Should older Australians pay more tax?

The idea of taxing older Australians more might seem counterintuitive. Surely the older among us, having been taxed through their working lives, and facing potential age-related challenges have paid enough?

A new report from the Australian Council of Social Service (ACOSS) and the University of NSW has floated that idea. However, before you jump to any conclusions or instinctively kick back against the suggestion, let’s look at it in detail.

The report, Inequality in Australia 2024 is a joint undertaking of ACOSS and UNSW, and is described by the authors as “a companion piece to Inequality in Australia 2023: Overview”. The focus of the new companion piece is revealed in its subtitle: ‘Who is Affected and How’. 

It is within this framework we can find its examination of older Australians being undertaxed. 

How can further taxing of older Australians be a good thing?

ACOSS’s approach to the analysis is driven by its stated core aims: “To reduce poverty and increase opportunity.” Addressing inequality is key to achieving those aims, it believes, and this report identifies some of those inequalities. 

Some of them do indeed lie among the older Australian age groups. And ACOSS says the wealthiest older Australians are getting an easier ride when it comes to tax.

“In 2022-23, most of the wealth of older households was owned by a minority belonging to the highest 10 per cent of all households,” the report says. “By taxing the flow of income from investment assets, income tax can reduce wealth inequality.” However, “The wealthiest older households paid much lower rates of income tax than other age groups.”

While an imbalance in tax paid between younger and older Australians is understandable, ACOSS says, the low tax paid by the wealthiest of them is not. 

“Only 28 per cent of older households paid any income tax compared with 88 per cent of young households and 85 per cent of middle-aged households. One reason for this, of course, is the lower average incomes of older people, as discussed earlier.

“However, less expected was the low average tax rate for wealthy older households.” Here ACOSS is defining the wealthy as “those in the highest 10 per cent, whose average wealth was $5.6 million”. 

The average income tax rate for this high-end group of older Australians was 16 per cent, the report states. This compares with “28 per cent for both young and middle-aged households in the highest 10 per cent by wealth”. 

Furthermore, “Only 62 per cent of wealthy older households paid income tax.” This was a stark comparison to wealthy young households (91 per cent) and wealthy middle-aged households (93 per cent).

Taxing the right older people

So, while ACOSS does indeed float the concept of older Australians not paying enough tax, its focus is on the wealthiest. In particular, it points the finger at “concessional tax treatment of their main investments”. 

According to the report: “The low level of tax paid by older wealthy households (and their superannuation funds) is due in part to the higher tax-free threshold applying to older people (currently $33,000 compared to $22,000 for a person under 65 years), and to the concessional tax treatment of much of their investment income. This includes:

• the exemption from income tax of investment income from superannuation accounts paying pensions to individuals who have retired;

• the low rate of tax on capital gains (from growth in the value of assets such as shares and investment property).


Inequality in Australia 2024 outlines a number of policies that it says will reduce both income inequality and wealth inequality. These are detailed on page 23 of the report

And while ACOSS is suggesting that some older Australians should be paying more tax, it does not mean you, unless you are one of the 10 per cent with an average wealth of $5.6 million.

As an older Australian, do you believe you pay the right amount of tax? Should the richest 10 per cent pay more? Let us know via the comments section below. 

Also read: The ATO is reviving old tax debts, threatening some with bankruptcy

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Andrew Gigacz
Andrew Gigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.


  1. No they shouldn’t.

    They have paid tax all their lives. They lived through the most productive years for this country, worked long hours and gave up essentials. Remember when interest rates were 19%. The recession we had to have?

    Those that have saved, prioritized savings over smoking, gambling, alcohol drinking, holidays etc. They invested in housing to provide rental accommodation for those who didn’t buy a house. These folks didn’t skip school, studied hard and worked hard and bought second hand furniture and cars. They started businesses and employed people.

    Now the government wants to tax the very money they saved and earned over the years. All whilst the current generation want new things, the latest things and expect to not work. (the 4 day week? we had 6 days a week). The government has conned them, yes. The government encouraged them to get a worthless degree when there are no jobs. To rack up HECS debts. Then brought in boat loads of immigrants from poor countries to do the menial jobs the degreed people thought beneath them. Why the immigration? Because these folks are expected to vote Labor or Green. Remember the 30,000 lower social economic group of Lebanese now running the crime gangs in SW Sydney.

    Not many jobs advertised on Seek for degreed artists, librarians, political analysists, philosophers, historians, musicians……

    Tony Blair, Prime Minister of the UK. He was encouraged to bring in immigrants to dilute the population. they would argue amongst themselves and leave the government alone. The start of the woke agenda.

  2. Not the fault of those of us whom had to go without MANY non essential products to get through to retirement, the younger generations can’t control their bad spending habits, they need to get a reality check……

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