When to declare taxable and tax-free government payments, pensions and allowances in your tax return.
What are government payments, pensions and allowances?
Australian Government payments, pensions and allowances are income amounts that you receive from a government agency. Commonly these payments are from Services Australia or the Department of Veteran’s affairs (DVA).
Depending on the payment type you receive, these payments might be either:
- taxable – meaning you pay tax on the amounts and must declare the income in your tax return
- tax-free – meaning you don’t pay tax on the amounts, but you may need to declare them in your tax return so we can work out your eligibility for tax offsets and other benefits.
If you are unsure of the type of payment you receive, contact the government agency to check.
If you lodge your tax return online the ATO pre-fill most of these payments, pensions and allowances in your tax return. You will need to check the pre-fill information and manually include any amounts that have not pre-filled in your tax return.
For instructions on how to complete government payments, pensions and allowances in your tax return, see Lodgment options for preparing your tax return.
Taxable pensions, payments and allowances
You must include taxable Australian Government pensions, payments and allowances in your tax return.
Taxable government payments, pensions and allowances include:
- age pension
- carer payment
- Austudy payment
- Commonwealth Prac Payment (CPP) – available from 1 July 2025
- JobSeeker payment
- Youth allowance
- veteran payment
- invalidity service pension, if you are age-pension age or over
- disability support pension, if you are age-pension age or over
- income support supplement
- parenting payment (partnered)
- disaster recovery allowance.
This is not an exhaustive list, for a full list of Australian Government payments, pensions and allowances, see:
Tax-free government pensions or benefits
Some Australian Government payments are tax-free but you still need to declare them in your tax return. The ATO use this information to work out if you are eligible for tax offsets and any government benefits or concessions.
Tax-free Australian Government pensions or benefits include:
- carer payment where either:
- both the carer and the care receiver are under age-pension age
- the carer is under age-pension age and any of the care receivers has died.
- disability support pension paid by Centrelink, if you are under age-pension age
- invalidity service pension, if the veteran is under age-pension age
- partner service pension where either
- the partner and the veteran are under the age-pension age and the veteran is receiving an invalidity service pension
- the partner is under age-pension age, the veteran has died and was receiving an invalidity service pension at the time of death.
Lump sum bereavement payments you receive are exempt only up to the tax-free amount.
This is not an exhaustive list, for a full list of tax-free Australian Government pensions and benefits, see Tax-free government pensions or benefits.
Government payments and stimulus during difficult times
During difficult times such as natural disasters, the federal, state or territory governments may provide support payments or grants.
If you received a payment because you were impacted by a disaster, find out if the payment is taxable and whether to include it in your tax return in Government disaster recovery payments.
Source: ato.gov.au June 2025
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/government-payments-and-allowances.
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