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  • Super pensions, annuities and government payments

    You must declare income you received from pensions paid to you as a superannuation income stream, annuities and some government payments.

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    A pension is a series of regular payments made as a super income stream (this does not include government payments such as the age pension).

    These payments may be provided:

    • by an Australian super fund, life assurance company or retirement savings account (RSA) provider
    • by a fund established for the benefit of Commonwealth, state or territory employees and their dependants (such as the Commonwealth Superannuation Scheme and the Public Sector Superannuation Scheme)
    • as a result of another person's death (death benefit income stream).

    What you need to declare

    Your super income stream payments will have different items. Depending on your age and the type of income stream you receive, you may need to declare the following items in your tax return when calculating your assessable income:

    • a taxed element – the part of your benefit on which tax has already been paid in the fund
    • an untaxed element – the part of your benefit that is still taxable because tax has not been paid in the fund
    • a tax-free component – the part of the super benefit that is tax-free.

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    An annuity is usually a series of regular payments to you by a life insurance company in return for a lump sum payment.

    Most annuities have both taxable and tax-free components.

    Your assessable income will include your taxable annuity payments when received. This includes annuities received by you as a reversionary beneficiary.

    Government payments

    You must declare Australian Government payments such as the age pension, carer payments, Austudy, JobSeeker Payment, Newstart and Youth Allowance on your tax return.

    Some government payments are exempt from income tax but you still need to declare them in your tax return. This information is used to work out whether you are eligible to receive a range of government benefits and tax offsets.

    These payments include:

    • carer payment under Part 2.5 of the Social Security Act 1991 (this is not the carer allowance under Part 2.19 of the Social Security Act 1991)
    • disability support pension paid by Centrelink to a person who is under age-pension age
    • invalidity service pension where the veteran is under age-pension age
    • partner service pension where either  
      • the partner and the veteran are under the age-pension age and the veteran is receiving an invalidity service pension
      • the partner is under age-pension age, the veteran has died and was receiving an invalidity service pension at the time of death

    For more information on the exempt payments you need to include in your tax return see tax free government pensions or benefits in Special circumstances and glossary.

    See also:

    Last modified: 18 Mar 2020QC 31969