Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
The senior Australians tax offset allows eligible people to earn more income before they pay tax and the Medicare levy. In some cases it will result in a person no longer having to lodge a tax return.
This fact sheet answers commonly asked questions.
For more information about the senior Australians tax offset go to the end of this fact sheet.
What is a tax offset?
A tax offset, formerly known as a rebate, reduces the amount of tax you have to pay.
What is the low income tax offset?
The low income tax offset is a tax offset that is available to you if your taxable income is less than $27,475. The maximum tax offset is $235. This amount reduces by 4 cents for every dollar that your taxable income exceeds $21,600; it cuts out completely when your taxable income reaches $27,475.
What is the senior Australians tax offset?
The senior Australians tax offset is a tax offset that is available to anyone who meets certain eligibility conditions. To find out if you are eligible, see the fact sheet Senior Australians tax offset: general information to find out if you are eligible.
What is the pensioner tax offset?
The pensioner tax offset is a tax offset available to certain Commonwealth of Australia government pension, allowance and payment recipients who are not eligible for the senior Australians tax offset.
What is the low income Medicare levy threshold?
The low income Medicare levy threshold is the taxable income at or below which you do not have to pay the Medicare levy. If you are eligible for the senior Australians tax offset, your Medicare levy low income threshold for the 2003–04 income year is $20,500.
How can I work out my senior Australians tax offset?
You do not have to work out your senior Australians tax offset. The Tax Office will work it out for you from the information you provide in your tax return.
If you wish to work out the amount, see the fact sheet Senior Australians tax offset: calculating your tax offset and follow the instructions on the worksheet appropriate to your circumstances.
Veterans, war widows and war widowers may be eligible for the senior Australians tax offset. How do I know if I am a veteran, war widow or war widower?
A ‘veteran’ is a person who served in the Australian Defence Force, or the Defence Force of a Commonwealth or allied country, or an Australian or allied mariner and is eligible for a pension, allowance or benefit under the Veterans’ Entitlements Act 1986. This includes a disability pension, service pension, or a white or gold Repatriation Health Card for treatment entitlements.
To be a ‘war widow’ or ‘war widower’, you must be receiving a war widow’s or war widower’s pension from the Department of Veterans’ Affairs (DVA), or receiving a foreign government pension of a similar nature to the Australian war widow’s or war widower’s pension.
If you are unsure if you are a veteran, war widow or war widower, you can visit the DVA website at www.dva.gov.au or phone DVA on 13 32 54.
People who qualify for an age pension but do not satisfy the residency test under the Social Security Act 1991 may now be eligible for the senior Australians tax offset. How do I know if I qualify for an age pension?
If you are unsure if you qualify for an age pension or a social security pension, phone Centrelink on 13 23 00.
As I’m eligible for the senior Australians tax offset, how much can I earn before paying tax?
It depends on your circumstances.
If you are single, you can earn up to $20,500 before you have to pay personal income tax.
If you have a spouse and you and your spouse lived together for the whole income year, you can earn up to $16,806.
If you have a spouse but you and your spouse lived apart at any time during the income year because of illness, you can earn up to $19,383.
In both cases, the amount your spouse can earn is determined by the tax offsets that apply to them. In either case, where you have a spouse and you can transfer an unused portion of your spouse’s unused pensioner tax offset or senior Australians tax offset, the cut out threshold will increase.
For more information you will need to refer to the fact sheet Senior Australians tax offset: calculating your tax offset.
In deciding my eligibility for the senior Australians tax offset, does it matter what type of income I earn?
No. The senior Australians tax offset is available to anyone who meets all the eligibility criteria, no matter what the source of their income is. It can be employment income, investment income or income from a government pension, allowance or benefit. The eligibility criteria are described in the fact sheet Senior Australians tax offset: general information.
What is the difference between the senior Australians tax offset and the pensioner tax offset?
There are different criteria to determine eligibility for the senior Australians
tax offset and the pensioner tax offset. The eligibility criteria for the senior Australians tax offset are set out in the fact sheet Senior Australians tax offset: general information. To be eligible for the pensioner tax offset you need to receive certain Commonwealth government pensions, allowances or payments. For a list of these pensions, allowances and payments, refer to:
- question 6 of TaxPack 2004 (NAT 976—6.2004)
- question 1 of Retirees TaxPack 2004 (NAT 2596—6.2004).
You may meet all the eligibility criteria for the senior Australians tax offset and also receive an eligible Commonwealth pension, allowance or payment such as an age pension. In this case, because you can use only one of these tax offsets to reduce the amount of tax you have to pay, your tax liability would be worked out on the basis of your senior Australians tax offset, as it gives a higher amount than the pensioner tax offset.
What can I do if I do not have to pay tax because of the senior Australians tax offset but have had tax withheld from my superannuation pension in 2003–04?
You need to lodge a 2004 tax return to claim a refund of the tax withheld.
If you think you won’t have to pay tax for the 2004–05 income year, you can complete a Withholding declaration (NAT 3093—7.2003) to stop having tax withheld from your superannuation pension so that you don’t have to lodge a 2005 tax return. Answer YES at questions 5, 6 and 10 of section A on the Withholding declaration. To get this publication, visit the Tax Office website at www.ato.gov.au or phone our Publications Distribution Service on 1300 720 092.
If you would like more information about the senior Australians tax offset, you can:
- refer to other fact sheets in this series – see below
- phone the Personal Tax Infoline on 13 28 61 – and press 1 when prompted
- download information from the website at www.ato.gov.au
- phone the National Relay Service on 13 36 77 if you have a hearing or speech impairment, or
- speak to your tax adviser.
If you do not speak English and need help from the Tax Office, phone the Translating and Interpreting Service on 13 14 50.
You can order copies of the following fact sheets by phoning 13 28 61 or visiting the Tax Office website at www.ato.gov.au
Senior Australians tax offset: general information (NAT 4807—6.2004)
Senior Australians tax offset: calculating your tax offset (NAT 4808—6.2004)
Please get help from the Tax Office or a professional tax practitioner if you feel this fact sheet does not fully cover your circumstances. We regularly revise our publications to take account of changes to the law and you should make sure that this information is current.
If you try to follow the information contained in this fact sheet, and in doing so you make an honest mistake, you won't be subject to a penalty. However, as well as any underpaid tax, we may ask you to pay a general interest charge.
We make every effort to ensure this information and advice is accurate. If you follow our advice, which subsequently turns out to be incorrect, or our advice is misleading and you make a mistake as a result, you won't be subject to a penalty or a general interest charge although you'll be required to pay any underpaid tax.
This fact sheet is current at June 2004.
Last Modified: Wednesday, 14 July 2004
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