When it’s tax time in Australia, a common question we hear is:

“Do I need to include Centrelink payments in my tax return?”

The short answer: it depends on the type of payment.
Some Centrelink payments are taxable and must be reported, while others are completely tax-free.

In this guide, we break it down clearly for you so you can lodge your return with confidence.

Australian tax return form with Centrelink document and banknotes, illustrating which Centrelink payments must be reported in your tax return in Australia 2025.

Taxable Centrelink Payments (Must Be Reported)

The Australian Taxation Office (ATO) treats the following Centrelink payments as assessable income, meaning they must be declared on your tax return:

  • JobSeeker Payment
  • Youth Allowance (if you’re looking for work or studying)
  • Parenting Payment (single or partnered)
  • Disability Support Pension (if under Age Pension age)
  • Carer Payment
  • AU study / Living Allowance
  • Newstart Allowance (now replaced by JobSeeker)
  • Age Pension
  • Special Benefit


These payments are taxable because they count as income, and may affect your tax refund, HECS/HELP repayment thresholds, and other government obligations.

Non-Taxable Centrelink Payments (Do Not Report)

The following Centrelink payments are not considered taxable income and do not need to be included in your tax return:

  • Family Tax Benefit (Part A & B)
  • Child Care Subsidy
  • Rent Assistance
  • School Kids Bonus (historically tax-free, now discontinued)
  • Carer Allowance
  • Crisis Payment
  • Energy Supplement (attached to some payments)
  • Disability Support Pension (if you’re over Age Pension age)

Common Confusion:

The Family Tax Benefits is not taxable.
Many families accidentally include it, thinking they have to. But according to the ATO, this payment is tax-free and should not be added to your return.

Common Mistakes to Avoid

Lodging a tax return with Centrelink income? Here are the top mistakes people make:

  • Reporting Family Tax Benefit as taxable income
  • Forgetting to include Parenting Payments (which are taxable)
  • Overlooking Youth Allowance received by dependents (this must be reported)

Even small errors can cause refund delays or ATO reviews.

Centrelink Tax Reporting Checklist

Before you lodge your return, run through this checklist:

  • Log in to your myGov account
  • Download your Centrelink Payment Summary
  • Check which payments are taxable
  • Exclude non-taxable payments
  • Make sure family members’ payments are reported correctly
  • Ask a registered tax agent if you’re unsure

Why Accurate Reporting Matters

Making a mistake on your tax return might feel minor, but it can result in:

🚫 Refund delays

⚠️ ATO data-matching adjustments

💸 Incorrect tax assessments or future penalties

By accurately reporting your Centrelink payments, you ensure your return is processed faster, and you’re compliant with current ATO tax laws.

Need Help With Your Tax Return?

At Tax NextGen, we help Aussie individuals and families lodge correctly — especially when Centrelink payments are involved.

Whether you’re a student, parent, jobseeker, or full-time worker, we’ll make sure you:

  • Report the right payments
  • Claim what you’re entitled to
  • Maximise your refund — the right way