(g) the market linked annuity can be transferred only:
(i) on the death of the primary beneficiary:
(A) to 1 of the dependants of the primary beneficiary; or
(B) to the legal personal representative of the primary beneficiary; or
(ii) on the death of the reversionary beneficiary:
(A) to 1 of the dependants of the reversionary beneficiary; or
(B) to the legal personal representative of the reversionary beneficiary; and
(h) the capital value of the market linked annuity, and the income from it, cannot be used as security for a borrowing.
(11) A contract mentioned in subregulation (10) is not prevented from meeting the standards of that subregulation by reason only that the contract provides that, if the commencement day of the annuity is on or after 1 June in a financial year, no payment is required to be made for that financial year.
(11A) A contract for the provision of a benefit (the annuity) meets the standards of this subregulation if the contract ensures that payment of the annuity is made at least annually, and also ensures that:
(a) for an annuity in relation to which there is an account balance attributable to the annuitant—the total of payments in any year (excluding payments by way of commutation but including payments under a payment split) is at least the amount calculated under clause 1 of Schedule 7; and
(b) for an annuity that is not described in paragraph (a):
(i) both of the following apply:
(A) the contract does not provide for a residual capital value, commutation value or withdrawal benefit greater than 100% of the purchase price of the annuity;
(B) the total of payments in any year (excluding payments by way of commutation but including payments under a payment split) is at least the amount calculated under clause 2 of Schedule 7; or
(ii) each of the following applies:
(A) the annuity is payable throughout the life of the beneficiary (primary or reversionary), or for a fixed term of years that is no greater than the difference between the primary beneficiary’s age on the commencement day and age 100;
(B) the amount paid as the purchase price is wholly converted into annuity payments;
(C) there is no arrangement for an amount (or a percentage of the purchase price) prescribed by the contract to be returned to the recipient when the annuity ends;
(D) the total of payments from the annuity in the first year (excluding payments by way of commutation but including payments under a payment split) is at least the amount calculated under clause 2 of Schedule 7;
(E) the total of payments from the annuity in a subsequent year cannot vary from the total of payments in the previous year unless the variation is as a result of an indexation arrangement or the transfer of the annuity to another person;
(F) if the annuity is commuted, the commutation amount cannot exceed the benefit that was payable immediately before the commutation; or
(iii) the standards of subregulation (2) are met; and
(c) the annuity is transferable to another person only on the death of the beneficiary (primary or reversionary, as the case may be); and
(d) the capital value of the annuity and the income from it cannot be used as a security for a borrowing.
(11B) A contract for the provision of a benefit does not meet the standards of any of subregulations (2) to (11A) if, in relation to the death of the annuity recipient on or after 1 July 2007, the annuity is transferred or paid to a person who would not be eligible to be paid a benefit in the form of an annuity under paragraph 6.21(2)(b) or subregulation 6.21(2A) or (2B).
(12) Despite section 7 of the Income Tax Assessment (1936 Act) Regulations 2025, for an annuity that has a commencement day on or after 20 September 2004 and on or before 31 December 2004, one of the following life tables are to be used in ascertaining the life expectancy of a person under this regulation:
(a) the most recently published Australian Life Tables;
(b) the 1995‑97 Australian Life Tables.
(13) In this regulation:
indexation arrangement, in relation to an annuity, means an arrangement specified in the contract for the provision of the annuity that:
(a) results in the total amount of annuity payments in each year:
(i) increasing by the same percentage factor; or
(ii) being adjusted in line with movements in the Consumer Price Index; or
(iii) being adjusted in line with movements in an index of average weekly earnings published by the Australian Statistician; or
(iv) being adjusted in accordance with subparagraph (ii) or (iii) but with an increase capped at a maximum level; and
(b) ensures that, unless APRA otherwise approves, an adjustment is made at least annually to the amount of the annuity payments.
1.05AA Limited period for full commutation of certain annuities
(1) For the purposes of subparagraphs 1.05(2)(f)(iiia), (9)(h)(via) and (10)(d)(iva), this subregulation applies to a commutation of a benefit if:
(a) the commutation occurs during the 5 years beginning on the day this regulation commences; and
(b) the whole of the benefit is commuted.
(2) For the purposes of subparagraph 1.05(2)(f)(iiia), this subregulation applies to a commutation of a benefit if the superannuation fund that purchases the benefit or provides the consideration for the benefit:
(a) is not a defined benefit fund; or
(b) is a self managed superannuation fund; or
(c) was, when the benefit commenced to be paid and at all earlier times, a small APRA fund (within the meaning of the Corporations Act 2001).
1.06 Meaning of pension (Act, s 10)
(1) A benefit is taken to be a pension for the purposes of the Act if:
(a) it is provided under rules of a superannuation fund that:
(i) meet the standards of subregulation (9A) or 1.06A(2); and
(ii) do not permit the capital supporting the pension to be added to by way of contribution or rollover after the pension has commenced; and
(b) in the case of rules to which paragraph (9A)(a) applies and that meet the standards of subregulation (9A)—the rules also meet the standards of regulation 1.07D; and
(c) in the case of rules to which paragraph (9A)(b) applies and that meet the standards of subregulation (9A)—the rules also meet the standards of regulation 1.07B.
(1A) A benefit that commenced to be paid before 20 September 2007 is taken to be a pension for the purposes of the Act if:
(a) it is provided under rules of a superannuation fund that meet the standards of subregulation (2), (4), (6), (7) or (8); and
(b) where the primary beneficiary became entitled to the benefit on or after 20 September 1998 under rules of a superannuation fund that meet the standards of subregulation (7)—those rules provide that the commencement day is the day when the primary beneficiary became entitled to the pension; and
(c) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (4)—the rules also meet the standards of regulation 1.07A; and
(d) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (2), (6) or (7)—the rules also meet the standards of regulation 1.07B; and
(e) for a benefit that is provided under rules of a superannuation fund that meet the standards of subregulation (8), and has a commencement day on or after 20 September 2004—the rules also meet the standards of regulation 1.07C.
(1B) A benefit that commenced to be paid on or after 20 September 2007 is taken to be a pension for the purposes of the Act if:
(a) the benefit arises under rules of a superannuation fund that meet the standards of:
(i) subregulation 1.06(7) or (8); and
(ii) subregulation 1.06(9A); and
(b) the benefit was purchased with a rollover superannuation benefit that resulted from the commutation of:
(i) an annuity provided under a contract that meets the standards of subregulation 1.05(2), (9) or (10); or
(ii) a pension provided under rules that meet the standards of subregulation 1.06(2), (7) or (8); or
(iii) a pension provided under terms and conditions that meet the standards of subregulation 1.07(3A) of the RSA Regulations; and
(c) for a benefit that arises under rules that meet the standards of subregulation (7)—the rules also meet the standards of regulation 1.07B; and
(d) for a benefit that arises under rules that meet the standards of subregulation (8)—the rules also meet the standards of regulation 1.07C.
(2) Rules meet the standards of this subregulation if they ensure that:
(a) the pension is paid at least annually throughout the life of the primary beneficiary in accordance with paragraphs (b) and (c) and, if there is a reversionary beneficiary:
(i) throughout the reversionary beneficiary’s life; or
(ii) if he or she is a child of the primary beneficiary or of a former reversionary beneficiary under the pension—at least until his or her 16th birthday; or
(iii) if the person referred to in subparagraph (ii) is a full‑time student at age 16—at least until the end of his or her full‑time studies or until his or her 25th birthday (whichever occurs sooner); and
(b) the size of payments of benefit in a year is fixed, allowing for variation only:
(i) as specified in the governing rules; or
(ii) to allow commutation to pay a superannuation contributions surcharge; or
(iii) to allow an amount to be paid under a payment split and reasonable fees in respect of the payment split to be charged; and
(c) unless the Regulator otherwise approves, the sum payable as benefit in each year to the primary beneficiary or to the reversionary beneficiary, as the case may be, is:
(i) if CPIc is not less than CPIp—not less than SPp; or
(ii) if CPIc is less than CPIp—not less than:
Start formula start fraction CPI start subscript c end subscript over CPI start subscript p end subscript end fraction times SP start subscript p end subscript end formula
where:
CPIc means the quarterly CPI first published by the Australian Statistician for the second‑last quarter before the day on which payment is to be made.
CPIp means the quarterly CPI first published by the Australian Statistician for the same quarter in the immediately preceding year.
SPp means the sum payable in the immediately preceding year;
and
(d) the pension does not have a residual capital value; and
(e) the pension cannot be commuted except in any of the following circumstances:
(i) the pension is not funded from the commutation of:
(A) an annuity that meets the standards of subregulation 1.05(2), (3), (9) or (10); or
(B) a pension that meets the standards of this subregulation or subregulation (3), (7) or (8); or
(C) a pension that meets the standards of subregulation 1.07(3A) of the RSA Regulations;
and the commutation is made within 6 months after the commencement day of the pension;
(ii) the commutation is made to the benefit of a reversionary beneficiary on the death of the primary beneficiary and within one of the following periods after the commencement day of the pension:
(A) if the primary beneficiary’s life expectancy on the commencement day, rounded up to the next whole number, is a period less than 20 years—that period;
(B) in any other case—20 years;
(iii) the superannuation lump sum resulting from the commutation is transferred directly for the purpose of purchasing another benefit provided under:
(A) rules that meet the standards of this subregulation or subregulation (3), (7) or (8); or
(B) a contract that meets the standards of subregulation 1.05(2), (3), (9) or (10); or
(C) terms and conditions that meet the standards of subregulation 1.07(3A) of the RSA Regulations;
(iiia) subregulations 1.06C(1) and (2) apply to the commutation;
(iv) to pay a superannuation contributions surcharge;
(v) to give effect to an entitlement of a non‑member spouse under a payment split;
(vi) for the purpose of paying an amount under Division 131 or 135 in Schedule 1 to the Taxation Administration Act 1953, or section 292‑80C of the Income Tax (Transitional Provisions) Act 1997, to give effect to a release authority in respect of the primary beneficiary;
(vii) the pension was commenced in contravention of Part 6 and the commutation would result in an obligation to pay an amount to the Commissioner of Taxation under subsection 20F(1) of the Superannuation (Unclaimed Money and Lost Members) Act 1999; and
(f) if the pension reverts or is commuted, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion or the commutation; and
(g) the pension is not able to be transferred to a person other than a reversionary beneficiary on the death of the primary beneficiary or of another reversionary beneficiary; and
(h) the capital value of the pension and the income from it, cannot be used as security for a borrowing.
(3) For the purpose of determining whether rules meet the standards in subregulation (2), it is immaterial that:
(a) if the primary beneficiary dies within the period used for subparagraph (2)(e)(ii), a surviving reversionary beneficiary may obtain a payment equal to the total payments that the primary beneficiary would have received, if the primary beneficiary had not died, from the day of the death until the end of the period; and
(b) if the primary beneficiary dies within the period used for subparagraph (2)(e)(ii) and there is no surviving reversionary beneficiary, an amount, not exceeding the difference between the sum of the amounts paid to the primary beneficiary and the sum of the amounts that would have been so payable in the period, is payable to the primary beneficiary’s estate; and
(c) if the primary beneficiary dies within the period used for subparagraph (2)(e)(ii) and there is a surviving reversionary beneficiary who also dies within that period, there is payable to the reversionary beneficiary’s estate an amount determined as described in paragraph (b) as if that paragraph applied to the reversionary beneficiary.
(4) Rules:
(a) that do not meet the standards in subregulation (2); and
(b) that do not fix the size of payments of benefit in a year; and
meet the standards of this subregulation if they at least ensure that:
(c) the standards in paragraphs (2)(g) and (h) are met; and
(d) payments are made at least annually; and
(e) for a pension that has a commencement day on or after 22 December 1992 and before 1 January 2006—the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than, respectively, the maximum and minimum limits calculated in accordance with Schedule 1A; and
(f) for a pension that has a commencement day on or after 1 January 2006—the payments in a year (excluding payments by way of commutation but including payments made under a payment split) are not larger or smaller in total than the following:
(i) for payments made during the period starting on 1 January 2006 and ending on 30 June 2006—the respective maximum and minimum limits for the year calculated in accordance with 1 of the following Schedules:
(A) Schedule 1A;
(B) Schedule 1AAB;
(ii) for payments made on or after 1 July 2006—the respective maximum and minimum limits for the year calculated in accordance with Schedule 1AAB.
Note: 22 December 1992 was the date of Royal Assent to the Taxation Laws Amendment (Superannuation) Act 1992.
(5) For the purpose of determining whether rules meet the standards in subregulation (4), it is immaterial:
(a) that:
(i) the commencement day of the pension occurs on or after 1 June in a financial year; and
(ii) the rules do not provide for the payment of an amount in that financial year that meets the standard for the minimum amount in that subregulation; or
(b) that the rules do not ensure that the payments in the year in which the pension is to end meet the standard for the minimum amount in that subregulation.
(6) Rules:
(a) that do not meet the standards in subregulation (2); and
(b) that provide that the size of the payments of benefit in a year is fixed, allowing for variation only as specified in the rules or to allow payments to be made under a payment split; and
(c) under which the commencement day is on or after 1 July 1994;
meet the standards in this subregulation if they at least ensure that:
(d) the standards in paragraphs (2)(f), (g) and (h) are met; and
(e) except in relation to payments, by way of commutation, for superannuation contributions surcharge, variation in payments from year to year does not exceed, in any year, the average rate of increase of the CPI in the preceding 3 years; and
(f) payments in accordance with the contracted size are made at least annually; and
(g) if, under the rules, the pension can be commuted—except if conversion is in relation to a commutation to pay a superannuation contributions surcharge, the conversion to a lump sum is limited to a sum that is not greater than the sum determined by applying the appropriate pension valuation factor under Schedule 1B to the pension as if the commencement day were the day on which the commutation occurs.
(7) Rules meet the standards of this subregulation if the rules ensure that:
(a) for a pension that has a commencement day before 20 September 2004:
(i) if the life expectancy of the primary beneficiary on the commencement day is less than 15 years—the pension is paid at least annually to the primary beneficiary or to a reversionary beneficiary throughout a period equal to the primary beneficiary’s life expectancy on the commencement day, rounded up, at the primary beneficiary’s option, to the next whole number if the primary beneficiary’s life expectancy does not consist of a whole number of years; or