Things you need to know
Declare at this question income you received from Australian annuities and superannuation income streams.
Australian annuities (also called non-superannuation annuities) are paid to you by Australian life insurance companies and friendly societies. You can find these payment amounts on your PAYG payment summary – individual non-business.
Australian superannuation income streams (including lump sum in arrears amounts) are paid to you by Australian superannuation funds, retirement savings account (RSA) providers and or life insurance companies. You can find these payment amounts on your PAYG payment summary – superannuation income stream and may include:
- account based income streams
- capped defined benefit income streams that are
- lifetime pensions, regardless of when they started
- lifetime annuities that existed prior to 1 July 2017
- life expectancy pensions and annuities that existed prior to 1 July 2017
- market-linked pensions and annuities that existed prior to 1 July 2017.
If you received a taxable Australian superannuation lump sum payment, do not include it here – declare it at question 8 Australian superannuation lump sum payments 2023.
You may also be eligible for the following offsets:
- seniors and pensioners tax offset, see question T1 Seniors and pensioners tax offset 2023
- superannuation income stream tax offset, see question T2 Australian superannuation income stream 2023.
Did you receive Australian annuities or superannuation income streams?
|
No |
Go to question 8 Australian superannuation lump sum payments 2023, or return to the main menu Individual tax return instructions 2023. |
|
Yes |
Use the Defined benefit income cap tool to answer this question or read on. |
What you need to answer this question
For Australian annuities, you need all your PAYG payment summary – individual non-business that show the amount of your annuity and its undeducted purchase price (UPP)
For Australian superannuation income streams, you need all your PAYG payment summary – superannuation income streams.
Answering the parts within this question
This question is divided into 4 parts. You may not need to complete all 4 parts. The amount to be included in your income tax return is dependent on the type of superannuation income stream you receive.
The parts that you complete are based on the superannuation income stream you received. Where you received multiple superannuation income streams, you may complete some or all of the parts; and add together amounts from different parts, before writing the total in your tax return.
Find out when to complete:
Parts A and B
There are 2 reasons you will need to complete parts A and B:
Reason 1
If you received:
- a superannuation income stream (including death benefit income streams) – for example an account-based pension and not a capped defined benefit income stream that is covered below
- an Australian annuity.
Do not show the following tax-free amounts (unless instructed otherwise) where you are receiving a superannuation income stream (including death benefit income streams) and:
- you received a taxed element after your 60th birthday
- you received a taxed element paid to you as the result of the death of another person who was 60 years old or older, or
- you received a tax-free component.
Reason 2
If all of the following apply:
- you received a capped defined benefit income stream (including you having a death benefit income stream where the deceased was under 60 years old)
- you were under 60 years old on 30 June 2023.
Parts A and C
Complete parts A and C if all of the following apply:
- you received a capped defined benefit income stream
- you were 60 years old or older on 1 July 2022
- you received your income stream for all of 2022–23.
Parts A and D
Complete parts A and D if you received a capped defined benefit income stream, and any of the following apply:
- you turned 60 years old during 2022–23
- you were 60 years old or older on 1 July 2022 and you started an income stream for the first time during 2022–23
- you were under 60 years old on 30 June 2023 and have a death benefit income stream where the deceased was 60 years old or older.
This will be indicated on your payment summary as Death benefit (Reversionary income stream).
Additional requirements
You may be entitled to a tax offset if you received a superannuation income stream lump sum in arrears. If so, you need to provide additional information.
On a separate sheet of paper:
- print Schedule of additional information – question 7
- print your name, address and tax file number
- write the amount of the payment in arrears for each income year involved.
For example, if you received $900 in 2022–23 as a lump sum in arrears, where $600 of that lump sum is due for 2020–21 and $300 for 2021–22, write 2020–21 $600 and 2021–22 $300. If you do not have that information, contact the payer of your superannuation income stream.
Attach your schedule of additional information to page 3 of your tax return.
Print X in the Yes box at Taxpayer's declaration question 2 on page 10 of your tax return.
You may also be eligible for an additional tax offset if:
- you were 60 years old or older when you received a superannuation income stream payment with an untaxed element (the untaxed element is shown on your PAYG payment summary – superannuation income stream), and
- your superannuation income stream was not a capped defined benefit income stream (contact your fund if you don't know).
To claim that additional tax offset, you need to provide the following additional information:
On a separate sheet of paper:
- print Schedule of additional information – question 7
- print your name, address and tax file number
- write the superannuation income stream provider name and the untaxed element amount.
Attach your schedule of additional information to page 3 of your tax return.
Print X in the Yes box at Taxpayer's declaration question 2 on page 10 of your tax return.
Completing your tax return
To complete this question, follow the steps below:
Part A
Add up the tax withheld amounts on your payment summaries.
Write the total under Tax withheld at the left column of question 7.
Part B
Step 1
Add up the taxed element amounts that appear on all your PAYG payment summary – superannuation income stream under the heading Taxable component.
Write the total at question 7 – label J.
Step 2
Work out the amount for label N using the worksheet.
Write the amount from row c of the worksheet at question 7 – label N.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Add the total of your untaxed elements. |
$ |
|
b |
Write 0 if you did not receive any Australian annuities |
$ |
|
c |
Add row a and row b. |
$ |
Step 3
Add up the taxed element amounts that appear on all your PAYG payment summary – superannuation income stream under the heading Lump sum in arrears – taxable component.
Write the total at question 7 – label Y.
Step 4
Add up the untaxed element amounts that appear on all your PAYG payment summary – superannuation income stream under the heading Lump sum in arrears – taxable component.
Write the total at question 7 – label Z.
Part C
Your defined benefit income cap is $106,250 for 2022–23.
Use the Defined benefit income cap tool to help you calculate your assessable income from a capped defined benefit income stream.
Defined benefit income cap toolDo not show amounts at:
- question 7 – label J (taxed element)
- question 7 – label Y (lump sum in arrears taxed element).
We will take these amounts into consideration when calculating your assessable amount from a capped defined benefit income stream.
Step 1
Work out the amount for label M using the worksheet.
Write the amount from row d at question 7 – label M.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Add the tax-free component plus the taxed element from all your income streams. These amounts are to include lump sum in arrears. |
$ |
|
b |
Your defined benefit income cap |
$106,250 |
|
c |
Subtract row b amount from row a amount. If the result is less than or equal to $1, write 0 at row c and row d. |
$ |
|
d |
Divide row c by 2. |
$ |
The amount at row d is your assessable amount from your capped defined benefit income stream.
Step 2
Add up the untaxed elements that appear on all your PAYG payment summary – superannuation income stream under the heading Taxable component.
Write the total at question 7 – label N.
Step 3
Add up the untaxed elements that appear on all your PAYG payment summary – superannuation income stream under the heading Lump sum in arrears – taxable component.
Write the total at question 7 – label Z.
Part D – Reduction of your defined benefit income cap
Your defined benefit income cap of $106,250 for 2022–23 may be reduced.
Use worksheets 3A and 3B, and worksheet 4 if required, to work out the amount of assessable income to be included at question 7 – label M, based on your defined benefit income cap.
If you:
- were 60 years old or older on 1 July 2022 and you started a capped defined benefit income stream for the first time during 2022–23 – complete row a in worksheet 3A.
- turned 60 years old during 2022–23 and you received a capped defined benefit income stream during 2022–23 – complete row b in worksheet 3A.
- were under 60 years old at any time during 2022–23, and you had a 'reversionary income stream' (a term we use for a capped defined benefit income stream which is a death benefit income stream where the deceased died aged 60 years old or older) – complete row c in worksheet 3A.
Step 1
Work out the amount for label M using the worksheets 3A and 3B.
Write the amount from row i at question 7 – label M.
|
Row |
Calculation |
Days |
|---|---|---|
|
a |
Work out the number of days in 2022–23 from when you first started to receive a superannuation income stream to 30 June 2023. |
days |
|
b |
Work out the number of days in 2022–23 from the later of:
to 30 June 2023. |
days |
|
c |
Work out the number of days in 2022–23 from when you first started to receive a reversionary income stream to 30 June 2023. |
days |
|
d |
From rows a, b and c work out which has the greatest number of days and write at row d. |
days |
|
Row |
Calculation |
Amount |
|---|---|---|
|
e |
Divide the number of days you calculated at row d in worksheet 3A by 365 and multiply by 100. |
days |
|
f |
Multiply row e by $1,000. Round up to the nearest dollar. |
$ |
|
g |
Add the tax-free component plus the taxed element from all your capped defined benefit income streams. These amounts are to include lump sums in arrears. Only include the amounts received after you were 60 years old or older, and the amounts, if any, you received from a reversionary income stream as defined above. |
$ |
|
h |
Subtract row f amount from row g amount. |
$ |
|
i |
Divide row h by 2. |
$ |
The amount at row i is your assessable amount from your capped defined benefit income stream.
Step 2
Add taxed elements you received when you were under 60 years old from your capped defined benefit income stream, and write the total at question 7 – label J.
Add lump sum in arrears taxed element amounts you received when you were under 60 years old, and write the total at question 7 – label Y.
Add up all your untaxed elements, and write the total at question 7 – label N.
Add up the lump sum in arrears untaxed elements, and write the total at question 7 – label Z.
Do not continue to step 3. You have now finished this question, see Where to go next.
Step 3
Complete worksheet 4 only if:
- you completed row c in worksheet 3A
- you have a capped defined benefit income stream which is not a reversionary income stream.
Write the amount from row j at question 7 – label M.
|
Row |
Calculation |
Amount |
|---|---|---|
|
a |
Write the amount from row f in worksheet 3B. |
$ |
|
b |
Add the tax-free component plus the taxed element plus the untaxed element from all your other capped defined benefit income streams which you received when you were under 60 years old and which were not reversionary income streams. |
$ |
|
c |
Work out the number of days in 2022–23 you received your other capped defined benefit income streams when you were under 60 years old and which were not reversionary income streams. |
days |
|
d |
Work out the number of days in 2022–23 you received your other capped defined benefit income stream when you were under 60 years old and which were not reversionary income streams during the same time you were receiving your reversionary income stream. |
days |
|
e |
If row c is equal to row d, write 100% at row e. |
% |
|
f |
Multiply row b by row e. |
$ |
|
g |
Subtract row f from row a. Round up to the nearest dollar. |
$ |
|
h |
Add the tax-free component plus the taxed element from your reversionary income streams and your other capped defined benefit income streams that you received when you were 60 years old or older. |
$ |
|
i |
If row h is less than row g write 0 at row i and j. |
$ |
|
j |
Divide row i by 2. |
$ |
The amount at row j is your assessable amount from your capped defined benefit income stream.
Step 4
Add taxed elements you received when you were under 60 years old from your capped defined benefit income stream, and write the total at question 7 – label J.
Add lump sum in arrears taxed element amounts you received when you were under 60 years old, and write the total at question 7 – label Y.
Add up all your untaxed elements, and write the total at question 7 – label N.
Add up the lump sum in arrears untaxed elements, and write the total at question 7 – label Z.
Where to go next
- Go to question 8 Australian superannuation lump sum payments 2023.
- Return to main menu Individual tax return instructions 2023.
- Go back to question 6 Australian Government pensions and allowances 2023.