Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017

Administered by Department of Social Services

Legislation au F2017L00221 In force Legislative Instrument

Legislation content

Social Security (Asset test Exempt Income Stream (Market‑linked) — Payment Factors) Principles 2017

made under subsection 9BA(5) of the

Social Security Act 1991

Compilation No. 3

Compilation date: 1 July 2022

Includes amendments up to: F2022L00899

Registered: 13 July 2022

About this compilation

This compilation

This is a compilation of the Social Security (Asset test Exempt Income Stream (Market-linked) — Payment Factors) Principles 2017 that shows the text of the law as amended and in force on 1 July 2022 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

 

 

 

1 Name of Principles

  These Principles are the Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017.

3 Definition

  In these Principles:

Act means the Social Security Act 1991.

4 Payment factors

Definition of PF

(1) For the formula in subsection 9BA(5) of the Act, subject to subsection 4(1A) of these Principles, PF means the payment factor specified in column 3 of the table in this section of the Principles that corresponds with the remaining term of the income stream.  The payment factor is to be applied:

 (a) on 1 July of the financial year for which the total amount is being worked out; or

(b) if that financial year is the year in which the income stream commences — on the commencement day for the income stream,

(1A) If the financial year for which the total amount is being worked out is a financial year commencing 1 July 2019, 1 July 2020, 1 July 2021 or 1 July 2022, when applying the formula in subsection 9BA(5) of the Act to determine the minimum amount of the payments to be made under the income stream, PF means a number that is twice the payment factor specified in column 3 of the table in this section of the Principles that corresponds with the remaining term of the income stream.

 (2) If the amount worked out under subsection 9BA (5) of the Act (using the payment factor applicable under subsection (1)) is not $10, or a multiple of $10, the applicable payment factor is taken to be the factor that results in that amount rounding to $10, or the nearest multiple of $10, as appropriate.

 (3) For subsection (1), the remaining term of an income stream is rounded to the nearest whole year as follows:

 (a) if the commencement day of the income stream is on or after 1 January in a financial year, the term is rounded up to the nearest whole year;

 (b) if the commencement day is on or before 31 December in a financial year, the term is rounded down to the nearest whole year.

 

Payment factors

 

Item

Term of income stream remaining

Payment factors

1

70 or more

26.00

2

69

25.91

3

68

25.82

4

67

25.72

5

66

25.62

6

65

25.52

7

64

25.41

8

63

25.30

9

62

25.19

10

61

25.07

11

60

24.94

12

59

24.82

13

58

24.69

14

57

24.55

15

56

24.41

16

55

24.26

17

54

24.11

18

53

23.96

19

52

23.80

20

51

23.63

21

50

23.46

22

49

23.28

23

48

23.09

24

47

22.90

25

46

22.70

26

45

22.50

27

44

22.28

28

43

22.06

29

42

21.83

30

41

21.60

31

40

21.36

32

39

21.10

33

38

20.84

34

37

20.57

35

36

20.29

36

35

20.00

37

34

19.70

38

33

19.39

39

32

19.07

40

31

18.74

41

30

18.39

42

29

18.04

43

28

17.67

44

27

17.29

45

26

16.89

46

25

16.48

47

24

16.06

48

23

15.62

49

22

15.17

50

21

14.70

51

20

14.21

52

19

13.71

53

18

13.19

54

17

12.65

55

16

12.09

56

15

11.52

57

14

10.92

58

13

10.30

59

12

9.66

60

11

9.00

61

10

8.32

62

9

7.61

63

8

6.87

64

7

6.11

65

6

5.33

66

5

4.52

67

4

3.67

68

3

2.80

69

2

1.90

70

1 or less

1.00

Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.

If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.

 

Endnote 2—Abbreviation key

ad = added or inserted

o = order(s)

am = amended

Ord = Ordinance

amdt = amendment

orig = original

c = clause(s)

par = paragraph(s)/subparagraph(s)

C[x] = Compilation No. x

/sub‑subparagraph(s)

Ch = Chapter(s)

pres = present

def = definition(s)

prev = previous

Dict = Dictionary

(prev…) = previously

disallowed = disallowed by Parliament

Pt = Part(s)

Div = Division(s)

r = regulation(s)/rule(s)

ed = editorial change

reloc = relocated

exp = expires/expired or ceases/ceased to have

renum = renumbered

effect

rep = repealed

F = Federal Register of Legislation

rs = repealed and substituted

gaz = gazette

s = section(s)/subsection(s)

LA = Legislation Act 2003

Sch = Schedule(s)

LIA = Legislative Instruments Act 2003

Sdiv = Subdivision(s)

(md) = misdescribed amendment can be given

SLI = Select Legislative Instrument

effect

SR = Statutory Rules

(md not incorp) = misdescribed amendment

Sub‑Ch = Sub‑Chapter(s)

cannot be given effect

SubPt = Subpart(s)

mod = modified/modification

underlining = whole or part not

No. = Number(s)

commenced or to be commenced

 

Endnote 3—Legislation history

 

Name

Registration

Commencement

Application, saving and transitional provisions

Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017

14 Mar 2017 (F2017L00221)

1 Apr 2017 (s 2)

 

Social Security Legislation Amendment (Measures No. 1) Determination 2020

25 June 2020 (F2020L00786)

26 June 2020 (s 2(1))

—

Social Security (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Amendment (Minimum Amount) Principles 2021

28 July 2021 (F2021L01036)

29 July 2021 (s 2(1) item 1)

—

Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Amendment (Minimum Amount) Principles 2022

30 June 2022 (F2022L00899)

1 July 2022 (s 2(1) item 1)

—

 

Endnote 4—Amendment history

 

Provision affected

How affected

s 2.....................

rep LA s 48D

s 4.....................

am F2020L00786; F2021L01036; F2022L00899

 

 

Overview

The Social Security (Asset test Exempt Income Stream (Market-linked) — Payment Factors) Principles 2017 were enacted under subsection 9BA(5) of the Social Security Act 1991 by the Parliament of Australia. The objective of these principles is to provide a set of payment factors used to determine the minimum amount of payments to be made under a market-linked exempt income stream for the purposes of the asset test. These factors are integral in ensuring that the income stream calculations align with the policy intent of providing fair and accurate assessments for social security recipients. This legislative instrument aims to fill the gap by offering a structured approach to calculating these payment factors, thereby supporting the effective implementation of the asset test provisions within the Social Security Act. The principles define the payment factors to be used in the formula specified in subsection 9BA(5) of the Act, ensuring that the calculations are both precise and consistent. These factors are adjusted based on the remaining term of the income stream, with specific values provided for different durations. The principles also include provisions for rounding the remaining term of the income stream to the nearest whole year and adjusting the payment factors to ensure that the calculated amounts are rounded to the nearest multiple of $10. This approach aims to maintain the integrity and fairness of the asset test, ensuring that all recipients are assessed accurately.

Scope and Application

The Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017 applies to individuals who receive income streams from market-linked investments, such as annuities or pensions, that are subject to the asset test under the Social Security Act 1991. These Principles provide the methodology for calculating the minimum amount of payments to be made from these income streams, which in turn affects the eligibility and amount of social security benefits that recipients can receive. The application of these Principles is governed by the Social Security Act 1991 and related legislation, and they are administered by the Department of Human Services. The Principles are applicable across Australia, as the Social Security Act 1991 is a Commonwealth Act. While these Principles focus on the calculation of payment factors for market-linked income streams, they do not specify exclusions, exemptions, or thresholds beyond the context of the asset test for social security benefits. The application and effect of these Principles can be extended or modified through subordinate instruments, such as the amendments made in 2020, 2021, and 2022 to adjust the minimum amount of payments.

Key Provisions

The Social Security (Asset test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017 (the Principles) provide a framework for determining payment factors for market-linked exempt income streams under the Social Security Act 1991. These payment factors are crucial for calculating the minimum amount of payments that must be made under such income streams. The primary provision of the Principles (section 2) defines the payment factors (PF) based on the remaining term of the income stream. These factors are specified in a table, with each row corresponding to a specific term range and a corresponding payment factor. Under the Principles, the payment factor for the formula in subsection 9BA(5) of the Act is determined by identifying the row in the table that matches the remaining term of the income stream. The payment factor is applied either on 1 July of the financial year for which the total amount is being worked out, or on the commencement day of the income stream if that financial year is the year in which the income stream commences (section 4(1)). Special provisions apply for financial years commencing on 1 July 2019, 2020, 2021, and 2022, where the payment factor is doubled (section 4(1A)). If the amount calculated using the applicable payment factor does not round to $10 or a multiple of $10, the payment factor is adjusted to achieve the nearest multiple of $10 (section 4(2)). The remaining term of the income stream is rounded to the nearest whole year, with different rules applying depending on whether the commencement day falls before or after 1 January in a financial year (section 4(3)). The Principles impose several obligations on the parties or entities they govern. They require that payment factors be determined according to the table provided and applied correctly in calculations under the Social Security Act. This includes rounding the remaining term of the income stream and adjusting the payment factor if necessary to ensure the calculated amount rounds to the nearest multiple of $10. Additionally, for specific financial years, the doubling of the payment factor must be factored into the calculations. Compliance with these provisions is necessary to ensure that the minimum amount of payments under market-linked exempt income streams is accurately determined. Failure to comply with the requirements set out in the Principles may result in civil or criminal consequences. While the Principles themselves do not specify penalties, breaches of the Social Security Act 1991, in which these Principles operate, can result in significant penalties. For example, providing false or misleading information to obtain social security payments can lead to fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as potential criminal charges. The specific penalties for breaches of related provisions in the Social Security Act should be consulted for precise details regarding the consequences of non-compliance with the Principles.

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Social Security
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Legislative Instrument
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.