Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 8/32)
Character Range: 1401474–1404211

which the lump sum is provided; and
 (b) only allow for the payment of the lump sum to be made to:
 (i) the *injured person; or
 (ii) a trustee of a trust of which the injured person is the beneficiary; and
 (c) contain a statement to the effect that the right to receive the lump sum cannot be assigned, and cannot be commuted or otherwise cashed‑out early.
Note: Division 2A of Part 10 of the Life Insurance Act 1995 makes a purported assignment or commutation (or cashing‑out) that is contrary to paragraph (c) ineffective.

54‑60  Requirements for payments of the lump sum
 (1) The instrument under which the *personal injury lump sum is paid must specify the date and amount of the payment of the lump sum.
 (2) The instrument may only allow the amount of the payment to be varied by increasing the amount:
 (a) in order to maintain its real value:
 (i) by indexation by reference to increases in the *All Groups Consumer Price Index number; or
 (ii) by indexation by reference to increases in the full‑time adult average weekly ordinary time earnings, published by the Australian Statistician; or
 (b) by a percentage specified in the instrument.
 (3) The instrument may only allow the amount of the payment to be varied:
 (a) by only one of the methods referred to in subsection (2); or
 (b) by whichever of 2 or more of those methods would result in the biggest or smallest increase.
 (4) A reference in this section to specifying a date or percentage requires an actual date or figure to be specified, not merely a method of determining a date or figure.
Example: Under subsection (1), "13 September 2002" would be allowed, but "The date on which the annuitant finishes university" would not be allowed.

Subdivision 54‑D—Miscellaneous

Table of sections

Operative provisions
54‑65 Exemption for certain payments to reversionary beneficiaries
54‑70 Special provisions about trusts
54‑75 Minister to arrange for review and report

Operative provisions

54‑65  Exemption for certain payments to reversionary beneficiaries
  A payment that is made to the reversionary beneficiary of a *personal injury annuity for which there is a *guarantee period is exempt from income tax if:
 (a) the payment is a periodic or lump sum payment made in accordance with subsection 54‑35(3); and
 (b) either:
 (i) if subparagraph 54‑35(3)(b)(i) applies—the payment; or
 (ii) if subparagraph 54‑35(3)(b)(ii) applies—each of the payments taken into account in working out the amount of the lump sum under subsection 54‑35(5);
  would be exempt from income tax under this Division if the *injured person were still alive and the payment, or each of the payments, were instead made to the injured person.

54‑70  Special provisions about trusts
 (1) A