Schedule 1AAB

Payment limits for annuities and pensions with a commencement day on and after 1 January 2006

Current

(subregulations 1.05(4) and 1.06(4))

1. Subject to clauses 3, 4 and 5, the maximum limits mentioned in paragraph 1.05(4)(f) or 1.06(4)(e) are determined under the formula:

where:

AB means the amount of the annuity account balance, or pension account balance, as the case requires:

(a)

on 1 July in the financial year in which the payments are made; or

(b)

if that year is the year in which the annuity payments, or pension payments, commence—on the commencement day.

PVF means the maximum pension valuation factor set out in Column 3 of the Table in this Schedule in relation to the item in the Table that represents the age of the beneficiary on:

(a)

1 July in the financial year in which the payments are made; or

(b)

if that is the year in which the annuity payments, or pension payments, commence—the commencement day.

2. Subject to clauses 3, 3A, 3B and 4, the minimum limits mentioned in paragraph 1.05(4)(f) or 1.06(4)(e) are determined under the formula:

where:

AB means the amount of the annuity account balance, or pension account balance, as the case requires:

(a)

on 1 July in the financial year in which the payments are made; or

(b)

if that year is the year in which the annuity payments, or pension payments, commence—on the commencement day.

PVF means the minimum pension valuation factor set out in Column 4 of the Table in this Schedule in relation to the item in the Table that represents the age of the beneficiary on:

(a)

1 July in the financial year in which the payments are made; or

(b)

if that is the year in which the annuity payments, or pension payments, commence—the commencement day.

3. For a calculation of the maximum or minimum limit in the year in which the commencement day of the pension or annuity occurs if that day is a day other than 1 July, the appropriate value set out in Column 3 or Column 4 of the Table in this Schedule as the case requires, must be applied proportionally to the number of days in the financial year that include and follow the commencement day.

3A. For the financial years commencing on 1 July 2008, 1 July 2009, 1 July 2010, 1 July 2019, 1 July 2020, 1 July 2021 and 1 July 2022, the minimum limit is half of the amount determined under the formula in clause 2.

3B. For the financial years commencing on 1 July 2011 and 1 July 2012, the minimum limit is 75% of the amount determined under the formula in clause 2.

4. An amount determined under the formula in clause 1 or clause 2, is rounded to the nearest 10 whole dollars.

5. In a year in which a PVF of 1 is used in calculating the maximum limit under clause 1, payment of the full account balance may be made at any time during the year.

Table

Column 1 Item	Column 2 Age of Beneficiary	Column 3 Maximum Pension Valuation Factor	Column 4 Minimum Pension Valuation Factor
1	20 or less	12.0	29.2
2	21	12.0	29.0
3	22	12.0	28.9
4	23	12.0	28.7
5	24	12.0	28.6
6	25	12.0	28.4
7	26	12.0	28.3
8	27	12.0	28.1
9	28	12.0	27.9
10	29	12.0	27.8
11	30	12.0	27.6
12	31	12.0	27.4
13	32	12.0	27.2
14	33	12.0	27.0
15	34	12.0	26.8
16	35	12.0	26.6
17	36	12.0	26.4
18	37	12.0	26.2
19	38	12.0	26.0
20	39	12.0	25.8
21	40	12.0	25.5
22	41	12.0	25.3
23	42	12.0	25.0
24	43	12.0	24.8
25	44	12.0	24.5
26	45	12.0	24.2
27	46	12.0	24.0
28	47	12.0	23.7
29	48	12.0	23.4
30	49	12.0	23.1
31	50	12.0	22.8
32	51	11.9	22.5
33	52	11.8	22.2
34	53	11.8	21.8
35	54	11.7	21.5
36	55	11.5	21.1
37	56	11.4	20.8
38	57	11.3	20.4
39	58	11.2	20.1
40	59	11.0	19.7
41	60	10.9	19.3
42	61	10.7	18.9
43	62	10.5	18.5
44	63	10.3	18.1
45	64	10.1	17.7
46	65	9.9	17.3
47	66	9.6	16.8
48	67	9.3	16.4
49	68	9.1	16.0
50	69	8.7	15.5
51	70	8.4	15.1
52	71	8.0	14.6
53	72	7.6	14.2
54	73	7.2	13.7
55	74	6.7	13.3
56	75	6.2	12.8
57	76	5.7	12.3
58	77	5.1	11.9
59	78	4.5	11.4
60	79	3.8	10.9
61	80	3.1	10.5
62	81	2.3	10.0
63	82	1.4	9.6
64	83	1	9.1
65	84	1	8.7
66	85	1	8.3
67	86	1	7.9
68	87	1	7.5
69	88	1	7.2
70	89	1	6.9
71	90	1	6.6
72	91	1	6.3
73	92	1	6.0
74	93	1	5.8
75	94	1	5.5
76	95	1	5.3
77	96	1	5.1
78	97	1	4.9
79	98	1	4.7
80	99	1	4.5
81	100 or more	1	4.4

Example:

Clive Long, who turns 65 on 8 February 2006, invests $100,000 in an allocated pension fund on 1 March 2006. The date of the first payment to Mr Long is 1 April 2006.

2005/06: The maximum and minimum payments for 2005/06 are based on:

(a)

the account balance on the day of purchase; and

(b)

the beneficiary’s age of 65 on the day of purchase:

$Start formula start fraction $100,000 over 9.9 end fraction times start fraction 122 over 365 end fraction equals $3,376.23 (maximum limit, rounded to $3,380) end formula$

$Start formula start fraction $100,000 over 17.3 end fraction times start fraction 122 over 365 end fraction equals $1,932.06 (minimum limit, rounded to $1,930) end formula$

Assume that total payments to Mr Long at 30 June 2006 are $3,000.

2006/07: The maximum and minimum payments for 2006/07 are based on:

(a)

the account balance on 1 July 2006 which is $99,300 (residue $97,000 + earnings of $2,300); and

(b)

the beneficiary’s age of 65 on 1 July 2006:

$Start formula start fraction $99,300 over 9.9 equals $10,030.30 (maximum limit, rounded to $10,030) end formula$

$Start formula start fraction $99,300 over 17.3 end fraction equals $5,739.88 (minimum limit, rounded to $5,740) end formula$

This Act’s bill:Explanatory statement

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