Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998

Administered by Department of Veterans' Affairs

Legislation au F2005B01117 Not in force Legislative Instrument

Legislation content

 

 

Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998

 

As amended

 

made under the

 

Veterans’ Entitlements Act 1986

 

This compilation was prepared on 29 July 2013

taking into account amendments up to:

 

Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Amendment Determination 1999 (No.5 of 1999)(F2005B01121)

 

Prepared by the Legal Services and Assurance Branch,

Department of Veterans' Affairs, Canberra.

 

 

 

 

 

 

 

Part 1-Preliminary

 

1.1           Name of determination

 

 This determination is the Asset-test Exempt Income Stream (Lifetime

 Income Stream Guidelines) Determination 1998.

 

1.2           Commencement

 

 This determination commences on 20 September 1998.

 

1.3           Definitions

 

In this determination:

Act means the Veterans’ Entitlements Act 1986.

defined benefit fund has the same meaning as in subregulation 1.03(1) of the Superannuation Industry Supervision Regulations.

defined benefit superannuation pension means a pension product that pays a superannuation pension from a defined benefit fund.

lifetime income stream, in relation to a person, means an income stream in which payments are made, at least annually, throughout the life of the person and, if there is a reversionary beneficiary, throughout the life of the reversionary beneficiary.

private sector fund has the same meaning as in subsection 10 (1) of the Superannuation Industry (Supervision) Act 1993

public sector fund has the same meaning as in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.

public sector superannuation scheme has the same meaning as in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.

superannuation fund has the same meaning as in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993.

superannuation pension means a pension payable from a superannuation

fund.

 

Note The following expressions used in this determination are defined in the Act (see ss 5J(1), 5J(1E), 5JA and 5JB):

 

  • asset-test exempt income stream
  • commencement day
  • defined benefit income stream
  • governing rules
  • income stream.

 

1.4 Purpose

 

 The purpose of this determination is to set out the guidelines for the exercise

 of the Repatriation Commission’s discretion, under subsection 5JA(5) of the

 Act, to determine that an income stream that does not meet the requirements

 of subsection 5JA(2) is an asset-test exempt income stream for the purposes

 of the Act.

 

Part 2 — Guidelines

 

2.1 Lifetime income stream under a public sector fund or superannuation scheme

 

(1) In making a determination under subsection 5JA(5) of the Act in relation to an income stream arising under a public sector fund or a public sector superannuation scheme, the Commission must have regard to this section.

 

(2) The income stream must be a lifetime income stream that is a defined benefit income stream, the amount of payments under which is determined by the governing rules of the fund or scheme, and that:

 

(a) is a defined benefit superannuation pension; or

 

(b) is a superannuation pension under an exempt public sector superannuation scheme, within the meaning of section 10 of the Superannuation Industry (Supervision) Act 1993, being a scheme to which subregulation 1.04 (4A) of the

Superannuation Industry (Supervision) Regulations 1994 applies in accordance with subregulation 1.04 (4E) of those Regulations.

 

(3)         The fund or scheme must have been established before

 20 September 1998 and:

 

(a)         for an income stream commencing before

 20 September 1998 — the value of the income stream is disregarded in calculating the value of the assets of the person concerned, because of section 52 of the Act as in force immediately before 20 September l998 (the previous section 52); or

 

(b)       for an income Stream commencing on or after

20 September 1998, that is a defined benefit superannuation pension existing before 20 September 1998 — the value of the income stream would have been disregarded in

 

calculating the value of the person's assets under the previous section 52 as it would have applied if:

 

(i)  the commencement day of the income stream was before 20 September 1998; and

(ii) defined benefit superannuation pension payments were made before 20 September 1998.

 

2.2 Lifetime income stream under a private sector fund

 

(1) In making a determination under subsection 5JA(5) of the Act in relation to an income stream arising under a private sector fund, the Commission must have regard to this section.

 

(2) The income stream must be a lifetime income stream that:

 

 (a) is a defined benefit income stream, the amount of payments under which is determined by the governing rules of the fund; and

 

 (b) is a defined benefit superannuation pension.

 

(3) The fund must have been established before 20 September 1998 and:

 

(a)            for an income stream commencing before

 20 September 1998 — the value of the income stream is disregarded in calculating the value of the assets of the person concerned, because of section 52 of the Act as in force immediately before 20 September 1998 (the previous section 52); or

 

(b)            for an income stream commencing on or after

 20 September 1998, that is a defined benefit superannuation pension existing before 20 September 1998 — the value of the income stream would have been disregarded in calculating the value of the person's

 

assets under the previous section 52 as it would have applied if:

 

(i)                the commencement day of the income stream was before 20 September 1998; and

(ii)           defined benefit superannuation pension payments were made before 20 September 1998.

 

(4) The fund must have a direct connection with the previous employment of the recipient of the income stream or, in the case of a reversionary beneficiary, the person who would be the recipient if he or she had not died.

 

(5)             For subsection (4), a fund has a direct connection with a

  person's previous employment if the income stream from the fund became payable to, or in respect of, the person because of that employment.

 


Notes to the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998

 

Note 1

 

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998 (in force under the Veterans’ Entitlements Act 1986) as shown in this compilation comprises the legislative instruments indicated in the Table below.

Table of Legislative Instruments

Year and
number

Date of FRLI
registration

Date of
commencement

Application, saving or
transitional provisions

1998 No.10

14 April 2005 see (F2005B01117)

20 September 1998

 

1999 No.5

14 April 2005 (see F2005B01121 )

18 September 1999

 

 

 

Table of Amendments

ad. = added or inserted      am. = amended      rep. = repealed      rs. = repealed and substituted

Provision affected

How affected

Section 1.3

am. 1999 No.5

Part 2

rs. 1999 No.5

 

Overview

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998, enacted under the Veterans’ Entitlements Act 1986, was introduced to address the need for clear guidelines on the exercise of the Repatriation Commission's discretion regarding asset-test exempt income streams. The determination was made by the Repatriation Commission and is designed to ensure that certain income streams can be considered exempt from asset tests for the purposes of the Act. Specifically, the determination provides guidelines for the Commission when assessing income streams that arise from public or private sector funds or schemes, particularly those that have been established prior to the commencement date of the Determination on 20 September 1998. The policy objective is to facilitate the assessment process by establishing criteria that must be met for an income stream to qualify as an asset-test exempt income stream.

Scope and Application

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998 applies to veterans and their dependants under the Veterans’ Entitlements Act 1986. It sets out the guidelines for the Repatriation Commission to exercise its discretion in determining that an income stream is exempt from asset-testing. This determination applies to income streams arising from both public and private sector superannuation funds or schemes that meet specific criteria, including being established before 20 September 1998 and having a defined benefit nature. The determination also mandates that the income stream must be a lifetime income stream with payments determined by the governing rules of the fund or scheme. This instrument extends its application through subordinate instruments, such as the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Amendment Determination 1999, which further refines and updates the guidelines. The scope of the determination is national, as it is a Commonwealth instrument made under the Veterans’ Entitlements Act 1986.

Key Provisions

The main operative sections of the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998 (hereafter, the Determination) detail the guidelines for the Repatriation Commission’s discretion under subsection 5JA(5) of the Veterans’ Entitlements Act 1986. Section 2.1 specifies that for income streams arising from public sector funds or superannuation schemes, the Commission must ensure the income stream is a defined benefit income stream, the amount of payments of which is determined by the governing rules of the fund or scheme. This income stream must be a defined benefit superannuation pension or a superannuation pension under an exempt public sector superannuation scheme. Additionally, the fund or scheme must have been established before 20 September 1998, and the value of the income stream must be disregarded in calculating the value of the person's assets (subsection 2.1(3)). Similarly, section 2.2 applies to income streams arising from private sector funds, which must also be defined benefit income streams whose payments are determined by the governing rules of the fund and must be defined benefit superannuation pensions. The fund must have been established before 20 September 1998 and must have a direct connection with the recipient’s previous employment or the person who would be the recipient if they had not died (subsection 2.2(4)). The Determination imposes specific obligations on the parties involved. For the Repatriation Commission, it mandates the exercise of discretion in determining whether an income stream qualifies as an asset-test exempt income stream. This involves assessing whether the income stream meets the specified criteria, such as being a defined benefit income stream with payments determined by governing rules, and ensuring that the fund or scheme was established before 20 September 1998. For recipients of income streams, particularly those derived from public or private sector funds, the Determination requires that they provide evidence of the income stream’s compliance with the guidelines to the Commission. This includes demonstrating the direct connection between the income stream and their previous employment, where applicable. The Determination also places an obligation on the funds or schemes themselves to maintain records and documentation that substantiate the income stream’s eligibility under the guidelines. There are no explicit offences, penalties, or civil/criminal consequences mentioned for breach of the Determination itself. However, any failure to comply with the guidelines set out in the Determination could potentially lead to disputes or challenges regarding the asset-test exemption of the income stream. Such non-compliance might result in the income stream not being recognised as exempt for the purposes of the asset test, potentially affecting the recipient’s eligibility for certain veterans’ entitlements. While the Determination does not specify penalties, any resulting disputes or challenges could be addressed through the relevant provisions of the Veterans’ Entitlements Act 1986 or other applicable legislation, which might include administrative reviews, judicial review, or other legal remedies.

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