What is the tax treatment of Australian age pension when living abroad?

 Author: BlakeATO(Community Support)Community Support

ATO Certified Response5 Dec 2021

Hi @bob1306

Not quite.

As an Australian resident for tax purposes, you would pay income tax according to resident rates. This means you'd be eligible for the tax-free threshold up to $18,200, and your tax on the income between $18,200 and $45,000 would be 19c per dollar. You would need to report and pay tax on your worldwide income, not just the age pension.

As a foreign resident for tax purposes, you will pay income tax according to foreign resident rates. This means for all income under $180k, you'll pay 32.5c per dollar. You would only report and pay tax on your Australian-sourced income to us.

You'll likely be eligible for the seniors and pensioners tax offset (SAPTO) though, meaning you'll get a tax offset to help counter the tax payable. You don't have to be a resident for tax purposes to receive this.

You can read about individual income tax rates and SAPTO on our website.

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