Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 54 - Exemption for certain payments made under structured settlements and structured orders  

Subdivision 54-B - Tax exemption for personal injury annuities  

Operative provisions

SECTION 54-30   Requirements for payments of the annuity  

54-30(1)    
The *annuity instrument must provide that payments of the *annuity are to be made at least annually:

(a) over a period of at least 10 years during the life of the *injured person; or

(b) for the life of the injured person.

54-30(2)    
The *annuity instrument must specify:

(a) the date of the first payment of the *annuity; and

(b) if the annuity instrument specifies a period of years - the date of the last payment in that period; and

(c) the amount of each periodic payment of the annuity.

54-30(3)    
The *annuity instrument may only allow the amount of a payment to be varied by increasing the amount:

(a) in order to maintain its real value:

(i) by indexation by reference to increases in the *All Groups Consumer Price Index number; or

(ii) by indexation by reference to increases in the full-time adult average weekly ordinary time earnings, published by the Australian Statistician; or

(b) by a percentage specified in the annuity instrument.

54-30(4)    
The *annuity instrument may only allow the amount of a particular payment to be varied:

(a) by only one of the methods referred to in subsection (3); or

(b) by whichever of 2 or more of those methods would result in the biggest or smallest increase.

54-30(5)    
A reference in this section to specifying a date or percentage requires an actual date or figure to be specified, not merely a method of determining a date or figure.

Example:

Under subsection (2), " 13 September 2002 " would be allowed, but " The date on which the annuitant finishes university " would not be allowed.