Cost of living tax offset
The Government is proposing to increase the Low- and Middle-Income Tax Offset (LMITO) for the 2021-22 income year to provide a one-off cost of living tax offset.
LMITO will be increased by $420 for the 2021-22 income year, increasing the offset to $1,500 for individuals and $3,000 for couples. In line with the current LMITO, taxpayers with incomes of $126,000 or more will not receive the additional $420.
The Government is proposing to increase the Medicare levy low-income thresholds for seniors, pensioners, families and singles from 1 July 2021.
- The threshold for singles will be increased from $23,226 to $23,365.
- The family threshold will be increased from $39,167 to $39,402.
- The family threshold will be increased from $39,167 to $39,402.
- The family threshold for seniors and pensioners will be increased from $51,094 to $51,401.
- For each dependent child or student, the family income thresholds will be increased from $3,597 to $3,619
Employers From 1 July 2022, eligible employers and Group Training Organizations that hire a new or recommencing Australian apprentice in a Priority Occupation can apply for a wage subsidy of
- 10 per cent of wages for first- and second-year apprentices (up to $1,500 per quarter)
- 05 per cent of wages for third year apprentices (up to $750 per quarter), up to $15,000 per apprentice.
Eligible employers that hire a new or recommencing Australian apprentice not in a Priority Occupation can apply for a hiring incentive of $3,500.
Apprentice Support Payment
From 1 July 2022, eligible Australian apprentices commencing or recommencing in a Priority Occupation listed can apply for a Payment of $1,250 every six months over the first two years of their apprenticeship (up to $5,000 in total).
Small Business Skills & Training
A small business having an aggregated annual turnover of less than $50 million will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees.
- This comes to a $120 tax deduction for every $100 spent
- The external training courses needs to be provided to employees in Australia or online and delivered by entities registered in Australia.
- This measure will apply from 7:30pm (AEDT) on 29 March 2022 until 30 June 2024
Small Business technology investment
The Government announced that businesses with aggregated annual turnover of less than $50 million will be able to deduct an additional 20 per cent
- of the cost incurred on business expenses and equipment that support their digital adoption
- It can be a portable payment device, cyber security systems or subscriptions to cloud-based services
- This measure will apply from 7:30pm (AEDT) on 29 March 2022 until 30 June 2023.
- This translates to $100 expenditure generating a $120 tax deduction
- An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible
Temporary reduction in fuel excise for a period of 6 months.
From 12:01am on 30 March 2022 to 11:59pm on 28 September 2022, the excise and customs duty rate that applies to petrol, diesel and all other petroleum-based products will be reduced by 50 %.
Employee Share Schemes
Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to:
- $30,000 per participant per year, accruable for unexercised options for up to 5 years, plus 70 per cent of dividends and cash bonuses
- any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.
Cost of Living Payment
There will be a one-off $250 tax free payment to eligible recipients. The payment will be made in April 2022 to eligible recipients of the following payments and concession card holders:
Age Pension, Disability Support Pension, Parenting Payment, Carer Payment, Carer Allowance, Jobseeker Payment, Youth Allowance, Austudy and Abstudy Living Allowance, Double Orphan Pension, Special Benefit, Farm Household Allowance, Pensioner Concession Card holders, Commonwealth Seniors Health Card holders, Eligible Veterans’ Affairs payment recipients and Veteran Gold card holders.
The Government will increase the number of guarantees under the Home Guarantee Scheme to 50,000 per year for 3 years (from 2022-23) and then 35,000 a year thereafter to support homebuyers to purchase a home with a lower deposit.
This package will enable single parents to buy a home with a deposit of 2% and first homeowners with a deposit of 5%.
Pharmaceutical Benefits Scheme
- The Government will reduce the Pharmaceutical Benefits Scheme (PBS) Safety Net thresholds. The patients will reach the Safety Net sooner each year, with approximately 12 fewer scripts for concessional patients and 2 fewer scripts for general patients in a calendar year.
- For general patients, the threshold will be reduced from $1,542.10 to $1,457.10.
- For concession card holders, the threshold will be reduced from $326.40 to $244.80
- On reaching the PBS Safety Net, concessional patients will receive their PBS medicines at no cost for the rest of the calendar year and general patients will receive their PBS medicines at the concessional co-payment rate (which is currently $6.80 per prescription)
The Dad and Partner Pay scheme will be merged into the Parental Leave Pay scheme creating a single scheme of up to 20 weeks of parental leave. This will be fully flexible and shareable for eligible working parents.
The paid parental leave can be taken any time within 2 years of the birth or adoption of their child. The income test will also be broadened.
Superannuation minimum drawdown rates
The Government has extended the 50 per cent reduction of the superannuation minimum drawdown requirements for account-based pensions, TAPS and similar products for a further year to 30 June 2023.
DISCLAIMER: This document contains factual information and general financial product advice only and has been prepared without taking into account your individual objectives, financial situation or needs. The information provided is not intended to be a substitute for professional financial product advice and you should determine its appropriateness having regard to your particular circumstances and seek any independent financial or other professional advice you may require.
Information in this document may contain forward-looking statements regarding our views with respect to potential regulatory changes. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person, including BNH Financial Services Pty Ltd, or any other member of the BNH, accepts responsibility for any loss suffered by any person arising from reliance on this information. The information in this document is current at 29/03/2022