Document ID: chunk:federal_register_of_legislation:F2023C00049:clause:1_28
Version: federal_register_of_legislation:F2023C00049
Segment Type: clause
Provision Reference: sch 1 cl 28
Character Range: 44984–46748

28  Commutation of partially asset‑test exempt income stream resulting from closure of a self managed superannuation fund
  These Principles cover an income stream if:
 (a) it is purchased by the primary beneficiary; and
 (b) it is not sourced from a self managed superannuation fund; and
 (c) it results from a partially 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 has died; or
 (ii) the administrative responsibilities of the fund supporting the original income stream have become too onerous due to the age or incapacity of a trustee; and
 (d) the original income stream was:
 (i) covered by section 5JA, 5JB, or 5JBA of the Act or would have been covered by those sections if paragraph 5JA(1)(aa), subparagraph 5JB(1)(a)(i) or subparagraph 5JBA(1)(a)(i) of the Act did not apply; and
 (ii) sourced from a self managed superannuation fund; and
 (iii) covered by the 2007 Principles, 2011 Principles or these Principles.
       Example
       G and A are trustees of their self managed superannuation fund.  They both have market‑linked asset‑test exempt income streams that were purchased on 1 July 2005 when G was 65 and A was 64. G dies on 26 January 2015. A subsequently decides that she does not have the expertise or inclination to continue as a fund trustee.  A commutes her market‑linked 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 5JBA of the Act.  The new income stream is covered by these Principles and retains the 50% exemption from the assets test under the Act.