Families are affected by this years Federal Budget. Naomi Alleston from Achievit Financial Planning tells us how.
Budget
measures and announcements – learn how the Federal Budget will impact your
family finances.
Taxation
Effective
1 July 2012 (already legislated)
Changes to Income Tax
Rates
Following the
introduction of the Carbon Tax, it was announced that the personal income tax
rates would change by adjusting the rates and the low income tax offset to
create a higher effective tax-free threshold.
This achieves tax
savings for anyone earning $80,000 or less. Those individuals earning more than
$80,000 will not be affected.
Australian Resident Rates
Tax
Thresholds
|
2011/12
Threshold
|
Rate
|
2012/13
Threshold
|
Rate
|
2015/16
Threshold
|
Rate
|
1
|
$6,001 – $37, 000
|
15%
|
$18,201 - $37,000
|
19%
|
$19,401 - $37,000
|
19%
|
2
|
$37,001 – $80, 000
|
30%
|
$37,001 – $80,000
|
32.5%
|
$37,001 - $80,000
|
33%
|
3
|
$80,001 – $180,000
|
37%
|
$80,001 - $180,000
|
37%
|
$80,001 - $180,000
|
37%
|
4
|
$180,001 & above
|
45%
|
$180,001 & above
|
45%
|
$180,001 & above
|
45%
|
Low Income
Tax Offset
(LITO)
|
$1,500
|
#4% above
$30,000
|
$445
|
#1.5% above
$37,000
|
$300
|
#1% above
$37,000
|
Effective tax
free threshold
|
$16,000
|
|
$20,542
|
|
$20,979
|
|
# Rate at which LITO
reduces above threshold
Net
Medical Expense Tax Offset – Income Test
Effective
from 1 July 2012
Currently, people who
incur more than $2,060 of net medical expenses (after Medicare and private
health fund refunds) receive a 20% tax offset on the balance above $2,060.
For individuals with an
adjusted taxable income above $84,000 (families $168,000), the $2,060 cap will
increase to $5,000 with the rate of reimbursement to drop to 10% for eligible
out of pocket expenses.
People with income below
$84,000 will continue to access the $2,060 cap.
Social Security and welfare payments
Schoolkids
Bonus
Effective
from 1 January 2013
The Government will replace the Education Tax
Refund (ETR) with a Schoolkids Bonus to be paid as two equal instalments in
January and July each year. Families in receipt of Family Tax Benefit Part A
(FTB A) will be paid:
• $410 p.a. for each
primary school student, and
• $820 p.a. for each secondary school student
All eligible families will receive the full
rate of payment. As a result, families are no longer required to retain
receipts as proof of purchase or wait until they submit their tax return. Hooray!
Changes
to Family Tax Benefit Part A
Effective
from 1 July 2013
The Government will increase the maximum
payment of FTB A by:-
• $300 p.a. for
families with 1 child, and
• $600 p.a. for families with 2 or more
children
For families receiving the base rate of FTB
A, the increase will be:-
• $100 p.a. for
families with 1 child, and
• $200 p.a. for families with 2 or more
children
For example, a family with two children under
the age of 12 will receive a $600 boost, up to a family adjusted taxable income
of around $78,000 p.a. or a $200 boost, with a family adjusted taxable income
between around $78,000 p.a. and around $112,000 p.a.
Additionally, the Government will
tighten the age requirement for FTB A from less than 21 years of age, to less
than 18 years of age (or where a young person remains in secondary school, the
end of the calendar year in which they turn 19). Individuals who no longer
qualify for FTB A may be eligible to receive Youth Allowance subject to usual
eligibility requirements.
Childcare costs
Additional
help with childcare costs. For parents on income support who are wanting to
return to work, the government will provide extra help to meet out-of-pocket
childcare expenses through the Jobs, Education and Training Child Care Fee
Assistance program. You can find out more here.
Parenting Payment – tightening of the
qualification rules
Effective
from 1 January 2013
Currently, recipients of Parenting Payment
(PP) who were granted the payment prior to 1 July 2006 do not lose eligibility
until their youngest child attains age 16.
The Government will align PP eligibility for
all recipients so that the payment will cease when the youngest child attains
age 6 (for partnered recipients), or age 8 (for single recipients).
Liquid
Asset Waiting Period
Effective
from 1 July 2013
The Government will increase the maximum
reserve amount for the liquid assets waiting period for recipients of
particular income support payments. Liquid assets are assets in the form of
cash or those which can be easily converted into cash, including shares and
term deposits. A single person without dependents will now have an increased
maximum reserve amount of $5,000, while a person who is a member of a couple
and/or has a dependent child will now have an increased maximum reserve amount
of $10,000.
The change will affect applicants
for Newstart Allowance, Youth Allowance, Sickness Allowance and Austudy
payments.
Thank you to our guest blogger - Naomi Alleston
Growing up in a farming and small business family
provided the foundation for understanding the importance of finance and
planning for the future - whatever the future brings.
Offering holistic, fee for advice services, with a
logical approach, I start all financial mapping with cash flow details and take
the financial planning journey with my clients to help them achieve their
financial goals.
Combining my knowledge and passion with our clients
dreams... We can ACHIEVEIT
