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I am currently 66 years old, due to turn 67 at the end of April 2026, my wife is currently 63 due to turn 64 in August 2025. We are both retired, living mainly on our pensions from our Super. I have around $1 Mill all in Pension Mode, and another $350K in Australian shares, with around $40K in bank mainly earning 3.5%. ( I have just noticed that Macquarie bank seem to be offering 4.5% interest on an at call savings account with almost no fine print conditions, so i will explore that now) My wife has around $800K in pension mode with approx $30K still in Super mode as she is expecting to receive approx $50K as an early inheritance from her widowed mother.
I am in the process of selling $70K of shares to boost my bank account up to your recommended 2-3 years of expenses, around $100K to $120K . Most of the shares will be subject to Capital gains on selling them. The $350K in shares produce a gross income of just under $18K with around $5K in franking credits, then when you add in bank interest of just under $2K this leaves me room for around $4K of taxable capital gains before I start paying significant amounts of tax. I generated around $8K of gross capital gains ($4K of Taxable Capital Gains) in 2024-2025. All the shares sold I have owned for more than 365 days. For example in the 2024-2025 year I estimate my total taxable income will be around $24K with a net tax bill of $228.00. This tax will of course be well covered by the $5K in franking credits from the share dividends.
Finally to my question! Am I able in this current tax year of 2025-2026 to access any of the Seniors & Pensioners Tax Offset (SAPTO) credit, as I only turn 67 near the end of the financial year?
I realise the amount of SAPTO you are eligible for declines as your income exceeds $33K.
Also it declines based on your spouse’s rebate income. My understanding of the rebate income is it Does NOT include the amount received from a pension from Superannuation, is this correct?
Also I am unclear whether my wifes rebate income is included in the ATO calculations as she is well below 67 years old.
On the ATO website all the examples they list covered couples who were both eligible for SAPTO, none of the examples I could find included a spouse who was younger than 67.
My wife in the 2025-2026 year will only earn around $2,500 in bank interest & share dividends.
Answer
The SATO thresholds and rate may change a little before 30th June 2026. I have calculated using the 2024-2025 rates.
In direct answer to you question you get to utilise SATO for the whole financial year in which you turn 67. Your wife does not qualify for SATO but her income can reduce your entitlement. Even though you are the only one qualifying for SATO, as a married man you are only entitled to the $1,602 amount.
Your superannuation pensions do not affect anything.
So with your wife only receiving a taxable income of $2,500 and you receiving $24,000 you will get your full $5,000 in franking credits back. You would also have wasted $1,374 of your SATO. You are absolutely right your tax bill would be $228 after utilising the $700 low income tax offset. $1,602 – $228 = $1,374 of unused SATO.
If you add to your $24,000 a capital gain of $4,000 after the discount your taxable income will be $28,000. SATO still means you get your full $5,000 in franking credits back but you have still wasted $734 of your SATO.
As your income increases SATO starts to shade out. The sweets spot where you will still get your $5,000 in franking credits back is $31,888 which is $7,888 in capital gains after the discount ($15,776 gross)
Note the franking credit is included as taxable income too. So if you receive a $7,000 cash dividend fully franked that means you are entitled to a franking credit of $3,000. So your taxable income is increased by $10,000 for the dividend.
If you have been dividend reinvesting the CGT calculation gets a bit messy. It is wise to keep a tally of the number of shares received on each reinvestment so you can see if the total matches the total number of shares you sold. Making sure you don’t miss any. I attach a spreadsheet that you might find useful. It is from our Getting Your Affairs in Order Package.
Please note this answer is limited by the information you have provided and should not be relied upon without further professional advice on your particular circumstances.
