Senior Australians and Pensioners Tax Offset (SAPTO)
A tax offset of up to $2,230 (single) for eligible seniors and pensioners, effectively raising the tax-free income level.
The Senior Australians and Pensioners Tax Offset (SAPTO) is a non-refundable tax offset available to eligible older Australians who receive a qualifying government pension or allowance, or who meet the age requirements for the Age Pension (even if they don't receive it). For 2025–26, SAPTO provides up to $2,230 for singles and up to $1,602 for each member of a couple.
To be eligible, you must meet the age requirement (67 or older), satisfy the income test, and either receive a qualifying government pension/allowance or meet the Age Pension age but not receive a pension. Combined with the tax-free threshold and LITO, SAPTO means eligible singles can earn up to approximately $33,532 before paying any income tax, and couples can earn up to about $29,783 each.
SAPTO phases out as your rebate income increases. For singles, it reduces by 12.5 cents for every dollar of rebate income above the shade-out threshold. Rebate income includes taxable income plus some additional amounts like reportable super contributions, net investment losses, and certain tax-free government pensions. This can make SAPTO calculations complex for retirees with diverse income sources.