The Seniors & Pensioners Tax Offset (SAPTO) is a tax offset available to people who have reached their Age Pension age (65 for those born pre-1 July 1952) and also meet the income criteria outlined below.
For a single, full entitlement of $2,230 is available up to an assessable income level of $32,279 p.a. A reduction in the offset of 12.5c per dollar above $32,279 p.a. applies and entitlement ceases at an income of $50,119 p.a.
Couples are initially assessed on their combined income for SAPTO. Eligibility for the full offset of $3,204 ($1,602 max each) is available for a combined assessable income less than $57,948 p.a. Entitlement to the offset ends at a joint income level of $83,580 p.a. (max $44,060 each). Members of a couple who are under this threshold are then assessed individually for the SAPTO.
Couples have the additional benefit of being able to transfer any unused SAPTO amount to their partner if they are both eligible. However, the full SAPTO benefit is not transferrable if the transferring partner has taxable income greater than $6,000. A formula is used to calculate the amount of SAPTO that can be transferred to a partner.
Different rules apply for members of a couple who were separated due to illness.
The SAPTO is not refundable. This means that in the best-case scenario the SAPTO reduces your tax payable to $0.