Tax treatment of income stream member benefits

Age	Tax free component	Taxable component
Age	Tax free component	Element taxed	Untaxed element
Under preservation age	Non-assessable non-exempt income	Marginal tax rate*	Marginal tax rate*
Preservation age to 59	Non-assessable non-exempt income	Marginal tax rate* less 15% tax offset	Marginal tax rate*
60 and over	Non-assessable non-exempt income	Non-assessable non-exempt income	Marginal tax rate* less 10% tax offset
*Plus Medicare levy.

Taxpayer	Tax treatment
Under 60, no DTA	If no DTA exists between Australia and the taxpayer’s country of residence, the pension income (excluding tax free component) is included in the taxpayer’s Australian assessable income and taxed at non-resident tax rates Recipients aged between preservation age and age 60, will generally be eligible for a 15% tax offset on the taxable component If the taxpayer has not quoted their TFN, the tax on the taxable component of the pension income will be withheld at the highest MTR* The pension income may also be subject to tax in the country of residence, depending on the arrangements that exist in that country.
Under 60, DTA	If the individual resides in a country with which Australia has a DTA, the pension income will usually be subject to the tax arrangements that exist in their country of residence. (Relevant provisions of DTA should be checked as this is not always the case). If pension income is to be taxed in the individual’s country of residence, withholding obligations will not apply in Australia.
Over 60, all	The superannuation pension income is non-assessable non-exempt (if paid from a taxed source). No withholding obligation exists within Australia (regardless of whether TFN is quoted). The taxpayer may be subject to tax arrangements applying to Australian sourced income that exist in their country of residence.
Medicare is not payable by non-residents.

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