The focus of this year’s Federal Budget was on personal tax cuts for low, middle and high income earners.
The Government also announced some minor changes to superannuation, aimed at helping older Australians who can afford to make additional contributions.
Compared to previous budgets, the changes to super are modest and will benefit older Australians.
The super changes announced will need to be legislated and, with a Federal election around the corner, there is no certainty they will be implemented. The Government is expected to announce the date for the 2019 Federal Election later this week.
The income tax cuts are designed to be implemented over a five-year period with three key start dates:
An Increase to the low and middle income tax offset providing up to $1,080 for singles and up to $2,160 for dual income families. The offset applies to people earning up to $126,000 a year.
An increase in the income tax threshold for the 19% tax rate from $41,000 to $44,000 plus an increase in the low income tax offset from $645 to $700.
A decrease in the 32.5% tax rate to 30% for Australians earning between $45,000 and $200,000, which includes 94% of tax payers.
There are three changes to super which will benefit older Australians who can afford to make additional voluntary super contributions.
People aged 65 and 66 years will be able to make both concessional and non-concessional voluntary super contributions without meeting the work test.
The bring-forward rule, which currently allows those aged less than 65 years to make three years’ worth of non-concessional contributions in one year will be extended to those aged 65 and 66. This will allow these people to make voluntary non-concessional contributions of up to $300,000 in a single year.
Members will also be able to make voluntary contributions for a spouse aged up to 74, up from the current cut-off age of 69 years.
The Government is proposing a one-off Energy Assistance Payment of $75 for single pensioners and $125 for couples. The payment would be made this financial year.
The Government also proposed additional funding of $5.9 billion over two years from 1 July 2020 for the Commonwealth Home Support Program (CHSP) and an additional 10,000 home care packages to help support older Australians who wish to stay in their home longer.
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