Things you need to know
Declare at this question income you receive from Australian annuities and super income streams.
Australian annuities (or non-super annuities) are a series of regular payments you receive from a life insurance company or friendly society in return for a lump sum payment. You can find these payment amounts on your PAYG payment summary – individual non-business.
Australian super income streams (including lump sum payment in arrears amounts) are payments you receive from Australian super funds, retirement savings account (RSA) providers and life insurance companies. You can find these payment amounts on your PAYG payment summary – superannuation income stream.
Super income streams may include:
- account based income streams
- capped defined benefit income streams, that are
- lifetime pensions, regardless of when they start
- lifetime annuities that exist prior to 1 July 2017
- life expectancy pensions and annuities that exist prior to 1 July 2017
- market-linked pensions and annuities that exist prior to 1 July 2017.
If you receive a taxable Australian super lump sum payment, don't include it here – declare it at question 8 Australian superannuation lump sum payments 2025.
You may also be eligible for the following offsets:
- seniors and pensioners tax offset, see question T1 Seniors and pensioners tax offset 2025
- super income stream tax offset, see question T2 Australian superannuation income stream 2025.
If you don't receive Australian annuities or super income streams, go to question 8 Australian superannuation lump sum payments 2025.
What you need to answer this question
For Australian annuities, you'll need all your PAYG payment summary – individual non-business, that show the amount of your annuity and its undeducted purchase price (UPP).
For Australian super income streams, you'll need all your PAYG payment summary – superannuation income streams.
You can use the Defined benefit income cap tool to answer this question.
Answering the parts within this question
This question has 4 parts, however you may not need to complete all 4 parts. The amount you include in your tax return is dependent on the type of super income stream you receive.
Where you receive multiple super income streams, you may need to complete some or all the parts; then add together amounts from different parts, before writing the total in your tax return.
Find out when to complete:
Parts A and B
There are 2 reasons you will need to complete parts A and B:
Reason 1
If you receive:
- a super income stream (including death benefit income streams) – for example an account-based pension and not a capped defined benefit income stream
- an Australian annuity.
Don't show the following tax-free amounts (unless we instruct you otherwise) where you're receiving a super income stream (including death benefit income streams) and one of the following applies:
- you receive a taxed element after your 60th birthday
- you receive a taxed element as the result of the death of another person who was 60 years old or older
- you receive a tax-free component.
Reason 2
If all the following apply:
- you receive a capped defined benefit income stream (including you having a death benefit income stream where the deceased was under 60 years old)
- you're under 60 years old on 30 June 2025.
Parts A and C
Complete parts A and C if all the following apply:
- you receive a capped defined benefit income stream
- you're 60 years old or older on 1 July 2024
- you receive your income stream for all of 2024–25.
Parts A and D
Complete parts A and D if you receive a capped defined benefit income stream, and any of the following apply:
- you turn 60 years old during 2024–25
- you're 60 years old or older on 1 July 2024 and you start an income stream for the first time during 2024–25
- you're under 60 years old on 30 June 2025 and have a death benefit income stream where the deceased was 60 years old or older.
Your payment summary will indicate this as Death benefit (Reversionary income stream).
Additional requirements
You may be eligible for lump sum payment in arrears tax offsets if you receive a super income stream lump sum payment in arrears. If so, you need to provide a Schedule of additional information.
On a separate sheet of paper write:
- the heading Schedule of additional information – question 7
- your name, address and TFN
- the amount of the lump sum payment in arrears for each income year involved.
For example, if you receive $900 in 2024–25 as a lump sum in arrears, where $600 of that lump sum is due for 2022–23 and $300 for 2023–24, write 2022–23 $600 and 2023–24 $300. If you don't have that information, contact the payer of your super income stream.
Attach your schedule of additional information to your tax return.
Print X in the Yes box at Taxpayer's declaration – question 2 in your tax return.
You may also be eligible for an additional tax offset if the following applies:
- you're 60 years old or older when you receive a super income stream payment with an untaxed element (the untaxed element shows on your PAYG payment summary – superannuation income stream)
- your super income stream isn't a capped defined benefit income stream (contact your fund if you don't know).
To claim the additional tax offset, you need to provide the following additional information on a separate sheet of paper:
- write the heading Schedule of additional information – question 7
- write your name, address and TFN
- write the super income stream provider name and the untaxed element amount.
Attach your schedule of additional information to your tax return.
Print X in the Yes box at Taxpayer's declaration – question 2 in your tax return.
Completing your tax return
To complete this question, follow the steps and refer to each PAYG payment summary you receive.
Part A
Add up the tax withheld amounts on your payment summaries and write the total under Tax withheld at question 7.
Part B
If you need to complete part B, follow the steps.
Step 1
Add up the taxed element amounts under the heading 'Taxable component' on all your PAYG payment summary – superannuation income stream.
Write the total at question 7 – label J.
Step 2
Work out the untaxed element amount for label N using the worksheet.
Write the amount from row c of the worksheet at question 7 – label N.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Add the total of your untaxed elements. |
$ |
|
b |
Either:
|
$ |
|
c |
Add the amounts at row a and row b. |
$ |
Step 3
Add up the taxed element amounts under the heading 'Lump sum in arrears – taxable component' on all your PAYG payment summary – superannuation income stream.
Write the total at question 7 – label Y.
Step 4
Add up the untaxed element amounts under the heading 'Lump sum in arrears – taxable component' on all your PAYG payment summary – superannuation income stream.
Write the total at question 7 – label Z.
Part C
Your defined benefit income cap is $118,750 for 2024–25.
Use the tool to help you calculate your assessable income from a capped defined benefit income stream.
Defined benefit income cap toolDon't show amounts at:
- question 7 – label J (taxed element)
- question 7 – label Y (lump sum in arrears taxed element).
We'll take these amounts into consideration when calculating your assessable amount from a capped defined benefit income stream.
Step 1
Work out the amount for label M using the worksheet.
Write the amount from row d at question 7 – label M.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Add the tax-free component plus the taxed element from all your income streams. These amounts are to include lump sum in arrears. |
$ |
|
b |
Your defined benefit income cap. |
$118,750 |
|
c |
Subtract row b amount from row a amount. If the result is less than or equal to $1, write 0 (zero) at row c and row d. |
$ |
|
d |
Divide row c by 2. |
$ |
Step 2
Add up the untaxed elements under the heading 'Taxable component' on all your PAYG payment summary – superannuation income stream.
Write the total at question 7 – label N.
Step 3
Add up the untaxed elements under the heading 'Lump sum in arrears – taxable component' on all your PAYG payment summary – superannuation income stream.
Write the total at question 7 – label Z.
Part D
You may need to reduce your defined benefit income cap of $118,750 for 2024–25.
Use worksheets 3A and 3B, and worksheet 4, to work out the amount of assessable income to include at question 7 – label M.
If you:
- are 60 years old or older on 1 July 2024 and you start a capped defined benefit income stream for the first time during 2024–25, complete worksheet 3A – row a.
- turn 60 years old during 2024–25 and you receive a capped defined benefit income stream during 2024–25, complete worksheet 3A – row b.
- are under 60 years old at any time during 2024–25, and you had a 'reversionary income stream' (a term we use for a capped defined benefit income stream which is a death benefit income stream where the deceased died aged 60 years old or older), complete worksheet 3A – row c.
Step 1
Work out the amount for label M using the worksheets 3A and 3B.
Write the amount from row i at question 7 – label M.
|
Row |
Calculation |
Days |
|---|---|---|
|
a |
Work out the number of days in 2024–25 from when you first start to receive a super income stream to 30 June 2025. |
days |
|
b |
Work out the number of days to 30 June 2025 in 2024–25 from the later of either:
|
days |
|
c |
Work out the number of days in 2024–25 from when you first start to receive a reversionary income stream to 30 June 2025. |
days |
|
d |
From rows a, b and c work out which has the greatest number of days and write at row d. |
days |
|
Row |
Calculation |
Amount |
|---|---|---|
|
e |
Divide the number of days you calculated at worksheet 3A – row d by 365 and multiply by 100. |
days |
|
f |
Multiply row e by $1,000. Round up to the nearest dollar. |
$ |
|
g |
Add the tax-free component plus the taxed element from all your capped defined benefit income streams. These amounts are to include lump sums in arrears. |
$ |
|
h |
Subtract row f amount from row g amount. |
$ |
|
i |
Divide row h by 2. |
$ |
The amount at row i is your assessable amount from your capped defined benefit income stream. Write the amount from row i at question 7 – label M.
Step 2
Add taxed elements from when you're under 60 years old from your capped defined benefit income stream, and write the total at question 7 – label J.
Add lump sum in arrears taxed element amounts from when you're under 60 years old, and write the total at question 7 – label Y.
Add up all your untaxed elements, and write the total at question 7 – label N.
Add up the lump sum in arrears untaxed elements, and write the total at question 7 – label Z.
Don't continue to step 3. You have finished this question, see Where to go next.
Step 3
Complete worksheet 4 only if you:
- complete worksheet 3A – row c
- have a capped defined benefit income stream which isn't a reversionary income stream.
Write the amount from row j at question 7 – label M.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Write the amount from worksheet 3B – row f. |
$ |
|
b |
Add the tax-free component plus the taxed element plus the untaxed element from all your other capped defined benefit income streams from when you're under 60 years old and which aren't reversionary income streams. |
$ |
|
c |
Work out the number of days in 2024–25 you receive your other capped defined benefit income streams when you're under 60 years old and which aren't reversionary income streams. |
days |
|
d |
Work out the number of days in 2024–25 you receive your other capped defined benefit income stream when you're under 60 years old and which aren't reversionary income streams during the same time you're receiving your reversionary income stream. |
days |
|
e |
If row c is equal to row d, write 100% at row e. |
% |
|
f |
Multiply row b by row e. |
$ |
|
g |
Subtract row f from row a. Round up to the nearest dollar. |
$ |
|
h |
Add the tax-free component plus the taxed element from your reversionary income streams and your other capped defined benefit income streams that you receive when you're 60 years old or older. |
$ |
|
i |
If row h is less than row g, write 0 (zero) at row I and j. |
$ |
|
j |
Divide row i by 2. |
$ |
The amount at row j is your assessable amount from your capped defined benefit income stream. Write the amount from row j at question 7 – label M.
Step 4
Add taxed elements from when you're under 60 years old from your capped defined benefit income stream, and write the total at question 7 – label J.
Add lump sum in arrears taxed element amounts from when you're under 60 years old, and write the total at question 7 – label Y.
Add up all your untaxed elements, and write the total at question 7 – label N.
Add up the lump sum in arrears untaxed elements, and write the total at question 7 – label Z.
Where to go next
- Go to question 8 Australian superannuation lump sum payments 2025.
- Return to main menu Individual tax return instructions 2025.
- Go back to question 6 Australian Government pensions and allowances 2025.