Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:13:p19
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 13 (pt 19/23)
Character Range: 288127–290999

the general defined benefit cap by step 2 result: $118,750 × 33.973%

  Freya's reduced defined benefit income cap is $40,342.

Freya was also receiving a defined benefit income stream in her own right, her defined benefit income cap will be further reduced by the defined benefit income she received from the date of death of her partner.

Freya is paid fortnightly and her own super income for the financial year is $70,000, which comprises:

    * taxable component – taxed element $60,000
    * taxable component – untaxed element $0
    * tax-free component $10,000.

Her own income stream is taxed under part A of this schedule.

Freya's defined benefit income cap is reduced further by the amount of her personal super income for this period of time: $40,342 − (0.33973 × $70,000).

Freya's reduced defined benefit cap is now $16,561 (rounded to the nearest dollar).

Freya's reversionary death benefit income stream comprises:

    * taxable component – taxed element $30,000
    * taxable component – untaxed element $10,000
    * tax-free component $10,000.

Freya's total reversionary income stream payment from 28 February 2025 is $50,000.

Reversionary income in excess of the reduced cap of $16,561 is $33,439.

Calculate Freya's withholding on her reversionary income stream

Use part C to work out Freya's withholding amount, however you will need to work out the remaining fortnights in the financial year from when the income stream started, to apply the correct withholding as per previous examples.

Step 1: Calculate the fortnightly tax-free component and taxed element in excess of the reduced cap.

$40,000 − $16,561 = $23,439

Freya is paid fortnightly from 28 February 2025, therefore:

$23,439 ÷ 8 = $2,929 (ignoring cents)

Step 2: Divide the amount calculated at step 1 by two.

$2,929 ÷ 2 = $1,464 (ignoring cents)

Step 3: Convert the untaxed element into fortnightly payments.

$10,000 ÷ 8 = $1,250

Step 4: Add the amounts calculated at step 2 and step 3

$1,464 + $1,250

= $2,714

Step 5: Use the Fortnightly tax table at ato.gov.au/taxtables to calculate the withholding amount relevant to the amount worked out in step 4.

Freya recognises that she has multiple taxable income streams and, therefore, has not claimed the tax-free threshold on her reversionary income stream payment. Therefore, the withholding amount on $2,714 is $738.

Step 6: As the reversionary income stream tax-free and taxed element components totalled more than Freya's reduced defined benefit income cap, she is not entitled to a tax offset.

PAYG payment summary reporting

Freya will receive two PAYG payment summaries – superannuation income stream:

(1) PAYG payment summary – superannuation income stream

(personal income stream)

Applicable dates: 01/07/2024 – 30/06/2025

Tax withheld $988

Taxable component – taxed element $60,000

Taxable component –