Review of income stream products with a residual capital value 110-02060040

Fixed term income streams commonly pay part of the investment back at the end of the fixed term. There are 2 types of fixed term income streams:

• fixed term pensions
• fixed term annuities

The return of capital to the income stream recipient at the end of the term is known as Residual Capital Value (RCV). This amount will be specified in the contract. Not all fixed term income streams have an RCV. The repayment can be as high as 100% of the original investment or the income stream recipient may choose to have none, that is, 0% of their investment returned at the end of the fixed term.

If the income stream product held by the customer or their partner has an RCV amount greater than zero recorded, a letter is sent to the customer on the expiry of the product term. The letter requests details of what the customer has done with the money received at the end of the term. If the customer invests the money, they are asked to provide details of the new investment. If the customer purchased a new income stream product with the money, they are asked to provide an income stream schedule issued by the product provider. Product details are listed on the letter, including the:

• product type
• product provider name
• product reference number
• RCV amount

The details are based on product information available on the customer's or their partner's Centrelink record.

A Super Term Expired (STX) review is created in Customer First and displays on the Future Activity List (FAL) screen. This review cannot be completed online.

Customers and/or their partners have 21 days from the date of issue of the letter to provide Services Australia with the details. A reminder letter is sent 28 days from the date of issue of the original letter if there has been no response. If the customer or their partner does not respond to the reminder letter within 28 days, their payment will suspend. Their payment will cancel a further 13 weeks from the suspension where there has been no reply or updates made.