This year’s Federal Budget is an ‘election budget’ with future tax cuts for all Australians, especially low and middle income earners. Overall, there were minimal changes to super proposed in the Budget, with minor changes to super contributions for older Australians.
We’ve summarised some of the key points from the Budget below, but remember these are subject to the passing of legislation.
From 1 July 2020, there will be no work test for people aged 65 and 66 when making concessional and non-concessional contributions. Currently, you need to work at least 40 hours over a 30 day period to contribute.
Also, the three-year bring-forward for non-concessional contributions is proposed to be extended to people aged 65 and 66 which means they could contribute up to $300,000 in non-concessional and $25,000 concessional contributions in one year.
From 1 July 2020, you can continue to receive spouse contributions up to age 74, up from age 69, if the work test is met. This will help couples even up their super balances as they near retirement.
In March 2019, the Protecting Your Super Package legislation passed. This means:
The proposal to ensure insurance is only offered on an opt-in basis for accounts with balances of less than $6,000 and new accounts belonging to members under the age of 25, did not pass into legislation. The Government will delay the start date for this measure until 1 October 2019.
The Government proposes the following personal income tax rates.
|Current threshold||Threshold from 1 July 2022||Threshold from 1 July 2024|
|0 - $18,200||0 - $18,200||0 - $18,200|
|$18,201 - $37,000||$18,201 - $45,000||$18,201 - $45,000|
32.5% until 30 June 2024
|$37,001 - $90,000||$45,001 - $120,000||$45,001 - $200,000|
|$90,001 - $180,000||$120,001 - $180,000||-|
Low and middle income tax offset (max)
Low income tax offset (max)
To help you estimate the tax benefits for your level of income, refer to the Government’s online calculator
The low and middle income tax offset (LMITO) will increase for the 2018/19 to 2021/22 financial years. After this, LMITO is not available. The maximum LMITO will increase from $530 to $1,080.
If you have a small or medium business, you can immediately deduct eligible assets costing less than $30,000. The assets must be first used or installed, ready for use, between 7:30pm (AEDT) on 2 April 2019 and 30 June 2020.
Assets acquired between 29 January 2019 and before 7:30pm (AEDT) on 2 April 2019 are subject to a $25,000 threshold and is limited to small businesses.
The instant asset write-off is expanded to medium businesses by increasing the annual turnover threshold from $10 million to $50 million.
Certain assets are not eligible, for example, horticultural plants and in-house software.
From 1 July 2018, the Medicare levy low income thresholds will be increased to reflect movements in the consumer price index (CPI).
As previously announced on 10 February 2019, the Government will provide funding for an additional 10,000 Home Care places over five years from 2018/19.