BUDGET REVIEW
SUPERANNUATION
i. The SG rate will increase from 9.25% to 9.5% from 1 July 2014 as currently legislated. The rate will remain at 9.5% until 30 June 2018 and then increase by 0.5 percentage points each year until it reaches 12% in 2022-23.
ii. The Low income super contribution (LISC) looks set to be abolished
iii. The Excess non-concessional contributions tax non imposed will be repealed allowing individuals who have breached the contributions cap to now pull out the excess funds and be tax at their marginal rate instead of 46.5%
TAXATION
i. From 01 July 2014 the individuals with a taxable income over $180,000 will pay an extra 2% tax for 3 years until 30 June 2017, effectively tax their tax rate from 45% to 47%.
ii. REMINDER – There is also the increase to the Medicare levy from 1.5% to 2% starting 01/07/2014.
iii. Fringe Benefits Tax to rise to 49% from 01 April 2015 to 31 March 2017 in line with the tax increase.
iv. From 01 July 2013 the Low income level for Medicare will increase to $34,367 for couples with no children and increase by $3,156 for each child.
v. From 01 July 2015 the Company tax rate will fall to 28.5%.
vi. From 01 July 2014 the Dependent Spouse Offset and Mature Age Workers Offsets will be abolished.
vii. The Medicare Levy Surcharge & Private Health Insurance rebate will not be indexed for 3 years starting 01 July 2015.
viii. From 01 July 2015 the First home Savers Accounts will be abolished.
PENSION
i. From 1 July 2025, the Age Pension qualifying age will continue to rise by six months every two years, from the qualifying age of 67 years that will apply by that time, to gradually reach a qualifying age of 70 years by 1 July 2035.
ii. Currently, the deeming thresholds are $46,600 for singles, $77,400 for pensioner couples and $38,700 for members of allowee couples. From 20 September 2017, the deeming thresholds for means tested payments will be reset to $30,000 for singles and $50,000 for couples (for both pensioners and allowees).
iii. From 01 July 2014 there will be changes to the Disability Support Pension for recipients under 35.
iv. From 01 September 2017, certain social security payments will now only rise in line with CPI and not the higher of the rates like previously.
v. From 01 July 2014 Family Tax Benefits, Child care rebate, Newstart, Parenting payment & Youth Allowance indexation will be frozen for 3 years.
vi. From 01 July 2017 Age Pension, Carer Payments, Disability Support Pension & Department of Veterans indexation will also be frozen for 3 years.
OLDER AUSTRALIANS
i. Untaxed superannuation income will be included in the assessment of income to determine eligibility for the Seniors Health Card (SHC) from 1 January 2015.
ii. Under a new program named Restart, a payment of up to $10,000 over two years will be available to employers who hire an eligible mature age job seeker aged 50 years that were previously unemployed for 6 months.
iii. The Government will remove the Seniors Supplement for holders of the SHC.
FAMILIES
i. From 01 July 2015 the government will provide paid parental leave for 26 weeks based on pre-birth earnings up to an annual cap of $100,000 including superannuation payments, a payment of up to $50,000 including super over the 26 week period.
ii. Indexation of Family Tax Benefits (FTB) payment rates will be frozen for two years until 1 July 2016.
iii. The end of year supplement for both FTB Part A and Part B will decrease. The Part A supplement will fall from $726.35 to $600.00 per child pa whilst the Part B supplement will fall from $354.05 to $300.00 per family pa. Indexation of these supplements will also cease from 1 July 2015
iv. FTB Part A – From 1 July 2015 the $3,796 per child add-on to the allowed income will cease.
v. From 1 July 2015, The 3rd Child payment increase will now move to the fourth child.
vi. FTB Part B, from 01 July 2015 the current primary income earner limit of $150,000 pa will reduce to $100,000 pa.
vii. From 01 July 2015 single parent families on the maximum rate of FTB Part A will receive $750 pa for each child aged between six and 12.
OTHER
i. From 01 July 2015 a patient contribution of seven dollars is proposed for each visit to a doctor (GP), out-of-hospital pathology and diagnostic imagery services.
ii. The Government is reintroducing indexation of fuel excise from 1 August 2014 with the goal of securing more stable funding for additional road infrastructure projects.
iii. The government will adjust the indexation of HELP debts. From 1 June 2016 HELP debts will be indexed to a rate equivalent to the yield on 10 year Australian Government bonds capped at six per cent pa.
iv. For 2013-2014, clients are not required to make compulsory HELP repayments unless their adjusted taxable income exceeds $51,309. From 2016-2017, a new minimum threshold will be established and set at 90% of the minimum threshold that would have previously applied. The estimate for 2016-2017 is $50,638.
