Commonwealth Consolidated Regulations Commonwealth Consolidated Regulations(1) This regulation applies in relation to the following:
(a) a contract mentioned in paragraph 1.05(1)(e), (1A)(f) or (1B)(c) for a benefit (the annuity );
(b) a contract mentioned in paragraph 1.05(1A)(g) for a benefit that is an annuity under sub - subparagraph 1.05(1A)(g)(i)(B) (the annuity );
(c) rules of a superannuation fund mentioned in paragraph 1.06(1)(c), (1A)(d) or (1B)(c) for a benefit (the pension ).
(2) For this regulation, other than for subregulation (5), the payment year for an annuity or pension means the period of 12 months that begins on the day after:
(a) the commencement day; or
(b) the anniversary of the commencement day.
(3) The contract or rules, meet the standards of this regulation if the contract or rules ensure that the annuity or pension cannot be commuted, in whole or in part, unless:
(a) the commutation results from the death of an annuitant or pensioner or a reversionary annuitant or reversionary pensioner; or
(b) the sole purpose of the commutation is:
(i) to pay a superannuation contributions surcharge; or
(ii) to give effect to an entitlement of a non - member spouse under a payment split; or
(iii) to meet the rights of a client to return a financial product under Division 5 of Part 7.9 of the Corporations Act 2001 ; or
(iv) to comply with section 136 - 80 in Schedule 1 to the Taxation Administration Act 1953 ; or
(c) the annuity or pension has paid, in the payment year in which the commutation is to take place, at least the minimum amount under subregulation (4).
(4) For paragraph (3)(c), the minimum amount is calculated using the formula:
where:
"Days in payment period" means:
(a) the number of days in the period that:
(i) begins on:
(A) the day after the anniversary of the commencement day that occurs before the day on which the commutation is to take place; or
(B) if the annuity or pension commenced on the day before the start of the payment year in which the commutation is to take place--the day after the commencement day; and
(ii) ends on the day on which the commutation is to take place; or
(b) if subregulation (5) applies--1 day.
"Days in payment year" means the number of days in the payment year in which the commutation is to take place (365 or 366).
"Minimum annual amount" means:
(a) for an annuity mentioned in paragraph (1)(b)--the minimum amount that the annuity would pay as fixed - size payments in the payment year if the annuity were not commuted; and
(b) otherwise--the minimum amount that the annuity or pension would pay in the payment year if the annuity or pension were not commuted.
(5) If the commencement day for an annuity or a pension is the day on which the commutation of the annuity or pension is to take place:
(a) the payment year is taken to commence on the commencement day and end on the day before the anniversary of the commencement day; and
(b) there is taken to be 1 day in the payment period.
(6) If, to calculate the minimum annual amount, it is necessary to use a future unknown value of the CPI, that value is taken to be equal to the CPI for the last known quarter.