Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 4/32)
Character Range: 1391773–1394446

Note: Section 54‑70 provides a tax exemption if the payment is instead made to the trustee of a trust.

54‑20  Lump sum compensation etc. would not have been assessable
  If the compensation or damages that were used to purchase the *annuity had instead been paid to the *injured person in a single lump sum on the *date of the settlement or order, the compensation or damages would not have been assessable income.
Note: Paragraph 118‑37(1)(b) disregards a capital gain or capital loss that arises from compensation or damages the injured person receives for any wrong he or she suffers personally.

54‑25  Requirements of the annuity instrument
  The *annuity instrument must:
 (a) identify the *structured settlement or *structured order under which the *annuity is provided; and
 (b) only allow for payments of the annuity to be made to:
 (i) the injured person; or
 (ii) a trustee of a trust of which the injured person is the beneficiary; or
 (iii) a reversionary beneficiary, or the injured person's estate, in accordance with section 54‑35; and
 (c) contain a statement to the effect that the annuity cannot be assigned, and cannot be commuted except as mentioned in section 54‑35.
Note: Division 2A of Part 10 of the Life Insurance Act 1995 makes a purported assignment or commutation that is contrary to paragraph (c) ineffective.

54‑30  Requirements for payments of the annuity
 (1) The *annuity instrument must provide that payments of the *annuity are to be made at least annually:
 (a) over a period of at least 10 years during the life of the *injured person; or
 (b) for the life of the injured person.
 (2) The *annuity instrument must specify:
 (a) the date of the first payment of the *annuity; and
 (b) if the annuity instrument specifies a period of years—the date of the last payment in that period; and
 (c) the amount of each periodic payment of the annuity.
 (3) The *annuity instrument may only allow the amount of a 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 annuity instrument.
 (4) The *annuity instrument may only allow the amount of a particular payment to be varied:
 (a) by only one of the methods referred to in subsection (3); or
 (b) by whichever of 2 or more of those methods would result in the biggest or smallest increase.
 (5) A reference in this section to specifying a date or percentage requires