Annuities and Super Income Streams – What to Declare and How
What’s an Annuity or Super Income Stream?
These are retirement income products — a way to turn your super or savings into regular payments:
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Annuity: A product you buy (with your super or savings) that pays you a guaranteed income for a set period or life.
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Super Income Stream: Regular payments from your super fund, usually once you’ve reached preservation age. These include account-based pensions and transition-to-retirement income streams (TRIS).
How Are They Taxed?
Super Income Streams
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Aged 60 or over: Most payments are tax-free if they come from a taxed super fund.
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Under 60: Part of your payment may be taxable, depending on your age and fund type. Your payment summary will show the split.
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Untaxed funds: Even if you’re over 60, you may pay tax on payments from some government or “untaxed” super funds.
Annuities
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Income is split into:
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Taxable component: Taxed at your marginal rate. You may get a tax offset if over 60.
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Tax-free component: No tax to pay.
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Your provider gives you a PAYG summary showing what to declare.
What Do You Declare on Your Tax Return?
Super Income Stream
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Declare the taxable portion as shown on your payment summary.
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Most of this gets pre-filled if you lodge online.
Annuity Payments
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Declare the taxable portion as shown on your PAYG summary.
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If you’re a reversionary beneficiary (getting payments after someone passes away), you still need to declare it.
What About Tax Offsets?
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Under 60? You may be eligible for a 15% tax offset on the taxable part.
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Over 60? Most payments are tax-free. If you are taxed (e.g. from untaxed sources), you may be eligible for a 10% tax offset.
What Records Should You Keep?
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PAYG payment summaries from your super fund or annuity provider
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Details of any lump sum withdrawals
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Copies of your super fund or annuity contracts
Hold these for at least five years.
Gotax Online FAQ – Real Questions, Real Fast
Q: I’m over 60 and get a super pension. Do I pay tax?
A: Not usually — most super pensions from taxed funds are tax-free. But untaxed funds may still be taxable.
Q: I’m under 60. How is my super income stream taxed?
A: The taxable part is included in your return. You might get a 15% tax offset.
Q: What about annuities?
A: The taxable component is taxed at your marginal rate. If you’re over 60, a 10% tax offset may apply.
Q: Do I declare the tax-free part?
A: No — but you still report the total payment so the ATO sees the breakdown.
Q: I’m a reversionary beneficiary. Do I declare the income?
A: Yes. The income is yours to declare from the date you start receiving it.
Q: Can I take my super as a lump sum instead?
A: You can. But lump sum payments have different tax rules. Income streams are for ongoing, regular payments.
Bottom line:
If you receive payments from a super pension or annuity, check your payment summary and declare the taxable part. Over 60? You’re likely tax-free (unless it's an untaxed fund). Under 60? There may be tax, but also offsets. Stay organised, and ask Derek below if you need help.
Let GoTax Handle It For You
GoTax Online makes declaring annuity and super income stream payments easy. Just follow the prompts, and we’ll make sure your income and offsets land where they belong.
Simple. Fast. Done right.
Start your return now: www.gotax.com.au/guest-user
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