What is adjusted taxable income

We use your adjusted taxable income to assess your eligibility for some payments, supplements, support and benefits.

What we use as adjusted taxable income

Adjusted taxable income is what we use to work out your eligibility for some payments or services. It includes different types of income, for example:

  • taxable income
  • foreign income
  • tax-exempt foreign income
  • total net investment losses
  • reportable fringe benefits
  • reportable superannuation contributions
  • certain tax free pensions or benefits, and
  • superannuation income stream benefits, including both taxable and non-taxable components

If you have a partner, their income can also affect your adjusted taxable income.

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:

  • wages
  • a business
  • investments
  • any taxable payments you get from us, and
  • any taxable payments you get from the Department of Veterans' Affairs

Income under the tax free threshold counts as taxable income.

Any taxable lump sum payments also count in your taxable income. This may include:

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

Foreign income is money received from outside Australia and don't pay Australian income tax. It can include money from foreign business interests or investments. 

Read more about foreign income for family assistance purposes.

Tax-exempt foreign income

Tax-exempt foreign income is income from Australia, earned:

  • overseas in foreign service, or
  • on an approved project for at least 91 days

It's exempt from Australian tax.

For example, this can include income earned by:

  • members of the armed forces serving overseas, or
  • Australians on overseas projects approved by the Minister for Trade, Tourism and Investment 

Total net investment losses

Investment losses are when your expenses are more than your income from the investment.

We look at 2 types:

  • net losses from rental property income 
  • net losses from financial investment income 

We add both together to come up with your total net investment losses. These investments are also called negatively geared.

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 repayments on money lent to purchase an investment are more than the income you get from the investment.  

Reportable fringe benefits

Reportable fringe benefits or employer provided 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.

You need to tell us if you get reportable fringe benefits from:

  • public benevolent institutions
  • health promotion charities
  • some hospitals and public ambulance services

Although they’re not for profit, you’ll need to let us know the full amount you get. We’ll reduce the amount we assess as income for family assistance payments. If you're not sure if your employer is a not for profit organisation check with your payroll area.

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.

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 payments such as:

They don’t include:

Read more about which tax free pensions or benefits are included in your adjusted taxable income. The information is on the Department of Social Services website:

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, we’ll deduct it from your adjusted taxable income for:

  • family assistance payments, and
  • low income supplements

This includes:

  • child support we collect
  • private maintenance, and
  • non-cash maintenance

It doesn't include spousal maintenance.

How we use adjusted taxable income

What we use to work out your adjusted taxable income depends on what you claim. For example, the types of income we use for child support is different to what we use for family assistance.

For some payments, we’ll deduct any child support you pay from your adjusted taxable income.

Family assistance payments

We'll use your adjusted taxable income to work out if your can receive:

The types of income we look at are:

  • taxable income
  • reportable fringe benefits
  • reportable superannuation contributions
  • total net investment losses
  • certain tax free pensions and benefits
  • foreign income, and
  • tax-exempt foreign income

We’ll deduct any child support you pay from your adjusted taxable income for family assistance.

Child support

We’ll use your adjusted taxable income to work out your child support payments. The types of income we look at are:

  • taxable income
  • reportable fringe benefits
  • reportable superannuation contributions
  • total net investment losses
  • certain tax free pensions and benefits, and
  • target foreign income

We’ll use your adjusted taxable income for the last relevant year, not the current year. Read more about how your income affects your child support.

Commonwealth Seniors Health Card

We’ll use your adjusted taxable income to work out if you can receive a Commonwealth Seniors Health Card. The types of income we’ll look at are:

  • taxable income
  • target foreign income
  • total net investment losses
  • employer provided benefits, and
  • reportable superannuation contributions

We’ll add deemed income from account-based income streams to your adjusted taxable income.

Page last updated: 6 June 2018