WRITTEN BY Mobile Bookkeeping and Recruitment | 17 FEBRUARY 2014
Following are the main tax measures announced in last month’s Federal Budget, in addition to those already announced as part of the response to the Henry Review (see news item).
Please note that these will need to be passed by both Houses of Parliament before they become legislation.
50% discount on tax on interest income
From 1 July 2011, individual taxpayers will be provided with a 50% tax discount on up to $1,000 of interest earned, Including interest earned on deposits held in authorised deposit taking institutions, bonds, debentures etc.
Increase in the net medical expenses tax offset claim threshold
From 1 July 2010, the Government will increase the threshold above which a taxpayer may claim the 20% net medical expenses tax offset from $1,500 to $2,000 (and will commence annually indexing the threshold to the CPI after that).
Changes to the Super Co-Contribution
- The Government has announced the following two changes to the super co-contribution:
- The matching rate for the co- contribution will be retained at 100% or $1 for each $1 contributed (rather than 150% .or $1.50), which means that the maximum co-contribution payable will stay at $1,000 (rather than $1,500);
- The income thresholds for the super co-contribution will be frozen for 2010/11 and 2011/12, meaning the maximum co-contribution will continue to only be available to people with incomes of up to $31,920 (the amount available then phases out for incomes up to $61,920).
Changes to First Home Saver Accounts
The First Home Saver (‘FHS’) initiative will be made more flexible and allow savings in an FSA account to be paid into an approved mortgage after the end of a minimum qualifying period, rather than requiring it to be paid to a Superannuation account (which are the current rules if the account holder buys a home within the first four years of setting up a FSA account).