ATO Interpretative Decision

ATO ID 2001/242

Income Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the taxpayer eligible for a Senior Australians Tax Offset (SATO) under section 160AAAA of the Income Tax Assessment Act 1936 (ITAA 1936) for the 2000-2001 income year?

Decision

Yes, the taxpayer is eligible for a SATO under section 160AAAA of the ITAA 1936 for the 2000-2001 income year.

Facts

The taxpayer has reached pension age and is an Australian resident for age pension purposes.

The combined income of the taxpayer and his spouse for the 2000-2001 income year is less than $58,244.

The taxpayer was not in gaol for the entire income year.

Reasons for Decision

The taxpayer's eligibility for a SATO is determined under section 160AAAA of the ITAA 1936. A taxpayer is eligible for a SATO provided the following tests are met:

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Age

The age test is based on the taxpayer's age at the end of the financial year and varies depending on the taxpayer's gender and whether they are a veteran in receipt of a Department of Veterans Affairs (DVA) pension.

The general age limit for:

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males is 65 years of age or more and

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females is 61.5 years of age or more.

The age limit for DVA pension recipients who are veterans is:

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60 years or more for males and

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56.5 years or more for females.

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Residency

The residency test requires that the taxpayer be an Australian resident for age pension purposes (generally been a resident for 10 years).

If the taxpayer has been an Australian resident for less than 10 years they will still be considered to have been a resident for age pension purposes, within the meaning of the Social Security Act 1991, if they have qualifying Australian residence (for example, if they are covered by a Social Security International Agreement) or have a qualifying residence exemption for an age pension (for example, if they are a refugee).

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Gaol

Taxpayers will be ineligible for a SATO if they were imprisoned for the whole of the income year. A taxpayer may still be eligible for a SATO if imprisoned for only part of the income year.

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Income

The income test varies according to the marital status of the taxpayer. To be eligible for a SATO, taxable income must be:

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less than $37,840 if the taxpayer is single during the year

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less than $58,244 combined taxable income for the taxpayer and their spouse (married or de-facto) or

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less than $70,404 combined taxable income for the taxpayer and their spouse if they are living apart due to illness.

The taxpayer satisfies the above tests and is therefore eligible for a SATO.

The maximum amount of SATO a taxpayer may be eligible for is set out in the following table.

The maximum SATO amount in column 2 reduces by 12.5 cents for every dollar that the taxpayer's taxable income exceeds the relevant figure in column 3. However, married or de-facto taxpayers entitled to a SATO can transfer-in either any unused portion of their spouse's Senior Australians or Pensioner Tax Offset (where the spouse is not of age pension age).

If a taxpayer is eligible for a SATO, they may not need to lodge an income tax return for the 2001 year if their taxable income is at or below the relevant levels set out in column 3.

Legislative References:
Income Tax Assessment Act 1936
   section 160AAAA

Keywords
Rebates
Tax free threshold

Business Line:  Small Business/Individual Taxpayers

Date of publication:  21 August 2001

ISSN: 1445-2782