A tax offset reduces the tax you pay on your taxable income. Most offsets aren’t refundable, which means they can’t reduce your tax below zero. However, some (such as the private health insurance tax offset) are refundable.
The ATO will calculate some tax offsets automatically when you lodge your tax return. You need to claim others in the Offsets section of your tax return.
Types of offset
The following offsets may be available to you as a taxpaying individual:
Seniors and pensioners tax offset (SAPTO) – you may be eligible for this if you receive an Australian Government pension or allowance and you meet income limits for you and your spouse.
Beneficiary tax offset – you must be receiving certain Australian Government payments and allowances, and pay tax, to receive the beneficiary tax offset.
Private health insurance tax offset – you must have private health insurance (PHI) to claim the private health insurance offset. Your entitlement depends on the age of the oldest person your policy covers and the amount of your income (or family income, if you’re part of a couple). The amount of the offset can be claimed by way of a reduction in your PHI premium.
Invalid tax offset – you may be eligible for the invalid tax offset if you maintain an invalid person who is at least 16 years old and receives certain government payments. The invalid person must be your spouse, child, sibling or parent or your spouse’s child, sibling or parent. The offset is not available if your – and, if relevant, your spouse’s – adjusted taxable income for 2023–24 totals more than $112,578. Invalid carer tax offset – you may be eligible for the invalid carer tax offset if you maintain an invalid carer who is your spouse, parent or spouse’s parent and they care for you or your spouse’s invalid child or sibling who is 16 years old or older (and who receives certain government payments). The same income test as for the invalid tax offset must be satisfied.
Other tax offsets include the: superannuation income stream tax offset – if you receive income from an Australian super income stream; zone tax offset – if you live in a remote area of Australia; overseas forces tax offset – if you are a member of either the Australian Defence Force or a United Nations armed force and you serve in a specified overseas locality; lump sum in arrears tax offset – if you receive a lump sum payment in arrears (which usually relates to employment, compensation or welfare payments); and foreign income tax offset (FITO) – for foreign tax paid in another country.
Speak to one of our accountants if you have any questions about the changes in tax for 2024.
