stream (the original income stream); and (c) the original income stream was purchased before 20 September 2004; and (d) the original income stream is a kind of income stream to which one of the following subsections applies. (2) This subsection applies to an original income stream if: (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and (b) it was purchased by the primary beneficiary for the benefit of the primary beneficiary and a reversionary beneficiary; and (c) payments made under the income stream are calculated on the basis of the life expectancy of the reversionary beneficiary; and (d) the reversionary beneficiary predeceases the primary beneficiary. (3) This subsection applies to an original income stream if: (a) it is covered by subsection 9A(1) or (1A) or section 9B of the Act; and (b) it is not an income stream to which section 10 or 11 of these Principles applies; and (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 (d) the primary beneficiary and reversionary beneficiary are no longer members of a couple together.

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. 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.

(4) This subsection applies to an original income stream if: (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 (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.

Note: Example

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.