Loading
Dannf123(I'm new)I'm new
2 June 2025

Hi

My wife is collecting a pension from her superannuation fund, pays about 15% tax on this income as she is over 60yo, I am retired and have no income at all.

She sold an investment property last financial year and had a capitol gain of about $90,000 our tax agent added this gain to her pension income and calculated the amount of tax at the highest taxation rate. I was wondering why all of a sudden she had to pay the higher tax rate on here super pension, it meant she had a tax bill about $16000 more than we expected. When we queried the Tax Agent, they said that's the way it is done.

Is this correct or has the tax agent made a mistake


Thanks for reading and hopefully you can clarify this for us.

730 views
4 replies
730 views
4 replies

All replies

Taxduck(Taxicorn)Taxicorn
2 June 2025

If this income stream is a taxable component with an untaxed element then this would be correct. This type of pension (from a defined benefit scheme) is taxed at normal marginal rates. See how super is taxed.

Tax on super benefits | Australian Taxation Office

Capital gains are included in the tax return as assessable income so would be added to the pension. Final taxable income would be taxed at normal marginal rates.

NikkiATO(Community Moderator)Community Moderator
2 June 2025

Hi @Dannf123,


If your wife’s super pension includes an untaxed element (common in some defined benefit funds), then it’s taxed at her marginal tax rate, even if she’s over 60. That’s likely why she’s paying tax on the pension income.


Also, the capital gain from the property sale is added to her other income (like the pension) when working out her total taxable income. That can push her into a higher tax bracket, which may explain the larger tax bill.


Check out our website for more info on tax on super benefits.

Dannf123(I'm new)I'm new
2 June 2025

My wife's super pension is a Capped Defined Benefit Income Stream and when she turned 60 she got a letter from the super company stating that the PAYG tax withheld from your pension has decreased as you are eligible for the age 60 tax offset.


Thanks Dann

KaraATO(Community Support)Community Support
4 June 2025

Hi @Dannf123,


Even though your wife qualifies for the age 60 tax offset, they might still pay tax on their Capped Defined Benefit Income Stream if their pension exceeds the defined benefit income cap.


Here is some info on defined benefit income cap tool.


As you mentioned that your wife now has PAYG tax withheld, I'd recommend seeing a local tax agent, as they can help clarify the tax treatment and ensure they’re claiming any available deductions or offsets.

Featured articles

Renting out all or part of your home? What to include in your tax return

15 Apr 2026 · 4 min read time

How to work out your tax residency

15 Apr 2026 · 8 min read time

Top liked users

  1. Taxduck

    (Taxicorn)

    1272 likes

  2. Bruce4Tax

    (Taxicorn)

    1115 likes

  3. YellowPotato

    (Taxicorn)

    338 likes

  4. Ken_Oath

    (Master)

    199 likes

  5. knaresbro

    (Devotee)

    141 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    3395contributions

  2. Taxduck

    (Taxicorn)

    2812contributions

  3. YellowPotato

    (Taxicorn)

    883contributions

  4. knaresbro

    (Devotee)

    295contributions

  5. TobyJDodd

    (Devotee)

    176contributions

Loading
Super pension and capital gains | ATO Community