Need to know

The Treasurer, Josh Frydenberg, delivered the 2022/2023 Federal Budget on 29 March 2022. 

The following resources may assist:

• Federal Budget analysis
• Insignia Adviser Presentation
• Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022

The ATO has released several important superannuation rates and thresholds for the 2022/2023 financial year.

There will be no change to either the concessional or non-concessional contribution cap limit. 

Key changes includes an increase in the CGT cap amount, low rate cap, untaxed plan cap amount and others.

It may be necessary to update superannuation recommendations for the new financial year in the context of these rate thresholds and other changes from 1 July 2022.

In addition, it may be necessary to update affected assumptions in any financial modelling tools.

Many Centrelink rates and thresholds were updated on 20 March 2022. 

It will be necessary to apply these new rates and thresholds when estimating Centrelink entitlements from 20 March 2022.

Many Aged Care fees and charges were indexed on 20 March 2022. The Department of Health have also released subsidies and supplements that apply from 20 March 2022.

Client fees relating to residential Aged Care and Home Care may change from 20 March 2022.

In addition, the maximum permissible interest rate for residential aged care will increase on 1 April 2022 to 4.07%. For current and past interest rates see here.

The quarterly review is a reconciliation process which: 

• aligns the fees a care recipient pays with the fees associated with their care needs and changes to their financial circumstances 
• incorporates any indexation into the fees that care recipients are asked to pay (usually in March and September each year)
• includes any changes made during the quarter that relate to an historical event (eg the sale of an asset within a previous quarter that the Department has not been notified of until a later date). 

The feature of the Pension Loans Scheme is that borrowers can remain living in their family home without having to sell their property and they do not have to repay the loan during its term.

Retaining their home may carry Centrelink concessions such as main residence exemption and may have sentimental and estate planning advantages.

The Bill will give effect to many of the measures announced in Tuesday’s Federal Budget such as the: 

• $250 cost of living payment
• Increase in the low and middle income tax offset
• Reduction in the Fuel Excise Tariff
• Amendments to the Employee Share Scheme
• Amendments to the Medicare Levy and Medicare Levy Surcharge income thresholds.

For further commentary on the Federal Budget and what it means for your client please see our:

• Federal Budget analysis
• Insignia Adviser Presentation