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  • Calculate a seniors and pensioners tax offset

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    Eligibility

    You can claim or vary the seniors and pensioners tax offset (SAPTO) through your Withholding declaration if you meet both conditions relating to:

    • eligibility for Australian Government pensions or allowances
    • income.

    If you have a spouse

    If you have a spouse:

    • you also need to work out whether they were eligible
    • you may not get the seniors and pensioners tax offset even if you meet all the eligibility conditions as the amount of the tax offset is based on your individual rebate income, not your combined rebate income.

    Claim the tax offset with only one payer

    You are not entitled to claim tax offsets with more than one payer at the same time.

    If your income comes from more than one source, do not complete this question for any of your payers.

    To be eligible for the SAPTO, you must meet conditions 1 and 2 explained below.

    Eligibility condition 1

    Condition 1 is eligibility for an Australian Government age pension or similar type of payment

    To meet this condition, you must fit into one of the following categories.

    Pension, allowance or benefit during 2021–22

    You are eligible if you were receiving an Australian Government age pension or allowance from Centrelink, or a pension, allowance or benefit from the Department of Veterans’ Affairs, at any time during the 2021–22 financial year.

    Eligible for Centrelink age pension but not receiving it

    You are eligible if you meet the Centrelink age pension age requirement and would be eligible for an Australian Government age pension, but are not receiving one because you have not made a claim or because of the application of the income test or the assets test and you satisfy one of the following:

    • You have been an Australian resident for age pension purposes for 10 years or more, of which at least five years were continuous.
    • You have a qualifying residence exemption because you arrived in Australia as a refugee or under a special humanitarian program.
    • You are a woman who was widowed in Australia (at a time when both you and your late partner were Australian residents), you have made a claim for the age pension, and you had two years residence immediately before your claim.
    • You are a woman and, on 19 March 2020, you were receiving either a
      • wife pension and you were not receiving a carer allowance
      • special needs widow B pension.
       
    • You would qualify under an international social security agreement.
    Eligible for pension, allowance or benefit from Veterans’ Affairs but not receiving it

    You are eligible if you meet the veteran pension age test and would be eligible for a pension, allowance or benefit from Veterans’ Affairs but are not receiving one because you have not made a claim or because of the application of the income test or the assets test, and you are either a: 

    • veteran with eligible war service
    • Commonwealth veteran, allied veteran or allied mariner with qualifying service.

    You meet the veteran pension age test if one of the following applied to you and you were eligible for a pension, allowance or benefit under the Veterans’ Entitlements Act 1986:

    • You have eligible war service – that is, service in World War II or operational service as a member of the Australian Defence Force.
    • You are a Commonwealth or allied veteran who served in a conflict in which the Australian Defence Force was engaged during a period of hostilities – that is, World War II, or in Korea, Malaya, Indonesia or Vietnam.
    • You are an Australian or allied mariner who served during World War II.
    • You are the war widow or widower of a former member of the Australian Defence Force.

    ‘Pension, allowance or benefit’ includes:

    • disability pension
    • service pension
    • white or gold Repatriation health cards for treatment entitlements.

    If you need help working out your eligibility for:

    For all other enquiries about the SAPTO, contact us.

    Eligibility condition 2

    Condition 2 relates to your rebate income threshold.

    Your rebate income (based on income tests) includes your:

    • taxable income
    • adjusted fringe benefits (reportable fringe benefits multiplied by 0.53)
    • total net investment loss (this includes both net financial investment loss and net rental property loss)
    • reportable super contributions (this includes both reportable employer super contributions and deductible personal super contributions).

    To meet this condition for the 2021–22 financial year, you must satisfy one of these rebate income thresholds:

    • You do not have a spouse and your rebate income will be less than $50,119.
    • You have a spouse and your combined rebate income will be less than $83,580.
    • You have a spouse, and for some or all of the financial year you have to live apart due to illness or because one of you is in a nursing home, and you and your spouse’s combined rebate income will be less than $95,198.

    Your spouse is a person (of any sex) who for the income year:

    • you are in a relationship with that is registered under a prescribed state or territory law
    • although not legally married to you, lives with you on a genuine domestic basis in a relationship as a couple.

    The threshold amounts shown here relate to your eligibility for the SAPTO – they are not tax-free thresholds.

    The term ‘have to live apart due to illness’ applies when you and your spouse are paying higher living expenses because:

    • one or both of you has a continuing illness or infirmity
    • you cannot live together in your home as a result.

    Work out your SAPTO

    If you meet conditions 1 and 2 described above, you are eligible for the SAPTO.

    Being eligible only means that you may receive the SAPTO. Your own rebate income will be used to work out the amount of your tax offset. The combined rebate income amounts set out in Condition 2 are used for eligibility purposes and not for working out the amount you will receive.

    You will receive the maximum SAPTO if your rebate income is equal to or below the rebate income thresholds shown in Column 1 in the table below. A reduced tax offset will apply where your rebate income is above the thresholds shown in Column 1 but less than the cut-out threshold shown in Column 2.

    Table 9: Rebate income thresholds for SAPTO

    Seniors and pensioners

    Column 1
    Maximum tax offset threshold

    Column 2
    Cut-out threshold

    Single

    $32,279

    $50,119

    Each member of a couple

    $28,974

    $41,790

    Each member of an illness-separated couple

    $31,279

    $47,599

    Answer no at Question 8 of the Withholding declaration if you are either:

    • not eligible for the SAPTO, or
    • eligible and want to claim your entitlement to the tax offset as a lump sum in your end-of-year income tax assessment.

    Answer yes at Question 8 of the Withholding declaration if you are eligible and you choose to receive the SAPTO by reducing the amount withheld from payments made to you during the year.

    Last modified: 07 Dec 2021QC 37720