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  • Calculation of zone or overseas forces tax offsets

    The zone or overseas forces tax offset is made up of the following:

    • a fixed amount
    • a percentage of your base amount.

    The fixed amount is a prescribed amount available to all people in the zone or overseas area eligible for the tax offset.

    You may also be able to include a base amount if you either maintain:

    • a child under 21 or full time student under 25, or
    • an invalid or invalid carer (must be entitled to claim the invalid and invalid carer offset).

    Your fixed and base amounts are determined by your circumstances.

    How to work out your tax offset if your circumstances are simple

    Step 1

    Your tax offset is the amount in Table 1 below if:

    • you will live or work in only one zone or serve in only one specified overseas locality for at least 183 days

      and
    • you are not able to include a base amount as you    
      • are not entitled to claim the invalid and invalid carer tax offset
        and
      • either do not have a dependent child or student at any time in 2019–20, or if you did have a dependent child or student, their adjusted taxable income (ATI) was equal to or greater than $282 plus $28.92 for each week you maintained them.
       
    Table 1: Tax offset amounts

    Offset

    Amount

    Zone A

    $338

    Zone B

    $57

    Special Area

    $1,173

    Overseas forces

    $338

    Child includes your adopted child, stepchild, ex-nuptial child and child of your spouse.

    See also:

    A student must be full-time at a school, college or university.

    If you cannot use Table 1 you will need to work through How to work out your offset if your circumstances are complex.

    If you receive a remote area allowance from Centrelink or the Department of Veterans’ Affairs you must reduce the amount of your zone tax offset by the amount you received for this allowance.

    Step 2

    If you are not entitled to an Invalid and invalid carer tax offset, write your tax offset amount less any remote area allowance at Question 7 on the Withholding declaration.

    If you are entitled to an Invalid and invalid carer offset, transfer the amount of your Zone and overseas forces tax offset to B in Worksheet 8.

    How to work out your tax offset if your circumstances are complex

    You can either use our Zone or overseas forces tax offset calculator or read below.

    The following information will help you work out your base amount, if any.

    Dependent child or student base amount

    Full-year claim

    Your base amount will include the maximum amount shown in Table 2 below for each student under 25 years old on 30 June 2019 in full-time education at a school, college or university, and for each child under 21 years on 30 June 2019 who, for the whole of 2019–20:

    • is treated as an Australian resident
    • is maintained by only you
    • has an ATI of less than $286.

    To calculate the ATI see Adjusted taxable income (ATI) for you and your dependants or use the Income tests calculator.

    If you did not have any dependent children or students, go to Invalid and invalid carer base amount.

    Table 2

    Dependant

    Base amount

    Each student under 25 years old

    $376

    For the oldest non-student child under 21 years old

    $376

    Other non-student children under 21 years old

    $282 for each child

    If all of these requirements were met, add up the base amount for each child or student and write the total at a Worksheet 4.

    If two or more people will contribute to the maintenance of a dependent child or student, each person can only claim a proportion of the base amount.

    If the requirements were met for only part of the year, or your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more, you may be able to claim for a part of the base amount. Read on.

    Part-year claim

    You can claim only part of the base amount for dependent children or students if:

    • the child or student is treated as an Australian resident for only part of 2019–20
    • the student is under 25 years old and in full-time education for only part of 2019–20
    • the child or student will be maintained by you for only part of 2019–20
    • the child will be 21 years old at 30 June 2020 and not in full-time education, or
    • the student will be 25 years old at 30 June 2020.

    Use Worksheet 1 to work out the reduced base amount for each eligible dependent child or student as described in Table 2.

    Worksheet 1

    Row

    Calculation

    Amount

    a

    Maximum base amount for the child or student from Table 2

    $

    b

    Number of days you maintained your child or student and your child or student was an eligible dependant

     

    c

    Number of days in 2019–20

    365

    d

    Divide row b by row c

     

    e

    Multiply row d by row a

    $

    If the ATI of your child or student is less than $286 for the period you are claiming this base amount in respect of them, transfer amount e above to a Worksheet 4.

    If you have more than one eligible child or student and the ATI of each one is less than $286 for the period you are claiming this base amount in respect of them, work out the amount for each child and student, add up all the amounts and write the total at a Worksheet 4.

    If ATI is $286 or more for the period you maintain them

    You cannot claim any base amount for your child or student if that child or student has an ATI equal to or greater than:

    • the total of $282 plus $28.92 for each week you will maintain them for a student under 25 years old or for the oldest child under 21 years old who is not a student, or
    • the total of $282 plus $21.70 for each week you maintain them for any other child under 21 years old who is not a student.

    If your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more but less than the limits shown above, use Worksheet 2 to work out the base amount.

    Worksheet 2

    Row

    Calculation

    Amount

    a

    Base amount for the child or student from Table 2 or row e Worksheet 1 for a part-year claim.

    $

    b

    Your child’s or student’s ATI for the period you maintained them.

    $

    c

    Income above which the base amount begins to reduce.

    $282

    d

    Take row c away from row b.

    $

    e

    Divide row d by 4 because your base amount is reduced by $1 for every $4 of ATI over $282. Do not show cents.

    $

    f

    Take row e away from row a. Show zero (0) if the amount is negative. Do not show cents.

    $

    Transfer the amount at f above to a Worksheet 4. If you have more than one eligible child or student, work out the amount for each child or student, add up all the amounts and write the total at a Worksheet 4.

    Sole parent base amount

    If you have sole care of a dependent child or student and you have written an amount of at least $1 at a Worksheet 4 (base amount for dependent children or students), you may also be eligible for a sole parent base amount.

    You can only claim this base amount if you were a sole parent at any time during the income year and:

    • your usual place of residence is in a remote area of Australia, or
    • serve overseas as a member of the Australian Defence Force.

    Sole care means that you alone had full responsibility on a day-to-day basis for the upbringing, welfare and maintenance of a child or student. We do not consider you to have had sole care if you were living with a spouse (married or de facto) during the year unless special circumstances exist.

    You will need to use Worksheet 3 to calculate a part-year sole parent base amount claim.

    Special circumstances

    If you have a spouse (married or de facto) at any time during 2019–20, you are entitled to a sole parent base amount only in special circumstances.

    Generally, for special circumstances to exist, you must have been financially responsible for and have had sole care of the dependent child or student, without the support a spouse normally provides.

    Examples of situations where special circumstances may arise:

    • You were married or in a de facto relationship at any time during 2019–20, but during the year you separated from or were deserted by your spouse, and for the period that you will claim the sole parent base amount you were not in a de facto relationship.
    • Your spouse is in prison for a sentence of at least 12 months.
    • Your spouse is medically certified as being permanently mentally incapable of taking part in caring for your child or student.

    If you are unsure whether special circumstances apply, phone us on 13 28 61.

    Shared or joint custody after a relationship breakdown

    There are times, after a relationship breakdown, such as a divorce or separation, where both parents share the custody of a child or student. If you can show that you had sole care of a dependent child or student for part of the year, you may be able to claim the base amount for that part of the year. This means more than just having access visits with the child or student.

    We consider you to have sole care of the child or student for the part of the year up to the day the child turned 21 years old or the student turned 25 years old if the dependant:

    • is not receiving full-time education and will turn 21 during 2019–20, or
    • is a full-time student and will turn 25 during 2019–20.

    You are only entitled to claim the base amount for that part of the year before the birthday.

    If you have sole care of a child or student for the whole of 2019–20, write $1,607 at b Worksheet 4.

    Worksheet 3 – Sole parent base amount, part-year claim

    Row

    Calculation

    Amount

    a

    Number of days you had sole care of a child or student.

     

    b

    Multiply row a by $4.40.

    $

    Transfer the amount at b above to b Worksheet 4.

    Invalid and invalid carer base amount

    If you determined in the previous section that you are entitled to an Invalid and invalid carer tax offset you are also entitled to this base amount.

    Write the amount you calculated at c Worksheet 4.

    Working out your total base amount

    Use Worksheet 4 to work out your total base amount.

    Worksheet 4 – Total base amount

    Row

    Calculation

    Amount

    a

    Dependent children or students, from Table 2.

    $

    b

    Dependent children or students, from Worksheet 1.

    $

    c

    Dependent children or students, from Worksheet 2.

    $

    d

    Sole parent – full year.

    $

    e

    Sole parent – part year from Worksheet 3.

    $

    f

    Amount claimed at item T6 Invalid and invalid carer tax offset.

    $

    g

    Add up all of these amounts.

    $

    The amount at d is your total base amount.

    Read on.

    You use the information from Table 4 when you complete either Worksheet 5 or Worksheet 6.

    Table 4

     

    Fixed amount

    Percentage of base amount

    Zone A

    $338

    50%

    Zone B

    $57

    20%

    Special area

    $1,173

    50%

    Overseas forces

    $338

    50%

    Final calculation

    Multiple locations

    If you live or work in more than one zone, special area or specified overseas locality, and you will be in one of them for 183 days or more, check Table 4. If the fixed amount for that zone is higher than for the other zones where you will be, use that fixed amount and Worksheet 5 to work out your tax offset. This will give you the greatest benefit.

    Otherwise go to Category 2.

    Example

    Neil will live in Zone A for 190 days and in Zone B for 40 days. Table 4 shows that the fixed amount for Zone A is higher than the Zone B amount. Neil simply uses the Zone A amount because this will give him the greater benefit. He ignores the time he spent in Zone B.

    End of example
    Category 1

    You are in only one zone or serve only in specified overseas localities for at least 183 days.

    Step 1

    Complete Worksheet 5.

    Worksheet 5

    Row

    Calculation

    Amount

    a

    Your fixed amount from Worksheet 4.

    $

    b

    Your base amount from row g Worksheet 4.

    $

    c

    Multiply row b by the percentage figure from Worksheet 4.

    $

    d

    Add rows a and c.

    If you are claiming an overseas forces tax offset, the amount you can claim is row d. Go to Worksheet 8.

    If you are claiming a zone tax offset, read on.

    $

    e

    Any remote area allowance you received.

    $

    f

    Take row e away from row d and write the answer at row f.

    $

    The amount at f, if it is more than zero (0), is your zone tax offset. Go to Step 2.

    Step 2

    Write your zone or overseas forces tax offset amount at Question 7 on your Withholding declaration unless you are entitled to an Invalid or invalid carer tax offset.

    If you are entitled to an Invalid and invalid carer offset transfer the amount of your Zone and overseas forces tax offset to B in Worksheet 8.

    Category 2

    You:

    • will live or work in more than one zone, or
    • will serve in a specified overseas locality for less than 183 days, or
    • will serve in a specified overseas locality and you will be in one or more zones for a total of at least 183 days.

    You claim for the number of days in each eligible place divided by 183, to a maximum of 183 days for a year. Start with your zone that has the highest fixed amount in Table 4. This will give you the greatest benefit.

    Example 1

    You will spend 100 days in Zone A and 120 days in Zone B. You would claim 100 ÷ 183 days for Zone A and 83 ÷ 183 days for Zone B.

    End of example

     

    Example 2

    You will serve 100 days in a specified overseas locality. You would claim 100 ÷ 183 days.

    End of example

     

    Example 3

    You will serve 100 days in an overseas locality as a member of the defence forces and serve a further 83 days or more in a zone. You would claim the full overseas forces tax offset.

    End of example

     

    Example 4

    You will serve 100 days in an overseas locality and 185 days in a special area. As the special area in Table 4 shows the highest fixed amount and you use up the maximum 183 days for this, you would simply claim the full special area amount and ignore the 100 days in an overseas locality.

    End of example

    Step 1

    Use Worksheet 6 to work out your claim for each zone, special area or overseas locality you were in (as in the examples above).

    Worksheet 6

    Row

    Calculation

    Amount

    a

    Your fixed amount from Table 4  

    $

    b

    Your base amount from row g Worksheet 4  

    $

    c

    Multiply row b by the percentage figure from Table 4.

    $

    d

    Add row a and row c.

    $

    e

    Number of days your usual place of residence was in a zone or special area or you served in an overseas locality, to a maximum of 183 days (see the examples).

     

    f

    Multiply row d by row e.

    $

    g

    Divide row f by 183. This is the amount you can claim.

    $

    Step 2

    Once you have worked out the amount you can claim for each place you were in, add up all the amounts and then use Worksheet 7 below to work out your total tax offset.

    Worksheet 7

    Row

    Calculation

    Amount

    a

    Total of the amounts you have worked out for each zone from row g Worksheet 6.

    If you are claiming an overseas forces tax offset, the amount you can claim is row a. Go to Worksheet 8.

    If you are claiming a zone tax offset, read on.

    $

    b

    Any remote area allowance you received.

    $

    c

    Take row b away from row a. This is the amount you can claim.

    $

    The amount at c, if it is more than zero (0), is the total of your zone tax offset.

    If you are not entitled to an Invalid and invalid carer tax offset, transfer your amount from c to Question 7 on the Withholding declaration. Otherwise, go to Step 3.

    Step 3

    Transfer your amount from c in Worksheet 7 above to B.

    Worksheet 8

    Item

    Calculation element

    Amount

    A

    Invalid and invalid carer tax offset (calculated from the previous section)

    $

    B

    Zone or overseas forces tax offset

    $

    C

    Total tax offsets
    Add A and B

    $

    Transfer your amount from C in Worksheet 8 above to Question 7 on the Withholding declaration.

    Seniors and pensioners tax offset

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

    • eligibility for Australian Government pensions or allowances
    • income.

    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.

    Condition 1: 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:

    • You are 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 2019–20 financial year.
    • 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 received a widow B pension, widow allowance or partner allowance immediately before turning age pension age
      • you would qualify under an international social security agreement.
       
    • 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.
       

    Veteran pension age test

    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.

    Condition 2: Rebate income threshold

    Your rebate income is used to determine your eligibility for the SAPTO. Your rebate income 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).

    Find out about:

    To meet this condition for the 2019–20 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.

    How your rebate income affects the amount of your tax offset

    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: 03 Jul 2019QC 37720