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rx2(I'm new)I'm new
7 Nov 2023

How is tax calculated on a taxable income that falls below the tax free threshold of $18200, when I have a non taxable income, disability support pension, equal to the tax free amount of $18200 ?

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Taxduck(Taxicorn)Taxicorn
7 Nov 2023

Disability Support Pension (DSP) for recipients under age pension age is exempt from tax. On the tax return it is not entered as assessable income but is recorded under the income tests section and can affect certain tax offsets and benefits. The $18200 tax free threshold is for assessable income - wages, taxable government payments, bank interest and so on. So anyone on the DSP under age pension age can do extra work up to $18200 and not pay tax. A bonus for those with a disability.

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
7 Nov 2023

Disability Support Pension (DSP) for recipients under age pension age is exempt from tax. On the tax return it is not entered as assessable income but is recorded under the income tests section and can affect certain tax offsets and benefits. The $18200 tax free threshold is for assessable income - wages, taxable government payments, bank interest and so on. So anyone on the DSP under age pension age can do extra work up to $18200 and not pay tax. A bonus for those with a disability.

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Does a non taxable disability support pension of $18k count towards the $18200 tax free threshold? | ATO Community