• 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) x 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 x marginal tax rate)

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

    Note: 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) x 0.15)
    • $2,040 – (($4000) x 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 SAPTO

    Once we have calculated your spouse's SAPTO, we then calculate your SAPTO. This is based on your rebate income of $48,000 as follows:

    A: Your rebate income = $48,000.00

    B: Maximum tax offset that applies to you = $2,040.00

    C: Add your spouse's unused tax offset $1,440 to B = $3,480.00

    D: Add the maximum Low income tax offset of $445 to C = $3,925.00

    E: Divide D by the lowest marginal tax rate of 0.19 = $20,658.00

    F: Add the tax-free threshold of $18,200 to E = $38,858.00

    G: Income threshold applicable (rounded up F to the nearest dollar) = $38,858

    Note: If your rebate income A is below the threshold amount at G, your SAPTO is the amount at C, otherwise proceed to the following steps.

    H: A minus G = $9,142.00

    I: Divide H by 8 (reduction rate for each $ over the threshold) = $1,142.75

    J: C minus I (rounded up to the nearest dollar) = $2,338

    End of example

    See also:

      Last modified: 04 Apr 2017QC 48694