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_martey(Newbie)Newbie
18 June 2021

I receive a PSS pension which is 100% of my income. I understand that there are taxable (taxed and untaxed sources), tax free components and tax offsets including that because I'm over 60 I also receive a 10% tax offset on the taxable component.

I attempted to replicate my tax return for last year, but was unable to find the relevant offsets in the ATO online calculator, so ended up with a tax estimate far greater than I actually paid last year (in fact I got a refund). How are these offsets and tax free components reflected in the ATO's system and how is my Medicare levy incorporated into the tax I pay from my pension?

see this info sheet for tax treatment of PSS pension

https://www.csc.gov.au/-/media/Files/PSS/Factsheets/PSF27-tax-and-your-pss-pension.pdf

11,935 views
5 replies
11,935 views
5 replies

Most helpful response

Most helpful reply

Glenn4802(Devotee)Devotee
18 June 2021

Unless the component of the pension from a taxed source exceeds $100,000, this amount will not be subject to tax.

You will pay tax and Medicare on the 'taxable untaxed' component of your pension. You are entitled to a non-refundable tax offset of up to 10% of that component.

If your total pension for the year, including the elements you don't pay tax on, is higher than $100,000 you will only get the 10% rebate on part of the 'taxable untaxed' component.

Medicare is only payable on the amount of your pension that is taxable income.

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Tax treatment of PSS pension for over 60s | ATO Community