5Determination of kinds of income stream

5 Determination of kinds of income stream

(1) This section applies to an income stream in relation to which paragraphs 5JE(1)(a) to (d) of the Act are satisfied. Guaranteed minimum income for life income stream (2) The income stream is determined to be a kind of income stream for the purposes of paragraph 5JE(2)(b) of the Act if, under the contract or governing rules for the provision of the income stream, the income stream includes: (a) a part that is an account‑based annuity, an account‑based pension, an allocated annuity or an allocated pension; and (b) a part (the lifetime component) that makes regular payments to an individual and has the following elements: (i) once they start, the payments are payable for the remainder of the life of the individual; (ii) the payments become payable only after the account balance of the individual’s annuity or pension mentioned in paragraph (a) is reduced below a threshold specified in the contract or governing rules; (iii) the value of the payments is specified in the contract or governing rules. Lifetime income stream packaged with account‑based income stream (3) The income stream is determined to be a kind of income stream for the purposes of paragraph 5JE(2)(b) of the Act if, under the contract or governing rules for the income stream, the income stream includes: (a) a part that is an account‑based annuity, an account‑based pension, an allocated annuity or an allocated pension; and (b) a part (the lifetime component) that makes regular payments to, or for the benefit of, an individual and has the following elements: (i) once they start, the payments are payable for the remainder of the life of the individual; (ii) the value of the payments is determined by having regard to the age, life expectancy or other factors relevant to the individual’s mortality; (iii) in order to obtain the payments, the individual is (directly or indirectly) required to pay an amount or amounts into a specified fund or investment option held for the collective benefit of individuals who have invested in that fund or investment option; (iv) amounts paid into the specified fund or investment option (whether by the individual or any other individual) can be forfeited if an income stream is commuted or a person dies; (v) payments made by the specified fund or investment option are financed partly from amounts so forfeited.

Lifetime income stream packaged with a term-limited income stream

(4) The income stream is determined to be a kind of income stream for the purposes of paragraph 5JE(2)(b) of the Act if, under the contract or governing rules for the provision of the income stream, the income stream includes: (a) a part that makes regular payments to an individual for a specified term; and (b) a part (the lifetime component) that makes regular payments to an individual and has the following elements: (i) once they start, the payments are payable for the remainder of the life of one or more individuals; (ii) the value of the payments is determined by having regard to the age, life expectancy or other factors relevant to the individual’s mortality.