Seniors and Pensioners Tax Offset (SAPTO)

What SAPTO does

SAPTO reduces the income tax an eligible senior or pensioner has to pay. It is an offset, not a deduction, so it comes off the tax bill itself rather than off taxable income. It is also non-refundable, which means it can take tax payable down to zero but cannot turn into a cash payment on its own. The ATO applies the offset when it assesses your return, so there is no amount to calculate and no separate claim beyond answering the SAPTO question in the return.

The SAPTO threshold for 2026-27

There are two thresholds, not one, and the difference decides whether you get the full senior tax offset or a reduced one. You get the full offset below the shading-out threshold, a reduced offset between the two figures, and nothing at or above the cut-out threshold. For a single person in 2026-27 those figures are $36,034 and $53,874 of rebate income.

The ATO published a revised SAPTO table for 2026-27 because the lowest marginal rate falls to 15% from 1 July 2026. The maximum offset amounts did not change; the income thresholds did.

Between the two thresholds the offset reduces by 12.5 cents for every dollar of rebate income above the shading-out figure, rounded up to the nearest dollar. That taper rate is set out on the ATO SAPTO page cited below.

Who is eligible

Two conditions have to be met, and both of them, not either one.

• Pension or allowance eligibility. Only the payments the ATO lists count: Age Pension, Carer Payment, Disability Support Pension if you are age pension age, Education Entry Payment, Parenting Payment (single), age service pension, income support supplement, Veteran Payment, invalidity service pension if you are age pension age, and partner service pension. The ATO also accepts people who reached age pension age and were eligible for the age pension but did not receive it, subject to residency conditions. Self-funded retirees usually qualify through that second route. You cannot claim it if you were in jail for the whole income year.
• Income. Your rebate income has to fall under the relevant limit. Rebate income is taxable income plus adjusted fringe benefits, total net investment loss and reportable super contributions, the same family of add-backs defined in the glossary.

The single and couple distinction matters twice over. Eligibility for a member of a couple is tested on the combined rebate income of both partners, but the offset you actually receive is worked out on your own rebate income. One partner can be entitled to the full $1,602 while the other gets nothing, and the ATO publishes worked examples of that outcome. Couples who have to live apart because of illness or a nursing home stay use their own higher set of figures.

The effective tax-free threshold

SAPTO stacks on top of the $18,200 tax-free threshold and the low income tax offset, so an eligible senior can hold taxable income well above $18,200 and still have no income tax to pay. The ATO does not publish a single headline figure for that point, because it depends on your status, your spouse's position and any unused offset transferred between you. The SAPTO calculator works out that point for a single senior in both 2025-26 and 2026-27. The ATO's own calculator, linked in the sources, covers income years up to 2025-26 only. Compare either against the 2026-27 tax brackets.

SAPTO and the Medicare levy

Being entitled to at least $1 of SAPTO also gives you a higher Medicare levy low-income threshold: $44,268, with a reduced levy applying up to $55,335, well above the $28,011 and $35,013 figures that apply to everyone else. If your SAPTO entitlement shades out to zero, the higher Medicare threshold goes with it. The Medicare Levy Act applies these figures to the 2025-26 income year and later years, so they also hold for 2026-27. They were set for 2025-26 and are not a 2026-27 increase. The SAPTO calculator applies the senior threshold for a single person; our Medicare levy guide and the other calculators use the general thresholds.

SAPTO is not the seniors health card

The Commonwealth Seniors Health Card is a concession card issued by Services Australia that gives cheaper prescriptions and other concessions once you reach age pension age and pass its own income test. SAPTO is a tax offset applied by the ATO inside your income tax return. Different agency, different test. Holding the card does not give you SAPTO, and receiving SAPTO does not give you the card. Check your withholding on the PAYG calculator separately.

Common questions

Sources

Each page below was retrieved on 28 July 2026 and returned a live response. The income year each figure applies to is noted.

• ATO: Personal income tax, new tax cuts for every Australian taxpayer (ATO last updated 13 May 2026). Source of the table above, headed "SAPTO rates and rebate income thresholds for 2026-27".
• ATO: Seniors and pensioners tax offset (ATO last updated 8 June 2026). Source of the eligibility conditions, the 12.5 cent shading-out rate, the non-refundable treatment and the transfer of unused SAPTO between spouses. The rates table on that page carries the 2025-26 figures.
• ATO: T1 Seniors and pensioners tax offset 2026 (ATO last updated 30 May 2026). Source of the two eligibility conditions as applied to the 2025-26 income year, and the age pension age of 67 on 30 June 2026.
• ATO: Medicare levy reduction for low-income earners (ATO last updated 30 June 2026). Source of the $44,268 and $55,335 SAPTO Medicare levy thresholds, which apply for 2025-26 and later years.
• ATO: Beneficiary tax offset and seniors and pensioners tax offset calculator . The ATO tool for eligibility and the offset amount, covering income years up to 2025-26.
• Services Australia: Commonwealth Seniors Health Card (page last updated 1 December 2025). Source of the health card conditions.

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