Earnings tax exemption and lifetime income streams

The new lifetime income stream products will have the benefit of the earnings tax exemption if the investor is in retirement phase (ie the investor has attained an unrestricted release condition – typically age 65 or being retired for super purposes).  

In the case of deferred lifetime income stream products, they will have the benefit of the earnings tax exemption from the time the investor has attained an unrestricted release condition or from the time of purchase – whichever is the later.

In the case of a lifetime income stream products purchased by instalments – they will have the benefit of the earnings tax exemption from the time the last instalment is paid or the investor attains an unrestricted release condition.

Going back to Bertie and Jeeves – Bertie will have the benefit of the earnings tax exemption in respect of his allocated pension and also in respect of his deferred superannuation income stream (as Bertie has attained an unrestricted release condition – that being age 65).  Additionally, while the allocated pension will be subject to the minimum payment requirement his deferred superannuation income stream will only be subject to a payment requirement once Bertie attains age 85.