What is the Savings Provision Entitlement?
The Savings Provision Entitlement ensures that people remaining on a membership that have been receiving a higher age rebate do not have their age rebate reduced when the member aged 65+ years leaves or cancels the membership (although income levels do need to be considered).
How does the Savings Provision Entitlement work?
When the member of 65+ years leaves or cancels the original policy (due to death, divorce or separation), the Savings Provision Entitlement is triggered.
As a result, the remaining members on the policy (at the time), other than dependents, will continue to receive the higher rebate, even if they transfer to a single policy or a different fund.
If a member aged 64 or less leaves the policy before the member aged 65+ does, then the Savings Provisions Entitlement will not be triggered and the person leaving the policy will have their rebate calculated based on their own details.
How do I lose the Savings Provision Entitlement?
If a policy is receiving the higher rebate as a result of a Savings Provision Entitlement, the Savings Provision Entitlement will be lost when another person, other than a dependent, is added to this policy. The rebate entitlement for the policy will be recalculated based on the age of the oldest person on the policy and the couple's combined income.
When does the Savings Provision Entitlement not apply?
A dependent is not entitled to take the Savings Provision Entitlement with them. This means if they take out their own policy, their rebate will be calculated based on their own age and income. If their policy includes their partner, then the rebate will be calculated based on their combined income and the age of the oldest person on the policy.