Many Australian retirees do not need to lodge an income tax return. The ATO allows certain low-income individuals — including retirees and pensioners — to claim a no-lodgement exemption if their income falls below specified thresholds. Whether you need to lodge depends on your income sources, the amounts involved, and whether any tax was withheld from your payments.
The ATO’s No-Lodgement Thresholds for Retirees
The ATO publishes annual income thresholds below which eligible seniors and pensioners do not need to lodge a tax return. For FY2024–25, a retiree generally does not need to lodge if:
| Status | Income threshold (approx.) |
|---|---|
| Single (eligible for SAPTO) | ~$32,279 |
| Couple — each (eligible for SAPTO) | ~$28,974 per person |
| Illness-separated couple — each | ~$32,279 per person |
These thresholds reflect the point at which SAPTO and LITO together eliminate all income tax payable. Below these thresholds, a retiree’s tax payable is zero, and no refund is available either — so lodging serves no financial purpose.
If you are under 67 (not yet Age Pension age), the standard no-lodgement thresholds apply instead — approximately $18,200 for a single person (the standard tax-free threshold) plus any applicable LITO amount.
When Retirees Must Still Lodge
Even if your income is below the threshold, you must still lodge a tax return if:
- Tax was withheld from any income during the year (you need to lodge to get a refund)
- You received a government payment that is taxable and the payment summary shows tax withheld
- You have a HECS-HELP debt and your income exceeds the repayment threshold
- You have capital gains from selling shares, property, or other assets during the year
- The ATO sends you a notice that you are required to lodge
- You are lodging on behalf of a deceased estate
- You had foreign income or trust distributions
Income Sources and Tax Treatment
Understanding what counts as assessable income is critical for retirees:
| Income source | Generally taxable? | Notes |
|---|---|---|
| Age Pension | Yes | Included in assessable income, but may attract SAPTO |
| Super pension (age 60+, taxed fund) | No | Tax-free, not included in assessable or rebate income |
| Account-based pension (under 60) | Partially | Taxable component is assessable |
| Dividends | Yes | Included in assessable income; franking credits may offset tax |
| Bank interest | Yes | Included in assessable income |
| Rental income | Yes | Net rental income included |
| Employment income (part-time work) | Yes | Fully assessable |
| Capital gains | Yes | Must lodge if you have a net capital gain |
The Age Pension Is Taxable — But Usually Attracts No Tax
The Age Pension is included in your assessable income. However, for most single pensioners, the combination of:
- SAPTO (up to $2,230), and
- LITO (up to $700), and
- The tax-free threshold ($18,200)
… means the effective tax-free threshold for an eligible single pensioner is approximately $32,279. The maximum full-rate single Age Pension is around $28,000–$29,000 per year (FY2024–25), which falls below this effective threshold. As a result, most full-rate pensioners pay no income tax.
How to Notify the ATO You Are Not Lodging
If you are not required to lodge, you should still notify the ATO. You can:
- Submit a “Non-lodgement advice” form through myGov/myTax
- Contact the ATO on 13 28 61
- Ask a registered tax agent to lodge a non-lodgement advice on your behalf
Failing to notify the ATO may result in the ATO following up or assuming you have not lodged a required return.
Related Articles
- SAPTO — Seniors and Pensioners Tax Offset Explained
- Low Income Tax Offset (LITO) — How It Works
- Tax Offsets hub
- Taxes hub
Frequently Asked Questions
I receive only the Age Pension and bank interest. Do I need to lodge? If your total taxable income is below the SAPTO no-lodgement threshold (approximately $32,279 for a single person eligible for SAPTO) and no tax was withheld from any payment, you do not need to lodge. However, if the bank withheld any interest withholding tax (which can happen if you did not provide your TFN to the bank), you should lodge to reclaim it.
My spouse passed away during the year. Do I still need to lodge? Yes — you need to lodge a tax return for a deceased person for the year they died, up to the date of death. A legal personal representative or administrator of the estate typically does this. The ATO has specific rules for deceased estates.
I am 70 and have stopped working. I still have a small share portfolio. Do I need to lodge? If your dividend income plus any other taxable income exceeds the no-lodgement threshold, or if you sell any shares and make a capital gain during the year, you will need to lodge. Franking credits attached to your dividends may actually result in a refund, making lodging financially worthwhile even if not strictly required.
This article provides general tax information only. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register or visit MoneySmart.