What adjusted taxable income is

We use your adjusted taxable income to work out your eligibility for some payments, concessions 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 adjusted taxable income can also affect your payment.

Taxable income

This applies to family assistance payments, Carer Allowance and the Commonwealth Seniors Health Card.

Taxable income is your gross income minus allowable deductions. It’s the income you have to pay tax on. It includes income from any of these:

  • wages and salary which is your normal weekly, fortnightly or monthly pay
  • irregular, occasional or casual work
  • temporary work
  • bonuses and overtime
  • business income
  • dividends and investments
  • bank interest
  • capital gains, such as profit from the sale of shares or property
  • some scholarships
  • any taxable payments you get from us
  • any taxable payments you get from the Department of Veterans’ Affairs (DVA)
  • taxable COVID-19 payments you got, including Pandemic Leave Disaster Payment and High-Risk Settings Pandemic Payment.

Income under the tax-free threshold also counts as taxable income.

Taxable lump sum payments also count in your taxable income. These may include any of these:

We won’t count superannuation withdrawals made under the First Home Super Saver Scheme as taxable income.

Your taxable income may be zero if your allowable deductions are more than your gross income. You can find out more about gross income and allowable deductions on the Australian Taxation Office (ATO) website.

You might get some payments from us that aren’t taxable. This means they’re not included as taxable income. Some examples are:

You should check with the Australian Taxation Office if you are unsure about what income is included as taxable income.

Target foreign income

This applies to family assistance payments, Carer Allowance and the Commonwealth Seniors Health Card and includes both:

  • foreign income
  • tax-exempt foreign income.

Foreign income

Foreign income is money you get from outside Australia and don’t pay Australian income tax on. It includes all of the following:

  • foreign business interests
  • investments
  • regular money from relatives
  • foreign pensions
  • income you earned overseas.

Read more about foreign income for family assistance.

Tax-exempt foreign income

Tax-exempt foreign income is income from Australia, earned if you are either:

  • a member of the armed forces serving overseas
  • an Australian on overseas projects approved by the Minister for Trade, Tourism and Investment.

Total net investment losses

This applies to family assistance payments, Carer Allowance and the Commonwealth Seniors Health Card.

Total net investment losses are any of these:

  • 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.

Examples

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 income you get from the investment.

Reportable fringe benefits

This applies to family assistance payments, Carer Allowance and the Commonwealth Seniors Health Card.

Reportable fringe benefits are provided by your employer and are a non-cash benefit you might get. They can also be known as a salary sacrifice. They can include payment of any of these:

  • your rent or home loan
  • a mobile phone
  • a car, including zero or low emissions vehicles
  • school fees for children
  • health insurance premiums
  • child care expenses.

We need to know if you get any exempt reportable fringe benefits and any other reportable fringe benefits.

Exempt reportable fringe benefits are benefits you may get if your employer is a not-for-profit organisation and eligible for a fringe benefit tax exemption

Other reportable fringe benefits which you would get from all other types of employers.

You need to tell us the gross amount of all 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 and the Commonwealth Seniors Health Card.

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 gross amount for this financial year. If you’re not sure if your employer is a not-for-profit organisation, check with your payroll area.

Reportable superannuation contributions

This applies to family assistance payments, Carer Allowance and the Commonwealth Seniors Health Card.

A reportable superannuation contribution is a personal contribution you make or is made on your behalf to a super fund. You will claim it as an income tax deduction when you lodge your tax return. This is on top of the compulsory payments from your employer. You can find more information about personal deductible super contributions on the ATO website.

Tax free pensions or benefits

This applies to family assistance payments and Carer Allowance.

You might get tax free pensions or benefits from us or the DVA.

These can include non-taxable Centrelink payments such as:

They can also include non-taxable DVA payments such as any of these:

  • Invalidity Service Pension
  • War Widow’s and War Widower’s Pension
  • Partner Service Pension
  • Income Support Supplement
  • Defence Force Income Supplement Allowance (DFISA) where it’s exempt from income tax
  • those under the Military Rehabilitation and Compensation Act, including arrears and lump sums from Wholly Dependent Partner payments.

Read more about getting a Department of Veterans’ Affairs (DVA) payment.

They don’t include any of these payments:

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 or territory government payments

You may get a payment from a state or territory government. If you do, you may need to include it in your adjusted taxable income. If you’re unsure if you need to, contact the agency that paid you.

Account-based income stream benefits

This applies to Carer Allowance and the Commonwealth Seniors Health Card.

We use deeming rules to work out income from your financial assets. Deeming applies to account-based income streams if you or your partner are 60 years of age or older.

Read more information about deeming and how we calculate it.

Child support you pay

This applies if you get any of these payments:

If you pay child support, you can deduct the amount you pay when working out your adjusted taxable income.

Child support you pay can include all of these:

  • child support we collect on your behalf, through your Child Support assessment
  • 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: 30 April 2024.
QC 29571