CHANGES EFFECTIVE 1 JULY 2013
Superannuation – higher concessional contributions cap
• From 1 July 2013, people aged 60 or more will be able to access the higher $35,000 concessional contributions cap; and
• From 1 July 2014, people aged 50 or more will be able to access the higher $35,000 concessional contribution cap.
Phasing out the net medical expenses tax offset (‘NMETO’)
• Only those taxpayers who claim the NMETO for the 2012/13 income year will be eligible for the NMETO for the 2013/14 income year if the have eligible out of pocket medical expenses above the relevant thresholds. Similarly, only those who claim the NMETO in 2013/14 may be eligible for the NMETO in 2014/15.
• The NMETO will continue to be available for taxpayers for out of pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019 when Disability Care Australia is fully operational and aged care reforms have been in place for several years.
CHANGES EFFECTIVE 1 JULY 2014
Increase in the Medicare levy by 0.5%
• From 1 July 2014, the government will increase the Medicare levy from 1.5% to 2% to provide funding for Disability Care Australia.
Self-education expense claims – $2,000 annual deduction cap
• From 1 July 2014, the government will introduce a $2,000 annual cap on work-related self-education expenses deductions.
• Taxpayers will be able to claim a tax deduction of up to $2,000 of education expenses in a income year. Deductible education expenses are costs incurred in undertaking a course of study or other education activity, such as conferences and workshops, and include tuition fees, registration fees, student amenity fees, textbooks, professional and trade journals, travel and accommodation expenses, computer expenses and stationery, where these expenses are incurred in the production of the taxpayer’s current assessable income.
Superannuation – reforming the tax exemption for earnings on assets supporting income stream
• From 1 July 2014, the government will limit the tax exemption for earnings on superannuation assets supporting retirement income stream.
• Earnings on superannuation assets supporting income steams will be tax-free up to $100,000 per year for each individual;
• Earnings above the $100,000 threshold will be taxed at the same concessional rate of 15% that applies to earnings in the accumulation phase.
Low income superannuation contribution
• The LISC effectively refunds, up to $500 a year, the tax paid on superannuation concessional contributions for people with incomes up to $37,000.
Removal of higher education debt repayment discounts
• From 1 January 2014, the government will remove the current discounts applying to up-front and voluntary payments made under the Higher Education Loan Program.
• Currently, two discounts are available. These are a10% discount for students who elect to pay their student contribution up-front and a 5% bonus on voluntary payments of $500 or more, which are made to ATO.
Measures for a more sustainable family payments
• Abolition of the Baby Bonus – from 1 March 2014, the Baby Bonus will no longer be available. Instead, families eligible for FTB Part A will receive an additional loading on their family payments when they have a new baby. The extra payments will total $2,000 for the first child and $1,000 for subsequent children.
• Change to the eligibility age for FTB Part A – from 1 January 2014, FTB Part A will only be paid to families up to the end of the calendar year that their child, 16 or over, completes school. Youth Allowance will continue to be available for eligible young people who need financial support for post-secondary study or while they are looking for work.