Income tax

 

Some pensions and allowances form part of the recipient’s taxable income. However, most supplement payments do not.

Pensions

Some pension payments form part of the pensioner’s taxable income. These are:

Age Pension;

Disability Support Pension paid to a man over 65 and a woman over Age Pension age;

Widow Pension;

Wife Pension – if over Age Pension age or if husband over 65;

Carer Payment if carer or person being cared for is of Age Pension age; and

Parenting Payment.

Most supplements are not included in taxable income, along with:

Disability Support Pension if under Age Pension age;

Wife Pension if both under Age Pension age;

Carer Payment if both under Age Pension age;

Crisis Payment; and

Double Orphan Pension.

Although some pension payments are included in taxable income, a special income tax rebate for pensioners ensures that people whose only income comes from social security pensions will pay no income tax.

More information is available from the Australian Taxation Office (ATO). Again, advice from a lawyer or accountant should be obtained on this complex area if any problems arise.

Allowances

Special Benefit, Sickness Allowance, Youth Allowance and Newstart Allowance paid to a person and their spouse form part of their taxable income.

FTB(A) and (B) and Rent Assistance are not included in taxable income.

A special income tax rebate for beneficiaries reduces the chance of a beneficiary paying income tax unless they have income in addition to the benefit. More information is available from the ATO. Advice from a lawyer or accountant should be obtained on this complex area, if any problems arise.