Government Pension Tax Offset – What It Means for You

What’s the Government Pension Tax Offset?

It’s a tax offset that reduces how much tax you pay on certain Australian Government pensions and allowances. In some cases, it can wipe out your tax bill completely.

Who Can Claim It?

You can claim it if you receive an eligible taxable pension, such as:

• Age Pension (Centrelink or DVA)

• Carer Payment (not Carer Allowance)

• Disability Support Pension (if you’re of Age Pension age)

• Wife Pension

• Widow B Pension

• Parenting Payment (single)

• Special Needs Disability Support Pension (if of Age Pension age)

• Some DVA Service Pensions and Income Support Supplements

Requirements:

• You must be an Australian resident for tax purposes

• The pension must be taxable

How Much Is the Offset?

For 2023–24:

• Singles: up to $2,230

• Each member of a couple: up to $1,602

The offset reduces as your taxable income increases.

✅ If your only income is the pension, you’ll usually pay no tax.

What If My Pension Is Tax-Free?

Some pensions (like DSP if you’re under Age Pension age) are tax-free. In that case:

• You don’t get the offset

• But you still declare the income in your tax return (to help with other benefits or offsets)

How Do You Claim It?

Easy — the ATO usually calculates the offset automatically when you:

1. Lodge your tax return

2. Declare your taxable pension income

If you have other income (e.g. part-time work or investments), the offset reduces the tax on that income.

Derek’s FAQ – Real Questions, Real Fast

Q: I get the Age Pension and some bank interest. Will I pay tax?
A: Probably not. The offset often covers both your pension and a bit of extra income.

Q: I get DSP and I’m under Age Pension age. Do I get this offset?
A: Nope — your DSP is tax-free, so no offset for you.

Q: Do I need to apply?
A: Nah. Just declare your pension — the ATO takes care of the rest.

Bottom line:
If you’re receiving a taxable pension, you may qualify for the Government Pension Offset — and that could mean zero tax. Just lodge your return, report your pension, and let the ATO crunch the numbers.

Let GoTax Help You Get It Right

GoTax Online makes lodging simple. We’ll help you enter the right info, check your pension type, and make sure you don’t miss a cent of your offset.

Start your return now: www.gotax.com.au/guest-user

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