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Changes to your 2018 PAYG pension summary

For the 2017-18 financial year, the Australian Taxation Office (ATO) has made some changes to what is reported on PAYG summaries.

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From 1 July 2017, if you receive income from a capped defined benefit income stream pension, you may have additional tax liabilities from the 2018 income year onwards. This applies if the income from all your capped defined benefit income streams exceed your defined benefit income cap. You will have a defined benefit income cap if you are:

 

  • 60 years of age or older
  • under 60 years of age and in receipt of a death benefit income stream from a person who died aged 60 or over.

For most individuals, the defined benefit income cap will be $100,000 for the 2018 income year. It may be less in some circumstances, including if you turned 60 during the year or you were over 60 and started receiving income from a capped defined benefit income stream for the first time partway through the year. Further information on the cap can be found on the ATO website here: Transfer Balance Cap- Defined Benefit Income Streams

To support the new way the ATO tax defined benefit income, the ATO have made changes to payment summaries.

  • If you turned 60 during the financial year you will receive two payment summaries, one for payments received prior to your 60th birthday, and one for those made after.
  • CSC can no longer pre-populate payment summaries with your tax offset entitlement on an untaxed element. We are unable to determine whether you are in excess of your cap, as we don't know if you have multiple income streams from different providers. You will now need to calculate your tax offset as part of your tax return.

You can use the ATO’s defined benefit income cap tool to calculate:

  • your defined benefit income cap
  • any income which needs to be included in your assessable income and reported at the new label
  • your entitlement to the tax offset.

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