Some Centrelink payments form part of the recipient’s taxable income. These include:
• ABSTUDY Living Allowance, if the person is over 16 years old;
• Age Pension;
• Austudy Allowance;
• Bereveament Allowance and the Bereveament Lump-sum Benefit;
• Carer Payment, if the carer or person being cared for is of Age Penion age;
• Dad and Partner Pay;
• Disability Support Pension, if the person is of Age Pension age;
• Education Entry Payment;
• Newstart Allowance;
• Parental Leave Pay;
• Parenting Payment;
• Partner Allowance;
• Pension Supplement (basic amount);
• Sickness Allowance;
• Special Benefit;
• Widow Pension and Widow Allowance;
• Wife Pension, if the person or their parter is of Age Pension age; and
• Youth Allowance, if the person is over 16 years old.
FTB(A), FTB(B) and Rent Assistance are generally not included in taxable income.
Although some pension payments are included in taxable income, a special income tax offset for beneficiaries ensures that people whose only income comes from certain qualifying social security payments and allowances pay no income tax. A special income tax offset for seniors and pensioners reduces the chance of a person paying income tax who only receives benefits, unless they have income in addition to the benefit.
More information is available from the Australian Taxation Office (ATO) (www.ato.gov.au).
Advice from a lawyer or accountant should be obtained on this complex area if any problems arise.