Document ID: chunk:federal_register_of_legislation:F2023C00046:clause:1_16
Version: federal_register_of_legislation:F2023C00046
Segment Type: clause
Provision Reference: sch 1 cl 16
Character Range: 31903–34356

16  Guidelines for asset‑test exempt income stream resulting from closure of a self managed superannuation fund
  The Commission may determine that an income stream is an asset‑test exempt income stream for the purposes of the Act if:
 (a) it would have been covered by section 5JA(1) or 5JB(1) of the Act or   those sections, if
             (i)       paragraph 5JA(1)(aa); or
             (ii)     subparagraph 5JB(1)(a)(i);
           of the Act did not apply; 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 died; or
 (ii) the administrative responsibilities of the fund supporting the original income stream became too onerous due to the age or incapacity of a trustee; and
 (e) the original income stream was:
 (i) covered by section 5JA or 5JB of the Act or would have been covered by those sections if paragraph 5JA(1)(aa) or subparagraph 5JB(1)(a)(i) of the Act did not apply; 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) was covered by the 2007 Determination during the period starting on 20 September 2007 and ending at the end of 24 November 2011; or
 (iii) was covered by the 2011 Determination during the period starting on 25 November 2011 and ending at the end of the day immediately prior to the commencement of this Determination; or
 (iv) is covered by this Determination.
Example
       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 5JA of the Act.  The new income stream is covered by this Determination and retains the 100% exemption from the assets test under the Act.