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About Product
The LYD temporary incapacity income stream (TIIS) enables a member to access an income stream equal to the salary or wages they were earning prior to the temporary incapacity from their member's accumulation account. However the amount that may be taken from the member’s account is limited to any employer contributions above the employer SGC contributions. A Trustee may be able to pay a TIIS from earnings of the Fund, any insurance payouts or if there is a reserve in the Fund.
► $129.00 (inc GST) - OR provided under your unlimited membership (exc ASIC fee)
► The master document has been signed off by LY Legal and is congruent with Australian law.
General Information
A TIIS is an income stream that provides salary continuance for employees and the self-employed where they cannot undertake work for a period of time. It is not permanent incapacity and continues until the member goes back to work or self-employment, reaches age 65, retires or becomes permanently incapacitated.
Benefits
- Easy to complete, use and apply.
- It can be for a short term, even a week where a member is off work due to ill-health, including both physical and mental ill health.
- The TIIS does not impact the member’s Pension Transfer Balance.
- The income stream payment is fully assessable to the recipient member.
- The Trustee of the Fund may be entitled to a tax deduction for any temporary incapacity income stream payment and should discuss this with the Fund’s adviser.
- There is no minimum income stream payment as the benefit is not a superannuation benefit.
Frequently Asked Legal Questions
What terms and conditions are available for the temporary incapacity income stream?
The member must be a member of the Fund at the time of commencing the income stream
The member must be engaged in gainful employment (which includes self-employment) and that work has ceased due to ill health, both physical and mental
The TIIS is to cease when the member goes back to work or self-employment, reaches age 65, retires or becomes permanently incapacitated.
The trustee must be careful on where the monies come from in terms of paying the income stream and be mindful of the minimum benefit rules in Part 5 of the SIS Regulations
The amount to be paid can only equal the salary, wages or earnings prior to the temporary incapacity
Any income is to be paid no later than monthly and may be indexed according to the regulations.
When can the TIIS be commenced?
As soon as the member notifies the Trustee that they are off work due to ill health, whether physical or mental.
Can the TIIS be built with a reversion?
No as this income stream is only temporary
What are the taxation consequences?
The TIIS is not a superannuation benefit and is fully assessable in the hands of the recipient under ordinary income principles. The Trustee may be entitled to a partial deduction for any TIIS payments during an income year and advise should be sought in this regard
What if the Member has a salary continuance insurance policy?
The TIIS can be paid alongside any insurance payout to the individual and can be used to ensure that 100% of the member’s salary is provided during the incapacity. Many insurance companies have waiting periods or only pay up to a certain % of the insured’s salary. The TIIS can apply to supplement those payouts or stand alone if there are no payouts.
How long does this document take to assemble?
Depending on the complexity of the data, this document should take approximately 30-50 secs to assemble. If you experience timing outside of this please contact Support via the Surge app, alternatively please read this article for troubleshooting tips https://info.lightyeardocs.com.au/supportcentre/troubleshooting-longer-assembly-times-timeouts .
Is this document a legal document?
All master documents have been signed off by LY Legal lawyers. Tony Anamourlis of LY Legal advises that “at no time, due to inbuilt legal protection and security measures can a user change or amend a document on the LYD platform that has been signed off by a practicing solicitor. To do so would result in the user drafting a document of a legal nature and engaging in the provision of legal services. In addition, it would be a breach of copyright. In our opinion when completing the form fields through the LYD platform, users and their employees are merely carrying out an administrative task which is not the provision of legal advice.”
However in some complex areas such as the insertion of a varied range of client instructions into a Will or other such documents the user must be mindful of the extent to which a document is being drafted by the user rather than merely the administrative task of completing a form where the relevant fields are inserted into the reviewed and signed legal document provided by LY Legal.
The above advice is born out of numerous cases dating back to Re Sanderson, Ex parte Law Institute of Victoria [1927] VLR 394, 397 where the Court held:
“if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”
Likewise in ACCC v Murray (2002) 121 FCR 428, 448 where Murray was building a franchise business that involved the legal writing and drafting of Wills from scratch based on the client’s personal circumstances. The Court held that this process was legal work.
Is the document easy to read?
All LYD products are written in plain English and assessed for readability. If at any time you come across any errors, please contact support@lyd.com.au.
What lawyers sign off on the LYD documents?
All LYD documents are prepared and signed off by LY Legal.
Are the LYD documents reviewed regularly?
All LYD documents form part of the LYD internal review process. We review all documents at least annually or when required to do so due to changes in legislation. Further details of this process and a review schedule is include on this website.
Can I get a sample of this document?
Yes, please email support@lyd.com.au to request a sample document for you to review.