Temporary Budget Repair Levy
- Temporary Budget Repair Levy From 1 July 2014 through to 30 June 2017 the Government will impose an additional levy of 2% on individual taxpayers who have a taxable income in excess of $180,000 in the 2015, 2016 and 2017 tax years.
Our first thought on reading this was salary sacrifice. However, the Government thought the same thing and intend to increase the Fringe Benefits Tax rate from 47% to 49% with effect from 1 April 2015 to counter taxpayers embarking on salary sacrifice arrangements to avoid having to pay the levy.
The value of benefits received by employees of Public Benevolent Institution’s (PBI) and health promotion charities, public and Not-For-Profit hospitals, public ambulance services and certain other tax exempt entities will be protected by increases to annual Fringe Benefits Tax (FBT) caps. Further, the FBT rebate rate will be aligned with the FBT rate from 1 April 2015.
- With effect from 1 July 2014 the Medicare Levy will increase from 1.5% to 2% with the money raised by the increased levy to be directed towards funding the Natural Disability Income Scheme.
- The Medicare Levy low income thresholds for couples and families will be increased for the 2014 tax year as follows:
Personal Tax Office Offsets Abolished
With effect from 1 July 2014 the following tax offsets are to be abolished:
- Dependant Spouse tax offset
- Mature Age Worker tax offset
Farm Management Deposits (FMD)
The Government announced last night that the FMD will be exempted from the unclaimed monies scheme to protect FMD from being transferred to the Commonwealth.
From 1 July 2016, the Government will decrease the income threshold for repayment of the HELP debts and will adjust indexation of the HELP debts from 1 June 2016.
- New minimum threshold for the repayment of HELP debts will be set at 90% of the minimum threshold that would otherwise have applied in the 2016/17 tax year.
- Annual indexation applied to HELP debts will be changed from the CPI to a rate equivalent to the yields on 10 year bonds issued by the Australian Government capped at 6% p.a. from 1 June 2016.