Commonwealth Seniors Health Card

Paying tax on your payment

You may have to pay tax on your payments.

You can choose to pay tax on your payment if you get a taxable Centrelink payment.

We don’t automatically take tax from most of our taxable payments. But you can ask us to do this for you. We call this a tax deduction.

There’s a tool to work out the amount of tax that we should deduct from your payment. Use the Australian Taxation Office tax withheld for individuals calculator tool on their website.

If we deduct tax from your payment, you must lodge a tax return with the ATO.

Payment summary

If you ask us to deduct tax from your payment, you can see it on your payment summary.

Your payment summary shows:

  • the total payment amounts you got from us for the financial year
  • any tax we deducted from these payments

Deducting tax from your payment

You can ask us to make regular tax deductions from taxable Centrelink payments.

This means you pay tax in smaller amounts throughout the year. If you do this you won’t have a large lump sum after the end of the financial year.

You can do this when you submit a claim for payment. You just need to make sure you tick the option to have tax taken out of your payment.

You can choose for us to deduct the tax as a:

  • percentage of your total taxable payments, or
  • dollar amount

We apply a 15% tax deduction automatically when we approve you for:

If you don’t want to pay this, you can ask us to change it at any time.

Set up a tax deduction

How you set up a tax deductions depends on the payment you get.

If you get this payment Where to set up your tax deduction
  • ABSTUDY - Living allowance for students and Australian Apprentices if you’re 16 years or older
  • Age Pension
  • Austudy
  • Bereavement Allowance
  • Carer Payment – if you or the care receiver is of age pension age
  • Newstart Allowance
  • Parenting Payment
  • Partner Allowance
  • Sickness Allowance
  • Special Benefit
  • Widow Allowance
  • Wife Pension – if you or your partner is of age pension age
  • Youth Allowance – if you’re 16 years or older

Set up your tax deduction:

  • Disability Support Pension – if you’re age pension age

Set up your tax deduction:

  • Disaster Recovery Allowance
  • Ex-gratia Income Support Allowance – where the payment has been deemed taxable
  • Farm Household Allowance
  • Income Recovery Subsidy
  • Widow B Pension

Set up your tax deduction at a service centre

  • Parental Leave Pay – Department of Human Services delivered payment only
  • Dad and Partner Pay

Set up automatically during your claim process. You can make changes:

Sometimes you’ll get payments added onto your main Centrelink payment. The following add on payments count towards the total amount that we use to deduct your tax:

  • Additional Assistance - regular
  • Basic Pension Supplement
  • Bereavement lump sum above the tax exempt amount
  • Green Army Supplement
  • Living Allowance, Term or School Boarder
  • National Work Experience Programme
  • PaTH Internship Incentive
  • Remote Jobs and Communities Programme Supplement
  • School Fees Allowance Group 2 or Board
  • Work for the Dole

Manage your tax deduction

You can set up, change or cease your tax deduction at any time. You can do this depending on the type of payment you get.

Use our online guide to help you manage tax deductions with your Centrelink online account.

You can also fill in the Tax Deduction Authority form for any main payment. When you’ve filled it in, take it to a service centre.

More information

Read more about personal taxation advice on the ATO website.

Page last updated: 20 July 2018