Adjusted taxable income
A person's adjusted taxable income is the sum of the following amounts:
- taxable income (excluding any assessable First home super saver released amount)
- reportable employer superannuation contributions
- deductible personal superannuation contributions
- adjusted fringe benefits total, which is the sum of:
- reportable fringe benefits amounts received from employers exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986 multiplied by 0.53, and
- reportable fringe benefits amounts from employers not exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986
- certain tax-free government pensions or benefits received by the person
- target foreign income (income and certain other amounts from sources outside Australia not included in your taxable income or received as a fringe benefit)
- net financial investment loss (the amount by which the person's deductions attributable to financial investments exceeded their total financial investment income)
- net rental property loss (the amount by which the person's deductions attributable to rental property exceeded their rental property income)
less
- any child support payments the person provided to another person.
Maintaining a dependant
You maintained a dependant if any of the following applied, you:
- both lived in the same house
- gave them food, clothing and lodging
- helped them to pay for their living, medical and educational costs.
If you had a spouse for the whole of 2019–20 and your spouse worked at any time during the year, we still consider you to have maintained your spouse as a dependant for the whole income year.
We consider you to have maintained a dependant even if the two of you were temporarily separated, for example, due to holidays or overseas travel.
If you maintained a dependant for only part of the year, you may need to adjust your claim accordingly.
Reduced taxable income to take account of certain superannuation lump sums
For Medicare levy purposes, your taxable income excludes the taxed element of a superannuation lump sum (other than of a death benefits superannuation lump sum):
- that you received when you had reached your preservation age and were under 60 years old
- up to your low-rate cap for 2019–20, which is $210,000. If you received superannuation lump sums in previous years, your low-rate cap for 2019–20 could be less than $210,000.
Low-rate cap amount for taxable components of superannuation lump sum payments
This concession applies only to superannuation lump sums paid to you when you have reached your preservation age but before you turn 60 years old.
The low-rate cap amount is the maximum amount of taxable components (taxed and untaxed elements) that can be taxed at a concessional lower rate.
For 2019–20, the low-rate cap amount is a maximum of $210,000, but it could be less for you if before July 2019 you received any superannuation lump sums that counted towards your entitlement to a superannuation lump sum tax offset. The amount is indexed to average weekly ordinary time earnings and rounded down to the nearest multiple of $5,000. See Key superannuation rates and thresholds.
The low-rate cap amount is a 'lifetime' limit. This means that the taxed element and untaxed elements of all superannuation lump sum payments that you receive (as well as the amount of any eligible termination payments for which you became entitled to a rebate before 1 July 2007) when you have reached your preservation age but before you turn 60 years old will be taxed at a concessional rate until your total reaches the low-rate cap amount ($210,000 plus future indexed increases). Payments you receive in excess of the low-rate cap amount will be taxed at the tax rate shown in Table 4 below.
Consequently, for 2019–20 the maximum amount for which you can be taxed at a concessional rate is $210,000 less any amounts to which the concessional tax rate has previously been applied.
See also
Table 4: Superannuation lump sum (other than death benefit)
Element |
Amount |
Tax rate |
|---|---|---|
Tax free component |
Whole |
Tax free |
Taxed element |
Whole |
20% |
Untaxed element |
Up to the untaxed-plan cap amount, $1,515,000 (see Note 1) |
30% |
Untaxed element |
Over the untaxed-plan cap amount, $1,515,000 (see Note 1) |
45% |
Element |
Amount |
Tax rate |
|---|---|---|
Tax free component |
Whole |
Tax free |
Taxed element |
Up to the low rate cap amount, $210,000 (see Note 2) |
Tax free |
Taxed element |
Over the low rate cap amount, $210,000 (see Note 2) |
15% |
Untaxed element |
Up to the low rate cap amount, $210,000 (see Note 2) |
15% |
Untaxed element |
Over the low rate cap amount, $210,000 (see Note 2) and up to the untaxed-plan cap amount, $1,515,000 (see Note 1) |
30% |
Untaxed element |
Over the untaxed-plan cap amount, $1,515,000 (see Note 1) |
45% |
60 years of age or older at the time of payment
Element |
Amount |
Tax rate |
|---|---|---|
Tax free component |
Whole |
Tax free |
Taxed element |
Whole |
Tax free |
Untaxed element |
Up to the untaxed-plan cap amount, $1,515,000 (See Note 1) |
15% |
Untaxed element |
Over the untaxed-plan cap amount, $1,515,000 (see Note 1) |
45% |
Note 1: For 2019–20, the untaxed-plan cap amount is a maximum of $1.515 million, but it could be less for you if you have previously received another superannuation lump sum with an untaxed element from the same superannuation fund. For more information on how we work out your untaxed-plan cap amount, see How tax applies to your super.
Note 2: For 2019–20, the low-rate cap amount is a maximum of $210,000, but it could be less if you received any superannuation lump sums in a prior income year that counted towards your entitlement to a superannuation lump sum tax offset or, if before July 2007, you received an eligible termination payment after your 55th birthday. For more information on how we work out your low-rate cap amount, see How tax applies to your super.
Shared care
You had shared care if you, and your spouse if you had one, cared for your child for some of the income year, and someone else, such as a former spouse, cared for the child for the rest of the income year.
If you received family tax benefit (FTB) Part B as part of a shared-care arrangement, you will need to know your FTB shared-care percentage to calculate your spouse offset. Your FTB shared-care percentage is usually not the same as your ‘shared care percentage’ which appears on correspondence you have received from Services Australia.
If you do not know your FTB shared-care percentage, contact Services Australia on 13 61 50.
Sole care
Sole care means that you alone had full responsibility, on a day-to-day basis, for the upbringing, welfare and maintenance of a child or student. You are not considered to have sole care if you are living with a spouse (married or de facto) unless special circumstances exist. Generally, for special circumstances to exist, you must be financially responsible for the dependent child or student and have sole care without the support that a spouse normally provides.
Situations where special circumstances may arise include the following:
- You were married for some time during 2019–20 but
- during 2019–20, you then separated from, or were deserted by, your spouse, and
- for the remainder of 2019–20, you were not in a de facto relationship.
- Your spouse was in prison for a sentence of 12 months or more.
- Your spouse is medically certified as being permanently mentally incapable of taking part in caring for the child or student.
If you are not sure whether special circumstances apply, phone 13 28 61.
Spouse
Your spouse includes another person (of any sex) who, for 2019–20:
- you were in a relationship with that was registered under a prescribed state or territory law
- although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.