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Claiming tax offsets and rebates

Tax offsets (also known as ‘rebates’) can directly reduce the amount of tax payable on a person’s taxable income. While claiming certain tax offsets can reduce a person’s tax payable to zero, on their own, they cannot create a tax refund.

Here are three common types of tax offsets some individuals are eligible to claim:

Health insurance
A person’s entitlement to a private health insurance rebate or tax offset depends on their income level. For those who have private health insurance:
You can claim your private health insurance rebate as a premium reduction, which lowers the policy price charged by your insurer, or as a refundable tax offset through your tax return.

Low-income earners
Some Australians may be eligible for a tax offset if they are considered to be a low-income earner and are an Australian resident for income tax purposes.The offset can only reduce the amount of tax they pay to zero and it does not reduce their Medicare levy.

If your taxable income is less than $66,667, you will get the low-income tax offset. The maximum tax offset of $445 applies if your taxable income is $37,000 or less. This amount is reduced by 1.5 cents for each dollar over $37,000.

If you are under 18 as at 30 June of the income year and you have unearned income, your low-income tax offset cannot reduce the tax payable on this income.

Seniors and pensioners tax offset
Senior Australians may be eligible for the seniors and pensioners tax offset (SAPTO). The SAPTO can reduce the amount of tax you are liable to pay. In some cases, it may reduce your tax liability to zero and you may not have to lodge a tax return.

To be eligible for this tax offset, you have to meet certain conditions relating to your income and eligibility for an Australian Government pension or allowance. If you’re a senior, you must meet the age requirement for the Age pension. This includes if you qualified for the Age pension, but did not receive it.

Posted on 7 November '16 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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