tax is paid on superannuation guarantee contributions.
Low-income health care card
In order to receive a low-income health care card your weekly gross income over an eight week period needs to be under certain income limits depending on your family circumstances. If you are single with no children you can earn up to $636 per week (or $1094 for a couple with no children). This increases to $1094 if you have one dependent child ($1128 for couples) and a further $34 for each additional child. You do not need to pass an assets test.
8 SENIOR AND PENSIONER TAX OFFSET
Senior Australians or pensioners may be eligible for an offset that allows them to earn more income before they have to pay tax and the Medicare levy.
As we saw earlier, if you are under the pension age (currently 66 and increasing to 67 in 2023 and 70 by 2035), you can earn an income of up to $21 884 before any tax is payable (see p. 15).
The tax rules get even better when you reach age pension age (or service pension age), as you may be able to access more generous tax-free thresholds, known as the senior and pensioner tax offset (SAPTO). Table 1.5 shows the thresholds for the SAPTO.
TABLE 1.5: thresholds for senior and pensioner tax offsets (SAPTO) (2021–22)
Source: © Australian Taxation Office for the Commonwealth of Australia.
| Maximum offset | Shaded-out threshold (taxable income)* | Cut-out threshold (taxable income) | |
|---|---|---|---|
| Single | $2 230 | $32 279 | $50 119 |
| Couple (each) | $1 602 | $28 974** | $41 790** |
| Couple (combined) | $3 204 | $57 948 | $83 580 |
| Couple (separated by illness) | $4 080 | $62 558 | $95 198 |
* Maximum offset reduced by 12.5 cents for each $1 in excess of shaded-out threshold.
** A taxpayer's taxable income is taken to be half the couple's combined taxable income.
Senior Australians are not required to pay any income tax if their income is below $32 279 for singles (or $28 974 each for couples). But if senior Australians derive income from a share portfolio they are encouraged to lodge a tax return, as they will receive a nice refund from all of the excess franking credits attached to their dividends.
If you're single, you can earn up to $32 279 (and $28 974 each for couples) in non-super income without paying a cent of tax because of the application of SAPTO and LITO. Any additional superannuation benefit that you receive from a taxed source is tax-free.
Senior Australians who are over Age Pension age but still participate in the workforce can keep more of their pension when they have earnings from working via the Work Bonus incentive. The Work Bonus allows an eligible pensioner to earn an extra $300 per fortnight from employment before it affects their pension rate. Single pensioners can effectively earn $478 per fortnight (being $300 from Work Bonus and the $178 income test free threshold) and still receive the maximum rate of pension.
Any unused part of the $300 fortnightly Work Bonus exemption amount can be accrued in a Work Bonus income bank, up to a maximum of $7800. The income bank amount is not time limited; if unused, it can carry forward into future years (although note that the maximum amount that could be accumulated in the Work Bonus income bank prior to 1 July 2019 was $6500).
Senior Australians who are not eligible for a pension due to their income or assets, may still be eligible for a Commonwealth Seniors Health Card provided that they continue to reside in Australia and their adjusted taxable income is below:
$55 808 a year if you're single
$89 290 a year for couples
$111 616 a year for couples separated by illness, respite care or prison
9 OTHER GOVERNMENT BENEF ITS
There are so many different types of government benefits these days that it is no wonder some families are confused, and aren't claiming everything that they should be entitled to. Most entitlements are means tested, which means the benefits you receive are reduced as your income increases.
If you're in doubt when estimating your annual income, it is always better to overestimate. It can be difficult to repay a debt to Centrelink if you have already spent the cash!
Family Tax Benefit Part A
This benefit helps with the cost of raising dependent children and dependent full-time students under the age of 18. The amount of the benefit is determined by your family income as well as the number and age of your dependants. It will only be paid up to the end of the calendar year that your teenager is completing school.
Family Tax Benefit Part B
Restricted to families where the primary earner has an adjusted taxable income under $100 000, this benefit provides extra assistance to families with one main income. The lower-earning parent can earn up to $5767 per annum before the benefit reduces. The Family Tax Benefit Part B fades out when the secondary earner receives more than $28 671 income per annum.
Parenting payment
This payment provides financial help for people who are the primary carers of children. It is means tested on both your income and assets.
JobSeeker Payment
If you are unemployed, looking for work and aged between 22 and the Age Pension
