Key factors that affect how your super payout is taxed

I'm under my preservation age and will be paid a pension or income stream (taxed element)

How will the taxed element of my super income stream be taxed?

If you:

are below your preservation age, and
receive a super income stream (pension or annuity) that includes or consists entirely of a taxed element

the taxed element:

is included in your assessable income
subject to tax at your marginal tax rates (plus Medicare levy).

You pay:

tax at your marginal rates (plus Medicare levy).

In 2011-12, the flood levy may apply to this payment, where an individual's taxable income exceeds $50,000. We have published information to help you work out if the flood levy applies to you.

No tax offset generally applies unless the payout is a disability super benefit, in which case you are entitled to a tax offset equal to 15% of the taxed element.

This applies to the taxable component of any super income streams, including those started before 1 July 2007.

Example 2

George is 53 and receives his income stream super benefit as an annual payment of $18,000 on 30 July 2011. His super fund tells him that this amount completely consists of a taxed element.

George will include $18,000 taxed element in his assessable income and pay the following tax:

Taxed element: $18,000

taxed at marginal rates (plus Medicare levy), with no tax offset as George is under 55 and it is not a disability super benefit

In 2011-12, the flood levy may apply to this payment, where an individual's taxable income exceeds $50,000. We have published information to help you work out if the flood levy applies to you.

How do I fill in my tax return?

Sections within How the taxed element of your payout is taxed

Last Modified: Friday, 28 September 2012