Untitled document
Social Security (Value of Asset‑tested Income Streams (Lifetime)) Determination 2019
I, Kathryn Campbell, Secretary of the Department of Social Services, make the following determination.
Dated 14 June 2019
Kathryn Campbell AO CSC
Secretary of the Department of Social Services
Contents
1............ Name............................................................................................................................. 1
2............ Commencement............................................................................................................. 1
3............ Authority....................................................................................................................... 1
4............ Definitions..................................................................................................................... 1
5............ Surrender value method................................................................................................. 2
6............ Death benefit method..................................................................................................... 4
1 Name
This instrument is the Social Security (Value of Asset-tested Income Streams (Lifetime)) Determination 2019.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information | ||
| Column 1 | Column 2 | Column 3 |
| Provisions | Commencement | Date/Details |
| 1. The whole of this instrument | 1 July 2019. | 1 July 2019 |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under subsection 1120AB(4) of the Social Security Act 1991.
4 Definitions
Note: A number of expressions used in this instrument are defined in the Act, including the following:
(a) asset‑tested income stream (lifetime) (see section 9E of the Act);
(b) assessment day (see subsections 1120AB(6) and (7) of the Act);
(c) governing rules (see section 9 of the Act).
In this instrument:
access amount, for a particular day (the access day) for an asset‑tested income stream (lifetime), means the sum of:
(a) the maximum amount that would have been payable for the income stream, as determined by the contract or governing rules for the provision of the income stream, if the income stream had been commuted on the assessment day for the income stream; and
(b) any instalments paid for the income stream after the assessment day and before the access day.
Act means the Social Security Act 1991.
death benefit, for a particular day for an asset‑tested income stream (lifetime), means the maximum commutation amount that would be payable for the income stream, as determined by the contract or governing rules for the provision of the income stream, if the person, or persons, eligible to receive the income stream died on that day.
death benefit comparison value has the meaning given by subsection 6(3).
first half of the life expectancy period, for an asset‑tested income stream (lifetime), means the number of days in the period:
(a) starting on the assessment day for the income stream; and
(b) ending when the number of days equal to the life expectancy period for the income stream divided by 2, and rounded down to the nearest whole number, have passed.
life expectancy period, for an asset‑tested income stream (lifetime), means the number of days worked out by:
(a) using the Life Tables to calculate the number of days, as at the assessment day, in the life expectancy of:
(i) the person eligible to receive the income stream; or
(ii) for a joint income stream—the eldest of those eligible to receive the income stream; and
(b) rounding that number of days down to the nearest whole number of years; and
(c) converting those years to a number of days, assuming 365 days in a year.
Life Tables means the Australian Life Tables 2010‑2012 published by the Australian Government Actuary.
surrender comparison value has the meaning given by subsection 5(3).
surrender value, for a particular day for an asset‑tested income stream (lifetime), means the maximum commutation amount that would be payable for the income stream, as determined by the contract or governing rules for the provision of the income stream, if the person, or persons, eligible to receive the income stream did not die on that day.
5 Surrender value method
(1) This section sets out a method for working out the value of an asset‑tested income stream (lifetime) by reference to the surrender value of the income stream.
(2) The value of a person’s asset‑tested income stream (lifetime) on a particular day is the highest value for that day or any later day worked out using the following method statement.
Method statement
Step 1. Determine the surrender value of the asset‑tested income stream (lifetime) for the day.
Step 2. Compare the surrender value with the surrender comparison value of the income stream for the day (see subsection (3)).
Step 3. The value of the income stream for the day is:
(a) if the surrender value is more than the surrender comparison value and the income stream is not a joint income stream—the surrender value; or
(b) if the surrender value is more than the surrender comparison value and the income stream is a joint income stream—the surrender value multiplied by the proportion of the income stream attributable to the person on that day; or
(c) if the surrender value is less than or equal to the surrender comparison value—nil.
(3) The surrender comparison value of an asset‑tested income stream (lifetime) is:
(a) for a day during the 14 day period that begins on the assessment day for the income stream—the access amount for the day;
(b) for any other day:
(i) unless subparagraph (ii) applies—the amount worked out for the day under subsection (4); or
(ii) if the amount worked out for the day under subsection (4) is less than or equal to zero—nil.
(4) For the purposes of paragraph (3)(b), the amount for a day (the access day) is worked out using the following formula:
where:
previously commuted amount means the sum of any amounts commuted from the income stream before the access day.
remaining life expectancy means the number of days remaining in the life expectancy period for the income stream after subtracting the number of days in the period:
(a) starting on the assessment day for the income stream; and
(b) ending on the access day.
6 Death benefit method
(1) This section sets out a method for working out the value of an asset‑tested income stream (lifetime) by reference to the death benefit of the income stream.
(2) The value of a person’s asset‑tested income stream (lifetime) on a particular day is the highest value for that day or any later day worked out using the following method statement.
Method statement
Step 1. Determine the death benefit of the asset‑tested income stream (lifetime) for the day.
Step 2. Compare the death benefit with the death benefit comparison value of the income stream for the day (see subsection (3)).
Step 3. The value of the income stream for the day is:
(a) if the death benefit is more than the death benefit comparison value and the income stream is not a joint income stream—the death benefit; or
(b) if the death benefit is more than the death benefit comparison value and the income stream is a joint income stream—the death benefit multiplied by the proportion of the income stream attributable to the person on that day; or
(c) if the death benefit is less than or equal to the death benefit comparison value—nil.
(3) The death benefit comparison value of an asset‑tested income stream (lifetime) is:
(a) for a day within the first half of the life expectancy period for the income stream—the access amount for the day;
(b) for any other day:
(i) unless subparagraph (ii) applies—the amount worked out for the day under subsection (4); or
(ii) if the amount worked out for the day under subsection (4) is less than or equal to zero—nil.
(4) For the purposes of paragraph (3)(b), the amount for a day (the access day) is worked out using the following formula:
where:
previously commuted amount means the sum of any amounts commuted from the income stream before the access day.
remaining life expectancy means the number of days remaining in the life expectancy period for the income stream after subtracting the number of days in the period:
(a) starting on the assessment day for the income stream; and
(b) ending on the access day.
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