The Beneficiary Tax Offset (BTO) may be available to a taxpayer who receives certain Centrelink benefits and Commonwealth education allowances. These are called the “taxable benefit”.
Common taxable benefits that qualify for the offset include: Austudy, CDEP, Mature Age Allowance, Newstart Allowance, Parenting Payment (partnered), Partner Allowance, Sickness Allowance, Special Benefit, Widow Allowance and Youth Allowance.
Of course, there are also a number of allowances and benefits which are not taxable; these do not qualify as a ‘taxable benefit’. Nor does parental leave pay qualify you for the Beneficiary Tax Offset.
How much is the Beneficiary Tax Offset?
For the 2016-17 financial year the Beneficiary Tax Offset is calculated as follows:
|0 - 37,000||0.15 x (taxable benefits - $6,000)|
|37,001 and above||[0.15 x (taxable benefits - $6,000)] +
[0.15 x (taxable benefits - $37,000)]
It’ is important to note that this tax offset will only reduce your tax, it does not reduce any Medicare Levy you may have to pay.
Claiming the Offset
In order to claim the offset, be sure to enter the government payment you have received at the correct item on your income tax return. The Tax Office will then calculate the offset for you when when they process your return.
The Tax Office have an online Beneficiary Tax Offset Calculator available from their website. You can use this calculator to work out the beneficiary tax offset that you can claim.
The application does have some limitations and cannot calculate your tax offset if you were a part-year resident.