Super pensions
A super pension is a series of regular payments made as a super income stream. This doesn't include government payments such as the age pension.
You may receive these payments:
- from an Australian super fund, life assurance company or retirement savings account (RSA) provider
- from a fund established for the benefit of Commonwealth, state or territory employees and their dependants, such as
- the Commonwealth Superannuation Scheme
- the Public Sector Superannuation Scheme
- as a result of another person's death (death benefit income stream).
Depending on your age and the type of income stream you receive, you may need to declare different items in your tax return. This includes:
- 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 your benefit that is tax-free.
Your PAYG payment summary – superannuation income stream from your super fund will show the amount you need to declare in your tax return. We pre-fill the amounts from your payment summary when you prepare and lodge you tax return online.
You may be entitled to an Australian super income stream tax offset. Your PAYG payment summary – superannuation income stream may show the amount of tax offset you can receive on your taxed element.
To work out how your super pension will be taxed, you need to know How tax applies to your super.
If you are receiving an income stream, you should check with your superannuation fund to work out if it is a capped defined benefit income stream.
Annuities
An annuity is usually a series of regular payments made to you by a life insurance company or friendly society 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 you receive the payment. This includes annuities you receive as a reversionary beneficiary.
A reversionary beneficiary is the person a super fund member nominates to automatically receive an income stream on the death of a member.
Your PAYG payment summary – individual non-business will show the annuity amounts you need to declare in your tax return.
Find out about declaring income in your tax return from superannuation pensions or annuities.