Some cash payments could land pensioners in trouble

Font Size:

Failing to declare some cash payments can land part-time pensioners in hot water with the taxman. While receiving remuneration in hard currency for a completed job is not always illegal, some cash-in-hand payments are positively frowned upon by the law.

What distinguishes the two is any attempt by the paying person or organisation to avoid declaring the sum and failing to take out the right amount of tax to forward to the Australian Taxation Office (ATO).

The ATO recognises that some employers will pay cash-in-hand in a bid to dodge their taxation and employee responsibilities. The office advises that if you are paid in cash you need to:

    • be paid the correct award wages
    • ensure you don’t end up with a large tax bill because your employer hasn’t taken tax out of your pay
    • get the benefit of super contributions
    • be covered by your employer’s workers compensation insurance
    • declare the cash as income when you lodge your tax return
    • receive a pay slip showing all your earnings and the amount of tax taken out
    • receive a payment summary at the end of the year setting out your full earnings for the year and the amount of tax deducted
    • check that your employer is making super contributions on your behalf.

In addition, any tips or gratuities you receive, whether from a customer or a boss, must also be declared as income for taxation purposes. Gambling wins do not need to be declared, unless you are a professional punter.

If you are supplementing your retirement income with cash earnings from the ‘sharing economy’ or selling items or services online, these payments, in most cases, will also have to be declared.

Receiving cash that is not related to employment also has to be declared to the Department of Human Services (DHS) if you are receiving a government payment. Generally, a rare gift of cash or prize winnings do not have to be disclosed.

For more details on whether you need to declare a lump sum payment in an income test for welfare, visit the Services Australia website.

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


How the Work Bonus can make working part time worthwhile

Does the Work Bonus make part-time work worthwhile? That is, will it affect my Age Pension?

The ATO is targeting anyone who earns money from online sources

Australians are being warned that the ATO is tracking online sources of income.

Written by Olga Galacho


Total Comments: 0



    continue reading


    Enthralling, dystopian, sublime: NGV Triennial has a huge 'wow' factor

    Refik Anadol: Quantum memories 2020 (render) custom software, quantum computing, generative algorithm with artificial intelligence (AI), real time digital animation...


    Where to eat, drink and play on Kangaroo Island

    Australia's third largest island is an oasis of pristine wilderness, premium produce and hidden secrets ripe for discovery. Easily accessible...


    Will you need a vaccination to visit Australian venues?

    State premiers have suggested that once vaccinations begin in Australia, those without vaccinations may be banned from visiting some venues...


    Enjoy these islands while you can

    Remarkable Rocks, Kangaroo Island, South Australia. Greg Brave/Shutterstock Freya Higgins-Desbiolles, University of South Australia I fell for Kangaroo Island from...

    New South Wales

    Four fabulous events announced for Mardi Gras 2021

    Mardi Gras is famous for its world-class comedy, performances, vibrant colours and characters. And this year will be no exception....


    Why the royal family retreats to Scotland every year

    "To aim for the highest point is not the only way to climb a mountain," wrote Nan Shepherd in her...


    The five stages of losing your Airbnb virginity

    Airbnb was set up more than a decade ago - first called Air Bed & Breakfast - and now boasts...


    Overseas travel remains unlikely this year

    As the vaccine rollout in Australia gets closer, many thoughts may be turning to exactly how long we have to...