2014 Federal Budget proposed changes The main focus of the 2014 Budget was education, health and infrastructure, with the Government leaving superannuation largely untouched, unlike recent years, with little change to the taxation of super benefits, preservation age or contribution caps. KEY PROPOSED CHANGES: (not yet passed in parliament) $7 Medicare co-payments for GP visits AND $5 for prescriptions at the Chemist ‘Temporary Budget Repair Levy’ for higher income earners petrol price indexation establishment of a $20 billion medical research fund deregulation of university tuition fees Superannuation Guarantee to increase The Superannuation Guarantee (SG) is set to rise from 9.25 per cent to 9.5 per cent from 1 July 2014, then remain at 9.5 per cent until 30 June 2018. From 1 July 2018, it is set to increase by 0.5 per cent per year until it reaches 12 per cent from 1 July 2022. Financial year SG rate 2014/15 9.5% 2015/16 9.5% 2016/17 9.5% 2017/18 9.5% 2018/19 10.0% 2019/20 10.5% 2020/21 11.0% 2021/22 11.5% 2022/23 12.0% PROPOSED CHANGES TO PENSIONS Age Pension eligibility AGE TO INCREASE; indexed to CPI From 1 July 2035, you’ll need to be 70 years of age to qualify for the Age Pension. This change only affects you if you were born after 1 July 1958. Date of birth between Age Pension eligibility age 1 July 1952 and 31 December 1953 65.5 1 January 1954 and 30 June 1955 66 1 July 1955 and 31 December 1956 66.5 1 January 1957 and 30 June 1958 67 1 July 1958 and 31 December 1959 67.5 1 January 1960 and 30 June 1961 68 1 July 1961 and 31 December 1962 68.5 1 January 1963 and 30 June 1964 69 1 July 1964 and 31 December 1965 69.5 1 January 1966 and later 70 Pension increases are also set to be INDEXED TO THE CONSUMER PRICE INDEX (CPI) from 1 September 2017 (currently the greater of CPI, Male Total Average Weekly Earnings and the Pensioner and Beneficiary Cost of Living Index). The ASSETS AND INCOME TEST THRESHOLDS that determine your eligibility for the Age Pension, are set to continue to be INDEXED until 1 July 2017 and THEN REMAIN FROZEN for the following three years. From 20 September 2017, the deeming thresholds used in the pension assets test will be reset to a lower amount of $30,000 for singles per financial year (currently $46,600) and $50,000 for couples (currently $77,400). From 1 July 2014, the ANNUAL SENIORS SUPPLEMENT ABOLISHED, currently paid to recipients of the Commonwealth Seniors Health Card. From 1 January 2015, the TAX-FREE INCOME FROM YOUR SUPERANNUATION PENSION may be INCLUDED IN THE INCOME TEST for new Commonwealth Seniors Health Card recipients. This brings it in line with the Age Pension eligibility rules. Taxation: TOP marginal TAX RATE TO RISE to 49 per cent Those earning more than $180,000 per financial year may be required to pay a 2 per cent ‘Temporary Budget Repair Levy’; from 1 July 2014 to 30 June 2017. The 2 per cent levy applies only to income over this amount bringing the top marginal tax rate to 49 per cent (including the Medicare Levy). COMPANY TAX RATE TO DECREASE Currently 30 per cent, from 1 July 2015 the company tax rate is set to decrease to 28.5 per cent. FIRST HOME SAVER ACCOUNTS (FHSA) SCHEME to be ABOLISHED PAID PARENTAL LEAVE Scheme to start (WHILE AT THE SAME TIME STOPPING ALL PAYMENTS FOR THOSE UNDER 30 YEARS OF AGE WHO ARE UNEMPLOYED) Parents can access up to 26 weeks of parental leave pay at a rate based on their wage, however, it will be capped at wages of $100,000 per year. Employers encouraged to HIRE OVER 50s who’ve been out of work for six months or more. Employers have the potential to receive a total payment of $10,000. For a detailed Budget summary visit treasury.gov.au/
Posted on: Thu, 26 Jun 2014 04:12:11 +0000
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