Income tests
Work out your eligibility for some tax offsets and benefits, and if items in a tax return apply to you.
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Income tests and your tax return
We use items from your tax return when applying income tests.
Ensure that you complete all items that apply to you in the income tests section of your tax return.
If you have a spouse, you should also include your spouse's income in the Spouse details section of your tax return.
When the income test applies
We use income tests to work out whether tax offsets and other items apply to you.
Tax offsets include:
- invalid and invalid carer tax offset
- seniors and pensioners tax offset
- Medicare levy surcharge (lump sum payment in arrears) tax offset
- spouse super contributions tax offset
- private health insurance tax offset.
Other items include:
We use the family income threshold to assess most offsets, benefits and obligations.
Adjusted taxable income
Your adjusted taxable income (ATI) affects your entitlement to any dependant tax offset.
ATI is the sum of the following amounts less (minus) any child support you pay:
- taxable income (your assessable income minus deductions), disregarding any assessable First Home Super Saver (FHSS) released amount
- adjusted fringe benefits total, that is the sum of
- reportable fringe benefits amounts received from employers exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986 multiplied by 0.53, and
- reportable fringe benefits amounts from employers not exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986
- target foreign income (includes any income earned from overseas that is not already included in your taxable income or received in the form of a fringe benefit)
- total net investment loss (includes both net financial investment loss and net rental property loss)
- tax-free government pensions or benefits (includes certain disability pensions, carer payments and defence pensions)
- reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions)
Rebate income
We work out what we call 'rebate income' to determine whether you are eligible for the seniors and pensioners tax offset.
Your rebate income is the total amount of your taxable income (disregarding your assessable First home super saver released amount), plus the following amounts if they apply to you:
- reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions)
- total net investment loss (includes both net financial investment loss and net rental property loss)
- adjusted fringe benefits total, that is the sum of
- reportable fringe benefits amounts you received from employers exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986 multiplied by 0.53, and
- reportable fringe benefits amounts from employers not exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act 1986.
Income for Medicare levy surcharge purposes
We use your income for Medicare levy surcharge purposes to work out if you have to pay the Medicare levy surcharge (MLS) and the rate of your MLS.
The Medicare levy surcharge (MLS) is levied on Australian taxpayers who:
- don't have an appropriate level of private patient hospital cover for themselves, their spouse and dependent children, and
- earn above a certain income.
Income for surcharge purposes is used to test your eligibility for the private health insurance rebate. Income for surcharge purposes includes your:
- taxable income (your assessable income minus deductions), disregarding any assessable FHSS released amount
- reportable fringe benefits amount, as reported on your income statement or payment summary
- reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions)
- total net investment loss (includes both net financial investment loss and net rental property loss)
- the amount on which family trust distribution tax has been paid.
If you were aged from your preservation age to under 60 years old, this amount is reduced by the taxed element amount of superannuation lump sums, other than a death benefit superannuation lump sum that do not exceed your low rate cap.
Study and training support loan repayment income
The study and training support loan repayment income includes your:
- taxable income (your assessable income minus deductions), disregarding any assessable FHSS released amount
- total net investment loss (includes both net financial investment loss and net rental property loss)
- reportable fringe benefits amount, as reported on your income statement or payment summary
- reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).
This applies to the:
- Higher Education Loan Program (HELP)
- Student Start-up Loan (SSL)
- ABSTUDY Student Start-up Loan (ABSTUDY SSL)
- VET Student Loan (VSL)
- Trade Support Loan (TSL)
- Student Financial Supplement Scheme (SFSS)
Super income tests
Reportable employer super contributions are also included in the income tests for the following:
- spouse super contributions tax offset
- government super co-contribution
- deduction for personal super contributions.
Income tests calculations
Use the Income tests calculator to help you work out your:
- adjusted taxable income (ATI) amount
- rebate income for seniors and pensioners tax offset
- income for surcharge purposes to determine liability for Medicare levy surcharge.
Work out your eligibility for some tax offsets and benefits, and if items in a tax return apply to you.