The 2022/23 Federal Budget has been released!
What does it cover you ask? Its a range of measures aiming to reduce the pressure from increased costs of living.
Our Advisors at Endorphin Wealth have watched this news and are here to help you with any questions you have and what initiatives affect your life and financial situation.
Summary – Personal Taxation
- Cost of living tax offset: The Low and Middle Income Tax Offset (LMITO) will increase, providing an additional $420 to reduce tax payable for eligible taxpayers in the 2021/22 financial year. This offset is non-refundable and available to those earning up to $126,000 per annum.
- Halving of fuel excise: The excise on fuel will be halved for six months from 30 March 2022. As a result we should see lower fuel prices during this period. Half the current excise on fuel and diesel is 22.1 cents per litre.
- Indexation of the Medicare Levy thresholds: Each year the Medicare Levy low – income thresholds are indexed. From 1 July 2021, the thresholds are expected to be:
– Singles $23,365 (increased from $23,226)
– Families $39,402 (increased from $39,167) plus $3,619 per dependent (increased from $3,597)
– Single seniors and pensioners $36,925 (increased from $36,705)
– Family seniors and pensioners $51,401 (increased from $51,094) plus $3,619 per dependent (increased from $3,597)
Summary – Superannuation
- Continuation of the reduced minimum pension drawdown: The budget proposes to extend the minimum amount that needs to be drawn from account-based income streams to the 2022/23 financial year. Importantly individuals with account-based pensions or term allocated pensions will be required to draw less from their savings, in line with the current year minimums.
Summary – Social Security
- Paid parental leave changes: Parental leave pay is proposed to be combined with Dad and Partner Pay resulting in a single scheme of up to 20 weeks leave. As a result, this can be shared between parents. This leave can be taken at any time within two years of birth or adoption. The new payment is proposed to be subject to an additional household income test designed to increase eligibility.
- Cost of living payment: Eligible social security recipients resident in Australia will receive a one-off $250 payment in April 2022. Eligible payments include the Age Pension, Disability Support Pension, Carer Payment and Allowance, JobSeeker Payment. It also includes individuals holding a Pensioner Concession Card or Commonwealth Seniors Health Card. The payments will not be means tested and will be tax-free.
The above is a brief summary and not all initiatives have been outlined as the 2022/23 Federal Budget contained many other initiatives which may impact you. It is important to reach out to a trusted financial professional to help understand the various initiatives the consequences this may have on you.
For an obligation-free conversation about your financial future, please contact us on 03 9190 8964 or at firstname.lastname@example.org