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  • Transferring the seniors and pensioners tax offset

    If you received the seniors and pensioners tax offset (SAPTO), you may be eligible to transfer unused portions of your offset to your spouse.

    When transferring unused SAPTO, both you and your spouse must be eligible to claim the offset and be either – an eligible couple:

    • living apart due to illness with a rebate amount of $2,040 each
    • living together with a rebate amount of $1,602 each.

    If your spouse has taxable income greater than $6,000, we calculate their unused SAPTO amount with the formula:

    A − ((B − $6,000) × 0.15)

    • A equals the spouse's rebate amount for the year
    • B equals the spouse's taxable income plus exempt pension income for the year.

    Foreign residents

    If your spouse is a foreign resident and their taxable income is greater than zero, we calculate your spouse’s unused SAPTO amount with the following formula:

    A − (B × marginal tax rate)

    • A equals your spouse's rebate amount for the year
    • B equals your spouse's taxable income for the year.

    If your spouse is a foreign resident and received an Australian government pension or allowance, we calculate your spouse’s unused SAPTO amount as if they were a resident.

    The following examples may be a useful reference to show how we calculate transfers of SAPTO amounts between spouses.

    Example – Residents

    Step 1: Calculating your spouse's unused SAPTO

    Your spouse's rebate amount is $2,040 (circumstance code B) and their taxable income is $10,000. The calculation would be:

    • $2,040 − (($10,000 − $6,000) × 0.15)
    • $2,040 − (($4000) × 0.15)
    • $2,040 − $600 = $1,440

    $1,440 of your spouse's unused SAPTO is available for transfer to you if you are eligible.

    Note: Where your spouse's taxable income is $6,000 or less, no income tax is payable and the full value of their SAPTO rebate amount – for example, $2,040 – would be available for transfer to you if they are eligible.

    Step 2: Calculating your rebate threshold

    Your SAPTO will be reduced by 12.5 cents for every dollar over your rebate threshold.

    Your rebate threshold is calculated as follows:

    • A: Maximum tax offset that applies to you = $2,040
    • B: Add your spouse's unused tax offset from Step 1 of $1,440 to A = $3,480
    • C: Add the maximum low income tax offset of $445 to B = $3,925
    • D: Divide C by the lowest marginal tax rate of 0.19 = $20,657.89
    • E: Add the income tax-free threshold of $18,200 to D = $38,857,89
    • F: Is the amount in step E greater than the rebate reduction threshold of $37,000?
      • if No, your rebate threshold is the amount calculated in step E and go to Step 3 for the SAPTO calculation.
      • if Yes, continue with the steps below and your rebate threshold will be the amount calculated at step P
    • G: Add the 2nd lowest marginal tax rate of 0.325 to the low income tax offset reduction rate of 0.015 = 0.34
    • H: Subtract the lowest marginal tax rate of 0.19 from G = 0.15
    • I: Multiply H by the rebate reduction threshold of $37,000 = $5,550
    • J: Multiply the lowest marginal tax rate of 0.19 to the tax-free threshold of $18,200 = $3,458
    • K: Add the maximum low income tax offset of $445 to J = $3,903
    • L: Add the maximum tax offset that applies to you of $2,040 to K = $5,943
    • M: Add your spouse's unused tax offset of $1,440 to L = $7,383
    • N: Add I and M = $12,933
    • O: Add the rebate reduction rate of 0.125 to 2nd lowest tax rate of 0.325 = 0.34
    • P: Divide N by O = $38,038 (Rounded to the nearest dollar)

    Your SAPTO will be reduced by 12.5 cents for every rebate income over your rebate threshold of $38,038.

    Step 3: Calculating your SAPTO

    Your SAPTO will be reduced by any amount over the rebate threshold calculated in Step 2.

    A: Your maximum tax offset is $2,040

    B: Your rebate income is $48,000

    C: Subtract your rebate income of $48,000 by your rebate threshold calculated in step 2 of $38,038 = $9,962

    D: Multiply C by the rebate reduction rate of 0.125 = $1,245.25

    E: Subtract D from A = $794.75

    F: Add your spouse's unused tax offset from Step 1 of $1,440 to E = $2,234.75

    Your SAPTO is calculated to be $2,235 (rounded) after transferring your spouse's unused tax offset to you.

    End of example

    See also:

      Last modified: 12 Mar 2019QC 48694