If you’re like most Australians, you’re busy paying the bills and saving for retirement, as well as accessing services like healthcare, education, child care and aged care. So how will the Federal Budget 2015-16 change the way you live and work on a practical day-to-day level?
The good news to start with is that the Federal Treasurer confirmed there will be “no new taxes on superannuation under this government” during his Budget speech.
Here’s a brief round-up of what the budget could mean for the rest of your family finances—whether you’re starting out in your working life, building a career and family, or enjoying the fruits of your labour in retirement. But don’t forget—the proposals may change as legislation passes through parliament.
Proposed from 1 July 2017
A new single Child Care Subsidy (CCS) will aim to meet the cost of child care for parents engaged in work, training, study or other recognised activity.
The CSS replaces the Child Care Benefit, the Child Care Rebate and the Jobs, Education and Training Child Care Fee Assistance.
To be eligible for the CCS, you’ll need to:
The government will also spend $869 million on the Child Care Safety Net to help vulnerable and disadvantaged children.
And from 1 July 2016, a proposed Nanny Pilot Programme will help with the cost of care for around 10,000 children whose parents work shifts or live in rural and remote areas.
Proposed from 1 July 2016
You will no longer be able to receive payments from both your employer and the government’s Paid Parental Leave Pay (PPLP) scheme. However, all primary carers will have access to parental leave payments that are at least equal to the maximum PPLP benefit (currently 18 weeks at the national minimum wage).
The government has announced a number of tax breaks for businesses with an aggregated annual turnover of less than $2 million.
And new business start-ups will be allowed to immediately deduct a range of professional expenses associated with starting a new business, such as professional, legal and accounting advice.
Proposed from 1 July 2015
The government is rationalising the rules around work-related car expense tax deductions. This doesn’t affect car leasing and salary sacrifice/fringe benefits arrangements.
Proposed from 1 July 2014
For the 2014-15 year, the Medicare levy low income threshold will be indexed. For singles, the threshold will increase to $20,896 and for couples $35,261, plus $3,238 for each dependent child. For single seniors and pensioners the threshold will increase to $33,044. If your taxable income is below the relevant threshold you’re not liable for the Medicare levy.
The government is encouraging young Australians to join the workforce by:
The government has announced changes to the overseas portability rules which will affect some age pensioners and people who receive Family Tax Benefit – Part A (FTBA).
Proposed from 1 July 2015
Currently, patients must have two medical practitioners (including a specialist) certify that they are likely to pass away within one year to gain unrestricted access to their superannuation. The Government will change this period to two years, giving terminally ill patients earlier access to their super.
Proposed from 1 Jan 2017
The government has announced changes to the assets test thresholds for the age pension.
And for every $1,000 your pension is over the threshold, your pension will now reduce by $3.00 a fortnight – double the previous amount.
So if you own your home and you have assets of less than $289,500 (single) or $451,500 (couple), your pension will increase. But if you have more assets your pension will be reduced.
Some measures announced in last year’s Budget will not proceed, including:
How the Budget affects you will depend on your personal circumstances and where you’re at in life. Here are some key callouts.
Just starting out
Nearing retirement or retired
To find out more about how the Budget could affect you, go to www.budget.gov.au or speak to us.
Again the proposals may change or be withdrawn as legislation passes through parliament.
For more information on how the Federal Budget 2015/2016 will affect your personal financial situation, please contact us today on 3231 4250.
Note: Any advice contained in this document is general in nature and does not consider your particular situation. Please do not act on this advice until its appropriateness has been determined by a qualified financial adviser. Whilst the tax implications have been considered we are not, nor do we purport to be a registered tax agent. We strongly recommend you seek detailed tax advice from an appropriately qualified tax agent before proceeding.
“This document or website contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making an investment decision. Charter Financial Planning Limited and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.”