A tax offset reduces the amount of tax you pay on your taxable income. Most offsets are non-refundable, meaning they cannot reduce your tax liability below zero. However, some offsets, like the private health insurance tax offset, are refundable. The ATO automatically calculates certain tax offsets when you submit your tax return, while others need to be claimed in the Offsets section of your return.

Types of Offsets

As a taxpaying individual, you may be eligible for the following offsets:

• Seniors and Pensioners Tax Offset (SAPTO): You may qualify for this offset if you receive an Australian Government pension or allowance and meet the income limits for yourself and your spouse.
• Beneficiary Tax Offset: This offset is available if you are receiving certain Australian Government payments and allowances while also paying tax.
• Private Health Insurance Tax Offset: To claim this offset, you must have private health insurance (PHI). Your entitlement depends on the age of the oldest person covered by your policy and your income (or family income if you’re part of a couple). The offset can be claimed as a reduction in your PHI premium.
• Invalid Tax Offset: You may be eligible for this offset if you support an invalid person aged 16 or older who receives certain government payments. The invalid person must be your spouse, child, sibling, parent, or your spouse’s relative. This offset is not available if your adjusted taxable income (and your spouse’s, if applicable) exceeds $112,578 for the 2023–24 financial year.
• Invalid Carer Tax Offset: You may qualify for this offset if you support an invalid carer who is your spouse, parent, or your spouse’s parent, and they care for you or your spouse’s invalid child or sibling aged 16 or older who receives certain government payments. The same income test as the invalid tax offset applies.

Other available tax offsets include:

• Superannuation Income Stream Tax Offset: If you receive income from an Australian superannuation income stream.
• Zone Tax Offset: If you live in a remote area of Australia.
• Overseas Forces Tax Offset: If you are a member of the Australian Defence Force or a United Nations armed force serving in specified overseas locations.
• Lump Sum in Arrears Tax Offset: If you receive a lump sum payment in arrears, typically related to employment, compensation, or welfare payments.
• Foreign Income Tax Offset (FITO): For foreign tax paid in another country.