Once you have met a condition of release and / or reached pension age and commenced a pension you will usually receive two components:

1.    Tax Free Component - this part of the benefit is tax-free and does not count towards your assessable income.

2.    Taxable Component ? this part of the benefit is taxable.

1.    The Tax Free Component consists of the Contributions Segment and the Crystallised Segment:

-    The Contributions Segment is defined in Section 307 - 220 of Income Tax Assessment Act 1997 (ITAA 1997) - and consists of contributions that have not been included in the assessable income of the fund, i.e., non concessional or undeducted contributions made from after-tax income.

-    The Crystallised Segment is the part of the superannuation segment that existed as at 30 June 2007 and consists of the following components - refer Section 307 - 225 ITAA 1997:

(a) the concessional component;

(b) the post-June 1994 invalidity component;

(c) the undeducted contributions;

(d) the CGT exempt component; and

(e) the pre-July 83 component.

2.    The Taxable Component consists of two elements: the element taxed in the fund; and the element untaxed in the fund:

-    Taxed elements per s 307 - 275 (2) ITAA 1997are the taxable components of a superannuation benefit.  This component usually consists of taxed contributions and any earnings that have already had tax paid on it in the fund.

-    Untaxed element per s 307 - 275 and s 307 - 280 ITAA 1997, consists of amounts that have not had any tax paid on it in the fund, but are still taxable. The untaxed element must be included in your assessable income. Public sector funds are an example of this.