You might have received amounts that you do not need to include as income on your tax return. We classify them into three different categories:
- exempt income
- non-assessable non-exempt income
- some other amounts that are not taxable and do not affect any calculation on your tax return.
The most common types of exempt and non-assessable non-exempt income are listed below. If you are not sure whether a payment you have received is exempt income, non-assessable non-exempt income or is another type of amount that is not taxable, phone 13 28 61.
Exempt income
Exempt Australian Government pensions, allowances and payments
- Carer adjustment payment (CAP)
- Carer payment where
- both the carer and the care receivers are under age-pension age, or
- the carer is under age-pension age and any of the care receivers has died
- Defence Force income support allowance (DFISA) payable to you on a day when the whole of your social security pension or benefit, which is also payable to you on that day, is exempt from income tax under section 52-10 of the Income Tax Assessment Act 1997
- Disability support pension paid by Centrelink to a person who is under age-pension age
- Double orphan pension
- Invalidity service pension paid under the Veterans' Entitlements Act 1986 where the veteran is under age-pension age
- Partner service pension where either
- the partner (excluding the non-illness separated spouse of a veteran) and the veteran are under age-pension age and the veteran receives an invalidity service pension, or
- the partner is under age-pension age and the veteran has died and was receiving an invalidity service pension at the time of death
- Veterans' Affairs disability pension and allowances, war widows and war widowers pension
- Wife pension where both the recipient and their partner are under age-pension age, or the recipient is under age-pension age and their partner has died
Lump sum bereavement payments received as part of any of the payments in the previous list are exempt only up to the tax-free amount. Phone 13 28 61 to find out how much of your payment is exempt.
Exempt Australian Government education payments
- Allowances for students under 16 years old, including those allowances paid under ABSTUDY, the Assistance for Isolated Children Scheme and the Veterans' Children Education Scheme
- Australian-American Educational Foundation (Fulbright Commission) grant
- Commonwealth scholarships or bursaries provided to foreign students
- Commonwealth secondary education assistance
- Endeavour awards research fellowships or an Endeavour Executive Award
- Language, literacy and numeracy supplement
- Payments under the Military Rehabilitation and Compensation Act Education and Training Scheme for eligible young persons whose eligibility was determined under
- paragraph 258(1)(a) of the Military Rehabilitation and Compensation Act 2004 and the eligible young person was under 16 years old, or
- paragraph 258(1)(b) of the Military Rehabilitation and Compensation Act 2004
- Pensioner education supplement and fares allowance paid by Centrelink
- Rent assistance paid to Austudy recipients
- Some scholarships and bursaries received by full-time students
- Supplementary allowances for students paid under the Assistance for Isolated Children Scheme
- The first $1,000 of an apprenticeship early completion bonus provided under a specified state or territory scheme for occupations with skill shortages
Other exempt Australian Government payments
- Amounts you received directly, or which are paid to a person on your behalf, under the National Disability Insurance Scheme for approved reasonable and necessary supports funded under your plan
- Australian Government disaster recovery payments
- Back to school bonus and single income family bonus paid under the A New Tax System (Family Assistance) (Administration) Act 1999
- Carer allowance paid under the Social Security Act 1991
- Child care benefit
- Child care rebate
- Child disability assistance under Part 2.19AA of the Social Security Act 1991
- DFISA bonus and DFISA bonus bereavement payment under Part VIIAB of the Veterans' Entitlements Act 1986
- Economic security strategy payment to families under the A New Tax System (Family Assistance)(Administration) Act 1999 or under the scheme determined under Schedule 4 to the Social Security and Other Legislation Amendment (Economic Security Strategy) Act 2008
- Economic security strategy payment under the Social Security Act 1991 or the Veterans' Entitlements Act 1986 or under the scheme determined under Schedule 4 to the Social Security and Other Legislation Amendment (Economic Security Strategy) Act 2008
- Education entry payment supplement under the Social Security Act 1991
- Energy supplement paid under the Social Security Act 1991 or the Veterans' Entitlements Act 1986
- Family tax benefit
- Household Assistance Package payments which include
- Clean Energy Advance
- Energy Supplement payments
- Essential Medical Equipment payment
- Low Income Supplement
- Single Income Family Supplement
- Income support bonus under the scheme determined under section 258 of the Military Rehabilitation and Compensation Act 2004
- Income support bonus under the scheme prepared under Part VII of the Veterans' Entitlements Act 1986
- Income support bonus under the Social Security Act 1991
- Job commitment bonus paid under the Social Security Act 1991
- Loss of earnings allowance paid under the Veterans' Entitlements Act 1986
- Lump sum payment made under section 198N of the Veterans' Entitlements Act 1986
- Mobility allowance paid under the Social Security Act 1991
- Outer Regional and Remote (OR&R) payment made under the Better Start for Children with Disability initiative
- Outer Regional and Remote (OR&R) payment made under the Helping Children with Autism package
- Payment from the Thalidomide Australia Fixed Trust
- Payments to carers under the scheme determined under Schedule 4 to the Social Security and Veterans' Entitlements Legislation Amendment (One-off Payments and Other Budget Measures) Act 2008
- Payments under the scheme determined under Schedule 4 to the Household Stimulus Package Act (No 2) 2009
- Pension bonus and pension bonus bereavement payments under Part 2.2A of the Social Security Act 1991 or Part IIIAB of the Veterans' Entitlements Act 1986
- Pharmaceutical allowances paid under the Social Security Act 1991
- Phone allowance paid under the Social Security Act 1991
- Prisoner of War Recognition Supplement payment under Part VIB of the Veterans' Entitlements Act 1986
- Quarterly pension supplement paid under the Social Security Act 1991 or the Veterans' Entitlements Act 1986
- Remote area allowance
- Rent assistance
- Schoolkids Bonus
- Stillborn baby payment paid by Centrelink
- The ex-gratia payment from the Australian Government, known as assistance for New Zealand non-protected special category visa holders, for a disaster
- that occurred in Australia during 2012-13, and
- that the Emergency Management Minister has declared to be a major disaster for the purposes of the Australian Government Disaster Recovery Payment
- The ex-gratia payment from the Australian Government, known as the Disaster Income Recovery Subsidy, for a disaster occurring during the period starting on 3 January 2013 and ending on 30 September 2013
- The ex-gratia payment from the Australian Government, known as the Disaster Recovery Allowance for special category visa (subclass 444) holders for a disaster
- that occurred in Australia during 2014-15 and future years, and
- for which a determination under section 1061L of the Social Security Act 1991 has been made
- Tobacco industry exit grant where you complied with the condition of the grant not to own or operate any agricultural business within five years after receiving the grant
- Training and learning bonus under the Social Security Act 1991
- Utilities allowance paid under the Social Security Act 1991
- Veterans supplement paid under the Veterans' Entitlements Act 1986
Exempt Australian Defence Force and United Nations payments
- Certain pay and allowances for Australian Defence Force personnel (your employer will advise you if an amount is exempt)
- Compensation payments for impairment or incapacity resulting from service with a United Nations armed force
- Compensation payments made under the Military Rehabilitation and Compensation Act 2004, except those that are income-related payments
- F-111 deseal/reseal ex-gratia lump sum payments
- Pay and allowances for part-time service in the Australian Naval, Army or Air Force Reserve
- Payments under the Defence Abuse Reparation Scheme
- Some allowances paid to Australian Defence Force personnel who served in prescribed overseas areas (your employer will advise you if an allowance is exempt)
Other exempt payments
- Certain amounts of interest paid by the Commonwealth on unclaimed money and property
- Certain annuities and lump sums which are paid to an injured person under a structured settlement
- Certain distributions from a pooled development fund
- Certain distributions from an early stage venture capital limited partnership
- Certain payments relating to persecution during the Second World War
- Certain profits or gains from disposal of shares in a pooled development fund
- Japanese internment compensation payments made under the Compensation (Japanese Internment) Act 2001 or the Veterans' Entitlements Act 1986
- Your share of certain profits or gains arising from disposal of investments by a venture capital limited partnership (VCLP), an early stage venture capital limited partnership (ESVCLP) or an Australian venture capital fund of funds (AFOF)
Non-assessable non-exempt income
The most common types of non-assessable non-exempt income are:
- a superannuation lump sum death benefit received by
- a dependant, or
- someone who is not a dependant but received the benefit because of the death of a member of the Australian Defence Force or an Australian police force (including Australian Protective Services) who died in the line of duty
- a tax-free superannuation lump sum benefit paid to a person with a terminal medical condition existing at the time when the lump sum was received or within 90 days after its receipt
- amounts on which family trust distribution tax has been paid (see question A5 in Individual tax return instructions supplement 2017)
- genuine redundancy payments and early retirement scheme payments shown as ‘Lump sum D’ amounts on your payment summary
- government super contributions
- National Rental Affordability Scheme payments or non-cash benefits paid (whether directly or indirectly, such as through an NRAS consortium of which you are a member) by a state or territory government or a relevant body established under a state or territory law
- that part of the taxable component of a death benefit ETP below the 2016–17 cap of $195,000 paid to a dependant
- the taxed element of a death benefit superannuation income stream paid to a death benefit dependant where
- the deceased was 60 years old or older at the time of their death, or
- the recipient was 60 years old or older when they received the benefit
- the taxed element of a superannuation income stream or lump sum received by a person 60 years old or older
- the tax-free component of a superannuation benefit
- the tax-free component of an employment termination payment (ETP)
Tax-free income for temporary residents
If you are a temporary resident your foreign income is non-assessable non-exempt income, except income you earn from your employment overseas while you are a temporary resident.
You are a temporary resident if:
- you hold a temporary visa granted under the Migration Act 1958
- you are not an Australian resident within the meaning of the Social Security Act 1991, and
- your spouse (if you have one) is not an Australian resident within the meaning of the Social Security Act 1991.
If, at any time on or after 6 April 2006, you have been an Australian resident for tax purposes but not a temporary resident, you will not be entitled to the temporary resident exemptions from that time, even if you later held a temporary visa.
See also:
Other amounts that you do not pay tax on
You do not pay tax on most child support and spouse maintenance payments.
Provides information about those amounts that you do not pay tax on.