A More Flexible and Adaptable Retirement Income System - Assets Test Exemption for Income Streams 

What's New?


On 25 February 2004 the Government announced it would provide greater choice for retirees in managing their financial affairs in retirement, and also make the retirement income system fairer through changes to the treatment of some income stream products.
  • A 50 per cent assets test exemption will be applied to a new investment product, 'market-linked income streams', from 20 September 2004. This product will provide returns linked to the investment market but the purchaser will not be able to withdraw their capital before the term of the product has ended (that is, it is non-commutable).
  • The 100 per cent assets test exemption which is currently available to certain non-commutable purchased income streams will be reduced to a 50 per cent exemption.

Background


The Treasurer announced this measure on 25 February 2004 as part of the package of changes contained in A More Flexible and Adaptable Retirement Income System.

The changes will apply to income stream products purchased from 20 September 2004. The measure will not affect the assets test treatment of income stream products purchased before this date.

Implementation


20 September 2004.

Total Financial Impact


Net saving of $181.5 million over five years.
Content Updated: 1 June 2012