Australian Superannuation Income Stream Tax Offset

Superannuation Income

Taxpayers who receive income from an Australian superannuation income stream may be able to claim a tax offset amounting to 15% of the taxed element or 10% of the untaxed element.


If you are under 55, you cannot get an offset for the taxed element of your superannuation income stream unless it was from a disability superannuation benefit or a death benefit income stream.


Likewise, if you are under 60 you cannot claim an offset for the untaxed portion of your superannuation income stream unless the superannuation income stream was a death benefit income stream and the deceased died before they turned 60 years old.


The amount of the offset due is on your PAYG payment summary – superannuation income stream.

What is the Pensioner Tax Offset?

Like all tax offsets, the Pension Tax Offset can reduce outright the amount of taxes you owe. In order to claim it, however, you must receive an Australian Government pension or allowance, your income must be below a certain limit, and you cannot already have claimed the Senior Australians Tax Offset.


Eligible pensions and allowances include:
  • Newstart allowance
  • Youth Allowance
  • Austudy payment
  • Parenting payment (partnered)
  • Partner allowance
  • Sickness allowance
  • Special benefit
  • Widow allowance
  • Exceptional circumstances relief payment
  • Interim income support payment
  • Payment under the Veterans’ Children Education Scheme
  • Payment under the Military Rehabilitation and Compensation Act Education and Training Scheme 2004
  • Other taxable Commonwealth education or training payments
  • An income support component of a Community Development Employment Project (CDEP)
  • A CDEP scheme participant supplement


The income threshold for the Pensioner Tax Offset depends on your rebate income, which includes taxable income, adjusted fringe benefits, total net investment loss, and reportable superannuation contributions. Refer to the ATO for the income thresholds for your specific tax situation.


Starting 1 July 2012, the Pensioner Tax Offset (PTO) will merge with the Senior Australians Tax Offset (SATO) to form the Senior and Pensioner Tax Offset (SAPTO). Those previously eligible for the PTO will now be eligible for the new SAPTO.

What is the Senior Australians tax offset?

The Senior Australians Tax Offset, now part of the Senior Australians and Pensioners Tax Offset (SAPTO), is designed to provide a tax break for low-income, elderly Australians. In order to qualify for the tax offset, you must pass three tests related to age; income; and eligibility for Australian Government pensions.


For instance, if you are male, you must be
  • A non-veteran age 65 or older on 30 June 2016, or
  • A veteran or war widower age 60 or older on the same date.


And, if you are female, you must be
  • A non-veteran age 64 plus 6 months, or older, on 30 June 2016, or
  • A veteran or war widower age 59 plus 6 months, or older, on the same date.


If you are:

  • Single- your rebate income must be less than $50,119
  • Married- your combined rebate income must be less than $83,580.
  • If you and your spouse had to live apart- due to illness or because one of you was in a nursing home your combine rebate, income must be less than $95,198.
  • Rebate income threshold amounts are indexed each year

Who qualifies as a dependant?


A dependent can get you a variety of tax benefits, including valuable offsets. In order to claim someone as a dependent, that person must be:

  • An Australian resident for tax purposes
  • Your spouse
  • Your parent or your spouse’s parent
  • A child under 21 years old who is not a student
  • A student under 25 years old who is studying full time at school, college, or university
  • A child-housekeeper (your child who kept house for you full-time)
  • An invalid relative (your child or sibling) 16 years old or older


You may be required not just to have a dependent, but to maintain them as well. Maintaining a dependent involves any of the following:

  • Living with your dependent in the same house
  • Giving them food, clothing, or lodging
  • Helping them pay for living, medical, and educational costs