What is adjusted taxable income
We use your adjusted taxable income to work out your eligibility for some payments or services.
Adjusted taxable income may include different types of income:
- taxable income
- foreign income
- tax-exempt foreign income
- total net investment losses
- reportable fringe benefits
- reportable superannuation contributions
- certain tax free pensions or benefits.
It may also include a deemed amount from account based income streams.
If you have a partner, their income can also affect your adjusted taxable income.
Taxable income is your gross income minus allowable deductions. It’s the income you have to pay tax on. It includes income from:
- a business
- any taxable payments you get from us
- any taxable payments you get from the Department of Veterans' Affairs.
Income under the tax free threshold counts as taxable income.
Taxable lump sum payments also count in your taxable income. This may include:
- taxable superannuation death benefits
- taxable compensation payments
- taxable insurance payouts
- superannuation released early.
We won’t count super withdrawals made under the First Home Super Saver Scheme as taxable income.
If you make a loss for the year, your taxable income will be nil. It’s nil when your allowable deductions are more than your gross income.
You might receive some payments from us that aren’t taxable. This means they’re not included as taxable income. Some examples are:
Foreign income is money you get from outside Australia and don't pay Australian income tax on. It can include money from foreign business interests or investments.
Read more about foreign income for family assistance.
Tax-exempt foreign income
Tax-exempt foreign income is income from Australia, earned by:
- members of the armed forces serving overseas
- Australians on overseas projects approved by the Minister for Trade, Tourism and Investment.
Target foreign income
This applies to both Commonwealth Seniors Health Card and Carer Allowance. Target foreign income includes both:
- foreign income you get from outside Australia that you don't pay Australian income tax on
- tax-exempt foreign income from foreign service on an approved project for a continuous period of 91 days or more.
Total net investment losses
Total net investment losses are:
- when your investment expenses are more than the income you get from your investment
- negatively geared investments from rental property or financial investment.
We add both together to come up with your total net investment losses.
A net loss from rental property income
If your mortgage repayments are more than the rental income you get.
A net loss from financial investment
If your costs to purchase an investment are more than the rental income you get from the investment.
Reportable fringe benefits
Reportable fringe benefits are benefits you get from your employer.
They can include:
- help to pay your rent or home loan
- a mobile phone
- a car
- school fees for children
- health insurance premiums
- help with child care expenses.
You need to tell us the total amount of reportable fringe benefits you get from your employer. We’ll assess this as income for family assistance payments. We also assess employer provided fringe benefits in excess of $1000 for Carer Allowance.
You need to tell us even if you get reportable fringe benefits from not for profit employers like:
- public benevolent institutions
- health promotion charities
- some hospitals and public ambulance services.
Your reportable fringe benefits are on your payment summary at the end of the financial year. You can ask your employer to tell you the expected amount for this financial year.
Although they’re not for profit, you’ll need to let us know the full amount you get. We may then only use part of the fringe benefits when we are working out your family assistance payments. If you're not sure if your employer is a not for profit organisation check with your payroll area.
Reportable superannuation contributions
Reportable superannuation contributions is money you salary sacrifice into a superannuation fund. This is on top of the compulsory payments from your employer.
If you're self employed, these are the superannuation payments you make that you claim as a tax deduction.
Tax free pensions or benefits
You might get tax free pensions or benefits from us or the Department of Veterans' Affairs.
These can include non-taxable Centrelink payments such as:
- Disability Support Pension
- Carer Payment when the carer and person they care for are not old enough to get Age Pension.
They can also include non-taxable Department of Veterans’ Affairs payments such as:
- Invalidity Service Pension
- War Widow's and War Widower's Pension
- Partner Service Pension
- Income Support supplement
- Defence Force Income Supplement Allowance (DFISA) (where DFISA is exempt from income tax).
They don’t include:
- Family Tax Benefit Part A and Part B
- Carer Allowance
- Carer Supplement
- Pharmaceutical Allowance
- Rent Assistance
- Remote Area Allowance.
They also don't include:
Read more about tax free pensions or benefits included in your adjusted taxable income. The information is on the Department of Social Services website in the:
State government payments
You may get a payment from a state government. If you do, you may need to include it in your adjustable taxable income. If you’re unsure if you need to, contact the agency that paid you.
Superannuation income stream benefits
These are benefits from a superannuation income stream that are non-assessable non-exempt income.
Child support you pay
If you pay child support, deduct it from your adjusted taxable income for:
- child support we collect
- private maintenance you pay directly to the other parent
non cash maintenance benefits that the child gets, such as school fees, clothes, etc.
It doesn't include spousal maintenance that you pay to a previous partner. Find out more about spousal maintenance on the Family Court of Australia website.
Page last updated: 16 March 2020