Senior and pensioners tax offset (SAPTO - formerly SATO)

Members-only Log-in at right to access more information, such as the cut-off threshold limits, a handy SATO calculator, and full explanation of 'rebate income'. Don't have a membership? Join now, or view member benefits.

After working (and paying taxes) for most of your life, it can be a good feeling to get to that stage of your life where it's time to get some pay-back from the taxman. Your golden years can be given an extra glow by qualifying for the senior Australian tax offset (SATO).

To get a tax offset is another way of saying you get to reduce your tax bill. But an offset doesn't lessen 'taxable income', just the tax owing on it. So it can reduce tax to zero in theory, but will never in itself result in a refund. Since receiving the offset will make you liable for less tax, you can earn more income before paying any tax (and Medicare levy). In fact the intention of the offset is to make it so that lower income seniors have no tax liabilities.

You need to meet certain conditions to qualify, chief among them being your age – you need to be at or above age pension age, which is 65 (but incrementally moving towards 67 by 2023). You also need to receive (or be able to receive if you made a claim) an age pension or Veterans' Affairs payment. Another interesting qualifying stipulation is that you must not be locked up in prison.

For SATO and some other tax breaks however, how 'income' is defined has been given a tweak, and is now labelled 'rebate income'. It encompasses your taxable income, total reportable fringe benefits, total net investment losses and reportable super contributions (fully explained in the member section).

Being separated due to illness is a recognition of some of the realities of getting older, where infirmity or illness may force some couples to live apart. The Tax Office is aware that such situations can increase expenses, and so has boosted the amounts in these circumstances. You can also transfer any unused offsets from one partner to the other.

The low income tax offset is taken into account when calculating the income threshold for the senior Australians tax offset, and recognises that the low income offset reduces after income exceeds $30,000. The calculation of the SATO threshold incorporates the reduction in the low income offset.

Last reviewed 31/07/2012

NOTE: Various rebates and tax offsets apply to reduce an individual's income tax. Click here to access a table that summarises the 2011-12 and 2012-13 tax offsets for senior Australians, pensioners, mature age workers, medical expenses and tax offsets for low income earners.

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