How much tax I have to pay as a pensioner?

For those who have reached age pension age, they can earn some income without paying the full tax. If you fit this category and are entitled to the senior and pensioners’ tax offset, you are able to earn each year as a pensioner before having to pay tax. The thresholds and conditions are listed below:

Rebate income thresholds for SAPTO

  Column 1 Column 2
Seniors and pensioners Maximum tax offset threshold Cut-out threshold
Single $32,279 $50,119
Each member of a couple $28,974 $41,790
Each member of an illness-separated couple $31,279 $47,599

If you are a pensioner and also earn an income, you may claim or vary the seniors and pensioners tax offset (SAPTO) if you meet certain conditions relating to (1) eligibility for Australian Government pensions or allowances and (2) income:

Condition 1:  Eligibility for an Australian Government age pension or similar type of payment

To meet this condition, you must fit into one of the following categories:

    1. You are receiving an Australian Government age pension or allowance from Centrelink, or a pension, allowance or benefit from the Department of Veterans’ Affairs, at any time during the 2014–15 financial year.
    2. You meet the Centrelink age pension age requirement and would be eligible for an Australian Government age pension, but are not receiving one because you have not made a claim or because of the application of the income test or the assets test and you satisfy one of the following:
      • you have been an Australian resident for age pension purposes for 10 years or more, of which at least five years were continuous
      • you have a qualifying residence exemption because you arrived in Australia as a refugee or under a special humanitarian program
      • you are a woman who was widowed in Australia (at a time when both you and your late partner were Australian residents), you have made a claim for the age pension, and you had two years residence immediately before your claim
      • you received a widow B pension, widow allowance or partner allowance immediately before turning age pension age
      • you would qualify under an international social security agreement.
    3. You meet the veteran pension age test and would be eligible for a pension, allowance or benefit from Veterans’ Affairs but are not receiving one because you have not made a claim or because of the application of the income test or the assets test, and you are either a:
      • veteran with eligible war service
      • Commonwealth veteran, allied veteran or allied mariner with qualifying service.
  • Veteran pension age test
  • You meet the veteran pension age test if one of the following applied to you and you were eligible for a pension, allowance or benefit under the Veterans’ Entitlements Act 1986:
    • you have eligible war service – that is, service in World War II or operational service as a member of the Australian Defence Force
    • you are a Commonwealth or allied veteran who served in a conflict in which the Australian Defence Force was engaged during a period of hostilities – that is, World War II, or in Korea, Malaya, Indonesia or Vietnam
    • you are an Australian or allied mariner who served during World War II
    • you are the war widow or widower of a former member of the Australian Defence Force.
  • ‘Pension, allowance or benefit’ includes:
    • disability pension
    • service pension, and
    • white or gold Repatriation health cards for treatment entitlements.
  • If you need help working out your eligibility for:

Condition 2: Rebate income threshold

Rebate income threshold

Your rebate income is used to determine your eligibility for the SAPTO. Your rebate income includes your:

    • taxable income
    • adjusted fringe benefits (reportable fringe benefits multiplied by 0.535)
    • total net investment loss (this includes both net financial investment loss and net rental property loss)
    • reportable super contributions (this includes both reportable employer super contributions and deductible personal super contributions).
DISCLAIMER
Kasker Associates website is to provide information of general interest to their clients. The content of this website does not constitute specific advice. Readers are encouraged to consult their tax adviser for advice on specific matters.