The federal budget has been released and several tax measures have been extended. There are once off tax cuts for most individuals and a few adjustments to super.
Personal Tax Offset
The Low and Middle Income Offset that was due to end in the 2021 Financial Year has been extended to the 2022 income year. The table below indicates what you might receive as an offset:
There were no changes to tax rates but phase 3 of the Government's tax cuts which would largely benefit those on higher incomes is scheduled to come into effect in 2024.
First Home Super Saver Extension
The First Home Super Saver scheme, which allows first home buyers to make contributions to super of up to $15,000 per year and withdraw up to $30,000 has been extended to allow up to $50,000 of contributions to be withdrawn. This will bring the maximum tax saving potential from using this scheme up to around $8,000. This scheme generally only works for people who have a taxable income above $45,000 plus the amount of contributions they are making in a year.
Removal of $450 Super Guarantee Threshold
Employees earning less than $450 in a month will now receive super guarantee contributions on their wages
Changes to Super Rules
There were a few changes to super rules. If you are aged between 67 and 74, it is proposed that from 1 July 2022, you would no longer need to meet a work test to be able to make non-concessional contributions to Super. Importantly you would still need to meet the work test to make concessional contributions (contributions for which you can claim a tax deduction.
Another change was to decrease the age you can make a downsizer contribution from 65 years old to 60 years old. A downsizer contribution is a contribution which can be made in excess of normal contributions caps of up to $300,000 without needing to meet the work test. It applies when you sell your main residence that you have owned for at least 10 years.