If you get a Centrelink payment from us, you may need to lodge a tax return. If you get a Centrelink payment from us, or pay or receive Child Support, you should check if you need to lodge a tax return. If you're registered to pay or receive child support, you need to lodge a tax return.
If your income is over $18200 you will have to lodge a return, however there are tax offsets available which could mean you still don't have tax to pay. The offsets are non refundable, which means they can only lower your tax payable to zero. Please use the links provided for further assistance.
When you don't need to lodge. You usually don't need to lodge a tax return where: your income is under the tax-free threshold ($18,200)
Tax Returns for Aged Pensioners
If your only source of income is the aged pension, it is compulsory for you to lodge a tax return each year. This applies is Centrelink is withholding tax from the aged pension. This information will be included in your PAYG summary, indicating the amount of tax withheld.
You might not need to lodge a tax return.
Good news! If you earned less than $18,200 AND you didn't pay any tax on this income, then you probably won't need to lodge a tax return this year.
You can choose to claim or not claim the tax-free threshold on the tax file number (TFN) declaration you give to your payer (including Centrelink). If you choose to do so: you will not pay tax where your income is under $18,200. your payer will withhold tax when you earn above $18,200.
Prosecution action
If you don't work with us to address your overdue lodgment, we can make the decision to prosecute you through the relevant court of your state or territory. This action will include a summons to attend court.
Centrelink is withholding any tax from your age pension payment. If Centrelink does withhold tax from your age pension payment; this will be noted on your income statement or PAYG summary. If there is any amount of tax withheld listed on your income statement, then you should lodge a tax return.
Currently, a pensioner can only earn up to $240 per week before they lose the pension by 50 cents in the dollar. That means they can only really work one day a week before getting penalised (depending on their remuneration). If they earn more than about $33,000 per year—which includes their pension—they also get taxed.
You can advise us of a non-lodgement after the end of each financial year. It's best to wait until mid-July to tell us. This is so we have time to get any pre-filled income information.
You can be fined
You may also have to pay interest on any amount you owe. It is best to lodge on time even if you can't pay the amount you owe. You can usually arrange a payment plan. A late payment is better than a late lodgment.
Even after years it will demand that you lodge your tax return, which may result in fines, penalties, interest, prosecution or even jail time.
JobSeeker Payment is a taxable Centrelink payment. You can ask us to deduct tax from your payment. This can help reduce the amount of tax you may have to pay at the end of the tax year. JobSeeker Payment may affect the amount of child support you pay or receive.
You must tell us about any lump sum you get, even if you think it's exempt from the income test. You also need to tell us about any changes to your assets. If you don't tell us, we may overpay you. If this happens you'll have to pay us back.
We pass approximately 100,000 records to Centrelink each week. Around 12% of these are found to be Centrelink clients. ATO data is provided under table item 1 in table 1 in section 355-65 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
We may apply a penalty for failure to lodge on time if your tax return is not lodged by the due date. Generally, we apply one penalty unit for every 28 days (or part thereof) that your tax return is overdue, to a maximum of 5 penalty units.
The Government has provided two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. These payments will support households to manage the economic impact of the Coronavirus.
The Work Bonus therefore allows a single pensioner to earn up to $504 per fortnight ($300 work related income + $204 of other assessable income) and still receive the full Age Pension.
On 1 December 2022, a one-off $4,000 income credit was added to the Work Bonus income bank of those at least pension age and in receipt of an Age Pension, Disability Support Pension, Carer Payment or certain Veterans entitlement. Prior to 1 December 2022, the Work Bonus income bank was capped at $7,800.
Exempt income includes: certain Australian Government pensions, such as the. disability support pension paid by Centrelink to a person who is under age-pension age. invalidity service pension paid under the Veterans' Entitlements Act 1986 where the veteran is under age-pension age.