Veterans
8. Taxation of Service Pensions
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Last updated: 27 Aug 2015
- Service pensions generally count towards your taxable income. This means that they must be declared on your personal income tax return.
- There is an exception from this rule for people who receive the pension on grounds of invalidity. In such circumstances the pension will only be taxable after you have reached the eligible age for the social security pension.
- The same rule applies for the partner of an invalidity service pensioner who is in receipt of benefits. On the other hand a partner service pension paid to a former partner is taxable.
- If your pension is taxable you will be supplied with a payment summary towards the end of each financial year.
- It is unlikely that you will be required to lodge a tax return if the pension is your only source of income. The Australian Taxation Office (ATO) will already know the amount paid to you each year as part of your pension. You will still need to declare your other income sources.
- While most service pensions are taxable the following are not:
- pension supplement;
- veterans supplement;
- seniors supplement;
- service pension allowances;
- disability pension and allowances; and
- war widows and widowers' pension.
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