Changes to Income Tax Thresholds 2020-21

Here's how recent Government changes impact your pension

28 Oct 2020

The Government recently announced changes as part of the 2020-21 Federal Budget. One of these changes is to personal income tax thresholds for the 2020-21 financial year. These changes apply from 1 July 2020, but are unable to be backdated to payments already made.

Employers and other payers must implement these changes by 16 November 2020. We’ve implemented these changes to apply from payday 5 November 2020. Due to the small timeframe, any payment letters issued before 22 October 2020 may show the old tax rates.

 

Frequently Asked Questions

Is my pension impacted by the changes?

Our pensions are taxed in-line with the ATO PAYG tax tables, so if your pension is in a threshold for a reduced rate of tax, your pension will be impacted.

Will you amend tax already paid this financial year?

No, any additional tax withheld will be refunded by the ATO after you complete your 2020-21 financial year tax assessment.

Will I pay less tax?

Possibly. Depending on a number of factors, your tax rate may not change.

  • If you’re eligible for a lower rate of tax, we’ll automatically apply this change for payday 5 November 2020.
  • If you’ve previously chosen to pay a set amount of tax, you’ll continue to pay this amount if it’s higher than your rate because of these changes.

We recommend you refer to the ATO website for more information if you’re unsure.

Does tax on superannuation lump sums change?

No changes have been announced to superannuation lump sum tax rates.

Can I elect to pay tax at the higher rate?

Yes. If these changes mean you will have less tax withheld from your pension, and you want to keep paying tax at a higher rate, you can email your request to pensions@csc.gov.au. Include your full name (including any middle names), date of birth and pension reference number. Otherwise, give us a call.

How will I know what my new entitlements are?

We’ll write to you if you’re impacted, or you can view the details on your Pensioner Services Online (PSO) account.

Will you report any changes through to Services Australia (Centrelink) or DVA?

No, we only report gross amounts to these departments.

How will the budget affect contributing or preserved members?

There are no changes for contributing or preserved members. Depending on your individual circumstances you may be affected by other measures. You can find more information at budget.gov.au.

It was announced that members will keep their super fund when they change jobs – what does this mean for me?

There are no changes to your membership with CSC. If you’re changing jobs and are unsure about your eligibility to contribute, please visit csc.gov.au/changingjobs or get in contact with us.

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