Schedule 13 – Tax table for superannuation income streams
For payments made on or after 1 July 2021
This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-80(a) of Schedule 1 to the TAA.
Using this schedule
You should use this table if you make a payment of a super income stream, including:
- account-based super income streams – including death benefit income streams
- capped defined benefit income streams – including death benefit income streams
- transition to retirement income streams
- temporary or permanent disability super income streams.
Super income streams
A super income stream is a series of regular payments from a superannuation provider when the payee has satisfied a condition of release. These regular payments can be paid weekly, fortnightly, monthly, quarterly or annually.
A super income stream may be:
- an account-based super income stream
- a capped defined benefit income stream which includes a
- lifetime pension, regardless of when it started
- lifetime annuity that existed prior to 1 July 2017
- life expectancy pension or annuity that existed prior to 1 July 2017
- market-linked pension or annuity, that existed prior to 1 July 2017
- a reversionary death benefit income stream.
Note: a commutation of an income stream is not a super income stream payment. It is a super lump sum.
Defined benefit income cap
The general defined benefit income cap for the 2021-22 income year is $106,250. The defined benefit income cap may be reduced depending on the payee's circumstances.
Components of a super income stream
Before you can work out the withholding amount, you must calculate the components of the super income stream.
A super income stream may have two components:
- taxable component, which can include either or both of an
- element taxed in the fund (taxed element)
- element untaxed in the fund (untaxed element).
- tax-free component.
Tax file number (TFN) declarations
The answers your payees provide on their Tax file number declaration determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from a payee, it will override the previous one.
If a payee does not give you a valid Tax file number declaration within 14 days of starting a payer/payee relationship, you must complete a Tax file number declaration with all available details of the payee and send it to us.
When a TFN has not been provided
You must withhold 47% for residents, and 45% for foreign residents, if a super income stream payment is made to your payee and they:
- have not quoted their TFN
- have not claimed an exemption from quoting their TFN
- have not advised you they have applied for a TFN, or have made an enquiry with us.
If a payee states at question 1 of the Tax file number declaration that they have lodged a Tax file number application or enquiry for individuals with us, they have 28 days to provide you with their TFN.
If the payee has not given you their TFN within 28 days, you must withhold 47% from any payment you make to a resident payee and 45% from a foreign resident payee from the relevant element(s) of the taxable component of the super income stream payment (ignoring any cents) unless we tell you not to.
Do not allow for any tax offsets, or Medicare levy adjustments. Do not withhold any amount for study and training support loans.
When not to apply the no-TFN withholding rate
Do not apply the no-TFN withholding rate to:
- the tax-free component, or taxed element of a capped defined benefit income stream, where the payee is 60 years old or over and the total of these amounts is below their defined benefit income cap
- the taxed element of an account-based super income stream where the payee is 60 years or over.
In these circumstances no withholding is required.
Heather is 85 and is in receipt of a capped defined benefit income stream from a fully funded defined benefit fund for the full year. Heather's super fund does not have her TFN. As Heather is receiving an income stream from a fully funded defined benefit fund with an annual entitlement of $80,000, her super fund does not apply the no-TFN withholding rate.
End of example
Working out the withholding amount
Factors to consider when working out the withholding amount include:
- whether the payee is an Australian resident or foreign resident for tax purposes
- the age of the payee
- the frequency of the super income stream payments – for example, fortnightly, monthly
- whether the payee is claiming the tax-free threshold
- whether the payee is claiming the seniors and pensioners tax offset
- whether the payee is receiving a disability super income stream
- whether the super income stream includes an untaxed element (generally payments from state and Commonwealth public sector super schemes)
- the type of super income stream
- whether the total of the taxed elements and tax-free component is greater or less than the defined benefit income cap (the cap)
- whether the defined benefit income cap should be reduced
- whether the income stream is a super death benefit income stream.
Payments to Australian residents
This schedule is divided into five parts. The amount required to be withheld from a super income stream depends on the type of super income stream you pay:
- account-based super income stream – use part A
- capped defined benefit income stream and
- payee is under 60 years old at any time during the financial year, including
- disability super income streams
- death benefit (including reversionary) income streams where the deceased was aged less than 60 – use part A
(Note: where the payee turns 60 during the year you will need to complete part E for post 60 income stream payments)
- payee turns 60 years old during the financial year or starts their super income stream part way through the year at age 60 or older – use part E for post 60 income stream payments.
- payee is 60 years old or over for the full financial year
- a taxable component – taxed element and or a tax-free component – use part B
- a taxable component – untaxed element only – use part C
- a mixture of the above components – use part D
- payee is under 60 years old, and is in receipt of a reversionary death benefit income stream and the deceased was 60 years old or older at the time of death – use part E
Payments to foreign residents
If the super income stream is to be made to a foreign resident, you will need to check if there is a tax treaty with their country of residence. If the super income stream is assessable in the other country because of the treaty, no withholding is required.
If a foreign resident's super income stream is assessable in Australia, you are required to withhold from the payment.
Rounding of withholding amounts
Ignore any cents in an income stream before using any of the steps in this schedule to calculate withholding. Withholding amounts calculated using the steps are rounded to the nearest dollar. Results ending in exactly 50 cents are rounded to the next highest dollar. Do this rounding directly – do not make a preliminary rounding to the nearest cent. Where no TFN has been provided, cents are ignored when withholding amounts are calculated.
Last modified: 21 Jun 2021QC 65806