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Rexsmith

do retired Aussies pay tax on pensions?

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Rexsmith

A guy told me  that retired Aussies living on pensions in Australia pay no tax on this income. He said regardless of how large the pension is. I find this hard to believe. Anyone from Australia who can tell me if this is true? Thanks

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Ozepete

There is no tax on pensions in Oz.  Au$826.00 for singles and 1245.00 for couples per fortnight tax free, plus rent allowance, phone , power, travel, etc etc  concessions and basically free medical.  It's a great life if ya don't work!!!

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baby43

I am on a aged pension here in Australia, drive a school bus, my accountant told me, i can earn up to $39,000.00 without paying tax, sure my bus company take tax out when i get paid  but i get all the tax back when i do a tax return every year.

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to_dave007

For Canadians the pensions ARE taxed, along with other income, but the first CAD$20,000 (approximately AUD$21,500) of all income is tax free.

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lamoe
Posted (edited)
22 minutes ago, to_dave007 said:

For Canadians the pensions ARE taxed, along with other income, but the first CAD$20,000 (approximately AUD$21,500) of all income is tax free.

Same in US - added to total income on a pro-rated basis

If no other income - then 50% is considered taxable but standard deductions usually mean no federal taxes to be paid

Illinois (state)  different deduction / rate  basis

Edited by lamoe

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cookie47

Same answer as Ozepete.

Not much more to add....

Sent from my MI MAX using Tapatalk

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sierra01

UK doesn't pay enough pension to pay tax 😥 

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mikewright
Posted (edited)

Depends on the pension.

OP suggests no tax is payable regardless of how large the pension is. This is probably correct for most pensions from a superannuation scheme in the pension stage.

Some government pensions are also tax free, such as the TPI pension paid to totally and permanently incapacitated military veterans. But for the more common "old age" pension, it would usually be added to any other income you receive, and form part of your taxable income. But whether you pay tax or not would then depend on your total income.

Edited by mikewright
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CardiacKid
19 hours ago, mikewright said:

Some government pensions are also tax free, such as the TPI pension paid to totally and permanently incapacitated military veterans. But for the more common "old age" pension, it would usually be added to any other income you receive, and form part of your taxable income. But whether you pay tax or not would then depend on your total income.

Glad to see Australia as well as the U.S. recognizes that the tax on disability pensions was paid the day the incapacitation occurred.

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Jess Bartone
On 6/6/2019 at 4:26 PM, Rexsmith said:

A guy told me  that retired Aussies living on pensions in Australia pay no tax on this income. He said regardless of how large the pension is. I find this hard to believe. Anyone from Australia who can tell me if this is true? Thanks

Be aware that you must be resident in Australia for 2 years prior to applying for the pension. No exceptions.

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GBT62
3 hours ago, Jess Bartone said:

Be aware that you must be resident in Australia for 2 years prior to applying for the pension. No exceptions.

and I'm sure by the time I would be possibly eligible (on the current rules) - it'll be moved out by another 10 years older (it's currently being pushed from 65 up to 70 over a period of time).  I can't see me doing any 2 year visit back to TaxStralia in that case...

 

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Paddy
On 6/6/2019 at 8:16 PM, sierra01 said:

UK doesn't pay enough pension to pay tax 😥 

I have 2 UK pensions - both taxable. The sum of them still doesn’t incur tax!

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Paddy
On 6/6/2019 at 6:06 PM, to_dave007 said:

For Canadians the pensions ARE taxed, along with other income, but the first CAD$20,000 (approximately AUD$21,500) of all income is tax free.

@to_dave007 are you taxed as a resident or non-resident? That $20k is an approximate figure based on tax credits/thresholds etc. for a person taxed as a resident. For a non-resident, CRA takes 25% of Canadian source income and calls it quits - at least, that’s my understanding (I am about to find out!...)

But you’re right about pensions being taxed. OAS can even be clawed back (up to 100%) if total income exceeds a threshold amount (somewhere in the $70k range). 

There is a $2000 deduction for any pension income. So it’s true to say that the first $2000 of pension income is not taxed. 

Edited by Paddy
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to_dave007
39 minutes ago, Paddy said:

@to_dave007 are you taxed as a resident or non-resident? That $20k is an approximate figure based on tax credits/thresholds etc. for a person taxed as a resident. For a non-resident, CRA takes 25% of Canadian source income and calls it quits - at least, that’s my understanding (I am about to find out!...)

But you’re right about pensions being taxed. OAS can even be clawed back (up to 100%) if total income exceeds a threshold amount (somewhere in the $70k range). 

There is a $2000 deduction for any pension income. So it’s true to say that the first $2000 of pension income is not taxed. 

Still taxed as resident..  Sought and obtained CRA residency status.  

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