Transferring the seniors and pensioners tax offset

The Seniors and Pensioners Tax Offset (SAPTO) is a tax offset for retirees who are at the Service Pension age or the Age Pension age or older.

Those who have received SAPTO may be eligible to transfer unused portions of their offset to their spouse.

When transferring unused SAPTO, both the receiving individual and their spouse must be eligible to claim the offset and be an eligible couple either:

• living apart due to illness with a rebate amount of $2,040 each

• living together with a rebate amount of $1,602 each

If an individual receiving SAPTO has a spouse with a taxable income greater than $6,000, the ATO calculates their unused SAPTO amount with the formula:

The spouse’s rebate amount for the year – ((The spouse’s taxable income for the year – $6,000) x 0.15).

If an individual receiving SAPTO has a spouse who is a foreign resident and their taxable income is greater than zero, the ATO calculates the spouse’s unused SAPTO amount with the following formula:

The spouse’s rebate amount for the year – (The spouse’s taxable income for the year x marginal tax rate).

If a spouse is a foreign resident and has received an Australian government pension or allowance, the ATO calculates the spouse’s unused SAPTO amount as if they were a resident.