Treasurer Josh Frydenberg’s first Budget focuses on reducing the tax burden for the majority of working Australians, greater superannuation flexibility for retirees and a one-off energy relief payment for eligible income support recipients.
LOW AND MIDDLE INCOME TAX OFFSET
The Government will extend the Low and Middle Income Tax Offset (LMITO) by increasing the base amount from $200 to $255 per year and the maximum amount from $530 to $1,080 per year. Taxpayers with income between $48,000 and $90,000 will be eligible to receive the maximum offset of $1,080. The offset phases out with incomes up to $126,000. The new amounts will apply for the 2018-19 financial year which means, provided the Government can legislate these changes in the three Parliamentary sitting days in April, the offset will apply to tax returns lodged from 1 July 2019. The LMITO is due to end on 30 June 2022.
INSTANT ASSET TAX WRITE-OFF
The Government will increase the instant asset tax write-off from $25,000 to $30,000 and making this available for medium sized businesses (those with an aggregated annual turnover of between $10 million and $50 million) as well as small businesses. The increased threshold and eligibility apply from the release of the budget at 7:30pm on 2 April 2019. The write-off will operate until 30 June 2020. Small businesses will also continue to have access to the simplified depreciation rules.
IMPROVING FLEXIBILITY FOR OLDER AUSTRALIANS
The Government will allow voluntary superannuation contributions (both concessional and non-concessional) to be made by those aged 65 and 66 without meeting the work test from 1 July 2020. People aged 65 and 66 will also be able to make up to three years of non-concessional contributions under the bring forward rule. Those up to and including age 74 will be able to receive spouse contributions, with those 65 and 66 no longer needing to meet the work test.
ENERGY ASSISTANCE PAYMENT
The Government will provide a one-off payment of $75 for singles and $62.50 for each member of an eligible couple ($125/couple) who receive a qualifying payment on 2 April 2019 to provide relief from high energy costs. Qualifying payments include the Age Pension, Carer Payment, Disability Support Pension, Parenting Payment Single, and Veterans’ pensions and payments.
HOME CARE PACKAGES
The Government’s Home Care Packages Program supports Australians who choose to receive care in their own homes. The Government is providing $282.4 million over five years from 2018-19 for an additional 10,000 home care packages across all levels. Australians with dementia or requiring cognition support will benefit from additional funding for home care supplements, and the Government is providing $7.7 million to develop an end-to-end compliance framework for home care.