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Does income from Super pensions get reported on tax return

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Newbie

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Hi

I'm helping my Mum complete her tax return this year, she is newly retired and has received pension payments from her Super fund.

I noticed the pension payment she received from her Super fund for the year isn't auto populated and she did not receive any type of tax statement from them (Hostplus pensions) either.

Do we need to add this to her tax return? If so, under what category to we add it (income)?

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Hi @fwarren

 

Thanks for your question.

 

@macfanboy is correct. Generally super income streams and lump sums paid by taxed funds to members 60 or more don't need to be taxed or declared on the tax return. For members aged less than 60, super payments are usually still declarable.

 

There are different rules for death benefits and capped defined benefit income streams but from what you have advised, those rules don't appear to apply to your mother's situation.

 

For more information about how super payments are taxed and whether they need to be declared on the tax return, you can check out how tax applies to your super on our website.

 

When super funds make payments (income streams and lump sums) to members, they are required to calculate the following components:

  • tax-free component
  • taxable component - taxed element
  • taxable component - untaxed element

 

Assuming that your mother is receiving an account based income stream due to meeting the retirement condition of release and is aged 60 or more:

  • the tax-free component is tax free and doesn't need to be declared on the tax return
  • the taxable component - taxed element isn't subject to additional tax and doesn't need to be declared on the tax return
  • the taxable component - untaxed element is potentially subject to tax and does need to be declared on the tax return (there is a tax offset that can be claimed)

 

Generally members of taxed funds won't have an untaxed element so if they are aged 60 or more won't receive a payment summary. This is because there is nothing to declare on the tax return. This is likely the case for your mother as you indicated that the payment didn't pre-fill on the online return.

 

If your mother was less than 60 when they received an account based income stream payment, the tax-free component is still tax free but both elements of the taxable component are declarable (there is a tax offset that can potentially be claimed) .

 

If in doubt, get in touch with the super fund to confirm what the components are.

 

Hope this helps.

 

Thanks,

 

ChrisR

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Taxicorn

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Benefits from a taxed super fund (i.e. most super funds) are tax-free if you are over 60 Years.

Therefore do not go into the Tax Return.

 

If you are aged 60 or over, any Lump Sum withdrawals from a taxed super fund are tax-free.

Therefore do not go into the Tax Return.

 

Different rates may apply to untaxed funds, such as government super funds.

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ATO Certified Response

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Hi @fwarren

 

Thanks for your question.

 

@macfanboy is correct. Generally super income streams and lump sums paid by taxed funds to members 60 or more don't need to be taxed or declared on the tax return. For members aged less than 60, super payments are usually still declarable.

 

There are different rules for death benefits and capped defined benefit income streams but from what you have advised, those rules don't appear to apply to your mother's situation.

 

For more information about how super payments are taxed and whether they need to be declared on the tax return, you can check out how tax applies to your super on our website.

 

When super funds make payments (income streams and lump sums) to members, they are required to calculate the following components:

  • tax-free component
  • taxable component - taxed element
  • taxable component - untaxed element

 

Assuming that your mother is receiving an account based income stream due to meeting the retirement condition of release and is aged 60 or more:

  • the tax-free component is tax free and doesn't need to be declared on the tax return
  • the taxable component - taxed element isn't subject to additional tax and doesn't need to be declared on the tax return
  • the taxable component - untaxed element is potentially subject to tax and does need to be declared on the tax return (there is a tax offset that can be claimed)

 

Generally members of taxed funds won't have an untaxed element so if they are aged 60 or more won't receive a payment summary. This is because there is nothing to declare on the tax return. This is likely the case for your mother as you indicated that the payment didn't pre-fill on the online return.

 

If your mother was less than 60 when they received an account based income stream payment, the tax-free component is still tax free but both elements of the taxable component are declarable (there is a tax offset that can potentially be claimed) .

 

If in doubt, get in touch with the super fund to confirm what the components are.

 

Hope this helps.

 

Thanks,

 

ChrisR