Tax Question for Pensioner for Tax Return

lilyesp on 03/08/2022 - 13:19
Last edited 03/08/2022 - 13:20

Hi All
Helping my father to do his tax. Situation is He recently retired and his wife is on the aged pension (she doesn't have a TFN)

She was on the pension last 6months since November so received about 8k in the aged pension. Prior to that she was mainly working as a housewife so never needed a TFN.

Questions hopefully someone can answer
1) Because she's received the pension the recent financial year my understanding of it is if you've received a PAYG summary and tax was withheld from pension then you do need to lodge a return but if no tax was withheld then no need to. In this case does she needs to lodge a Non-Lodgement Advice? Which would mean she would need to apply for a TFN?

2)when my father does his tax return through my tax section under spouse details-would he put 8k in 'Your spouse's taxable income' or put that as 0 and then 8k in "spouse's aust gov pension and allowances"

Many thanks. Would have thought to ask an accountant but then their taxes are pretty straight forward
Many thanks
🙂lily

Financial

Comments

  • bemybubble on 03/08/2022 - 13:33

    Hi Lily

    Def need a TFN and lodge a tax return if you want your PAYG back. Easiest way is to go to the post office online and fill out the form.

    Second question you’re correct.

    • jv on 03/08/2022 - 13:34

      "but if no tax was withheld"

      • bemybubble on 03/08/2022 - 13:39

        If no tax withheld then no need to lodge so long as you’re not taxable.

        • jv on 03/08/2022 - 13:48

          correct….

    • foxmulder on 03/08/2022 - 13:38

      Tfn is free, online form then go to post office. Beware though with those non ato site that looks like ato site that will ask you for payment for the tfn.

      • lilyesp on 03/08/2022 - 14:28

        True though not sure how long it will take. Thanks 👍

    • lilyesp on 03/08/2022 - 14:30

      Oh she doesn't actually get any part of her pension withheld for tax i.e. no payg.

      My 2nd question had two options. I.e he put 8k in 'Your spouse's taxable income' or put that as 0 and then 8k in "spouse's aust gov pension and allowances"
      Which part is correct hehe🐥

      • bemybubble on 03/08/2022 - 14:49

        $8k in taxable income and spouses gov pensions

        • lilyesp on 03/08/2022 - 15:22

          Thanks 👍

  • freefall101 on 03/08/2022 - 13:35
    +2

    Wow, whole life without working a single day, that's impressive. Has she never had a bank account or owned any shares either? Anything she's ever earned in investment income would have had the maximum withheld from it.

    Technically I don't think she needs to lodge a non-lodgement advice because she's never registered for tax, but I've never actually heard of a case like that. But I'd call the ATO, they'll give you free advice on what to do and give you a straight answer.

    Spousal income should be $8k on your dad's return. Not that it really matters, unless he's hitting the cap for the Medicare surcharge somehow. For my partner I make that number up every year because we don't file at the same time. However that might be difficult because the return asks for your spouse's TFN and there won't be one.

    • AustriaBargain on 03/08/2022 - 13:42

      My ethnic grandmother relied on my grandfather so much that she never even learned English. She probably should have though because the world was pretty hard to navigate for her after he died.

    • lilyesp on 03/08/2022 - 14:21
      +1

      Yes I would consider housewife and looking after 5 children my siblings'children some 'work' ☺️

      I thought 8k would come under taxable income and also in the subsection pension amount recieved?

      • freefall101 on 03/08/2022 - 15:42
        +1

        haha, I was thinking solely in terms of paid work! My mum was a stay at home mum, but still did some part time work while younger and from time to time, has a few investments of her own, etc. Even for income splitting it's worth keeping the investments under the person with the lower income.

        I'm wondering if she's had the maximum tax withheld her entire life and probably owned money by the tax office! $8k actually seems kind of low for someone earning a pension, presumably it's some sort of part one.

        The problem with a spouse on a tax return is you need to put in the tax file number, and there isn't one. I've never filed one without that before so I can't say whether it would reject it in etax or not.

  • tsunamisurfer on 03/08/2022 - 13:42
    +1

    I am surprised that Centrelink will allow hand outs to people with no TFN.

    Don't they share data with the ATO of which TFN is a critical identifier?

    Often with no TFN, the payer has to assume to pay the max witholding tax rate.

    How does someone receive hand outs with no TFN and pay no witholding?

    • lilyesp on 03/08/2022 - 14:16
      +1

      Sorry but I don't consider pensions and disability and Dva pay 'handouts'

  • wei13 on 03/08/2022 - 18:51

    She would have a TFN already, even if she doesn't remember. It is one of the requirements to receiving the Aged Pension via Centrelink in Australia.

  • kiitos on 04/08/2022 - 07:53

    Does she have a bank account for the pension payments? That would be subject to full withholding for any interest of she chose not to quote a TFN.

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