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Key Takeaways
- Getting the Age Pension doesn’t automatically mean you skip a tax return; it depends on your income and if Centrelink withheld tax.
- If Centrelink withheld tax from your Age Pension payments, you’ll usually need to lodge a return.
- Other income, like work, investments or super, can also trigger a lodgement obligation based on your “rebate income.”
- Even if you don’t need to lodge, you still need to tell the ATO.
Do pensioners need to lodge a tax return?
Many Australians on the aged pension are unsure about their taxes and what their obligations are once they are no longer working.
Common questions from pensioners include:
- Do people who receive the age pension need to lodge a tax return?
- What should I declare to the ATO?
In this article, we’ll discuss the different circumstances where you may (or may not) need to lodge a tax return this year.
Is the Age Pension taxable income?
Many of our clients ask us: Do I need to lodge a tax return if the only income I receive is the age pension?
The short answer: It depends.
Even if your only source of income is the aged pension then, you may still need to lodge a tax return.
You need to lodge a tax return if:
- Centrelink withheld tax from your Age Pension payment. (You can check this on your income statement or PAYG summary). If Centrelink withheld tax from your payment, you should lodge a tax return.
You do not need to lodge a tax return if:
- Centrelink does not withhold tax from your Age Pension payment, and you have no other income.
“I receive the Age pension, but also receive income from other sources”
If you receive income from other sources such as employment, interest, investments, rental income or fringe benefits, you may need to lodge a tax return.
To determine whether you need to lodge a tax return, you need to determine your ‘rebate income’.
Your ‘rebate income’ is your total taxable income plus the following amounts (if they apply to you):
- Adjusted Fringe Benefits amount
- Reportable Employer Superannuation Contributions
- Deductible Personal Superannuation Contributions
- Your Net Financial Investment Loss
- Your Net Rental Property Loss
If your rebate income is above the following amounts, you must lodge a tax return:
- If you were single, widowed or separated at any time during the year: $52,759
- Combined rebate income if you lived with your spouse for the full year: $87,620
- Combined rebate income if you had a spouse but one of you lived in a nursing home or had to live apart due to illness: $100,104
Everybody must lodge either a tax return or a Non-Lodgement Advice – including you!
If you don’t need to lodge a tax return this year, you still need to tell the ATO.
You can do this by submitting a Non-Lodgement advice. This document notifies the ATO that you don’t need to lodge a tax return this year.
If you prefer, we can lodge one for you. Simply email us at [email protected], and one of our accountants will get back to you.
Please Note: The information in the above blog post is general in nature and should not be relied upon as detailed advice that applies to everyone. Each person’s individual circumstances will decide whether or not they need to lodge a tax return.
Please contact us on [email protected] and one of our accountants can discuss your individual circumstances with you in more detail.
Frequently asked questions
Not always. It depends on whether Centrelink withheld tax from your pension and whether you have income from other sources.
The Age Pension can be taxable income. However, many Age Pension recipients don’t pay tax because of tax offsets, rebates or their overall income level. Whether you need to lodge a tax return depends on your circumstances, including any other income you receive.
Rebate income is your taxable income plus certain other amounts, such as reportable super contributions or fringe benefits. The ATO uses this figure to work out whether you need to lodge a tax return.
The ATO expects one or the other from everyone each year. Skipping both can lead to follow-up letters or penalties, so it’s worth sorting out even if you owe nothing.
Yes. Email [email protected] and one of our accountants can lodge it on your behalf.
Check your income statement or PAYG summary. Any amount listed as tax withheld means you’ll need to lodge a return.
