What Are The Tax Components of My Military Superannuation and Pension?

​Have you been sent a summary from the Commonwealth Superannuation Corporation (CSC) that outlines what the various components are of your superannuation pension amount? If so, what does it all mean?

In your Military Superannuation, the taxable taxed, taxable untaxed, and tax-free components refer to how different parts of your pension are treated for tax purposes. This affects what tax you pay if you either claim these amounts or roll them over to another super fund. The age you commence a pension also affects the tax paid on these amounts.

1. Taxed Component: This part of your pension has already had tax paid on it. When you receive payments from this component, they are tax-free if you're over 60 years old. If you're under 60, a portion may still be taxable. If you roll this amount over to another super fund, it won’t pay any tax going into the fund.

 

1. Untaxed Component: This portion hasn’t had tax paid on it. It includes contributions from your employer and potentially other concessional contributions. Payments from the untaxed component are subject to tax, regardless of your age, the rates will vary depending on your age and income. If you roll this amount over to another super fund, the first $1.78 million will pay 15% tax going into the fund.

 

1. Tax-Free Component: This part includes non-concessional (after-tax) contributions and some other specific payments. It is entirely exempt from tax, no matter your age. This might also come from your pre-July 1999 service that has been rolled over. If you roll this amount over to another super fund, it won’t pay any tax going into the fund.

​Understanding these components helps you manage your pension effectively and avoid unexpected tax obligations.