Federal Budget 2022-23
In late March the federal government released their budget for 2022/23 and as you would have guessed it was certainly geared towards announcements that will appeal to the voters, given an election is not far away. For once, superannuation was generally left alone as topics such as cost of living, personal and business taxation, healthcare and essential services were addressed.
For a more precise look at the budget, please click on the following link https://budget.gov.au/index.htm. Also, see below for a brief summary:
- From July 2022, you will no longer need to meet the work test between the ages of 67 and 75 for personal contributions into super. You will however, have to meet the work test if you wish to claim a deduction for a personal contribution between these ages.
- From July 2022, the minimum age eligibility to make a downsizer contribution has been reduced to age 60. This means, if you have sold a property and you meet the criteria needed in order to make such a contribution to super, this can be done from age 60 onwards.
- A continuation of the 50% reduction to the minimum drawdown for pension payments for the 2022/23 financial year. The government recognises that volatility continues in the markets and hence has extended this provision another year.
- The maximum amount of voluntary contributions able to be released under the First Home Super Saver Scheme (FHSSS) has increased from $30,000 to $50,000.
- For the 2021/22 Financial Year, the Government will provide a one-off $420 cost of living tax offset via an increase to the existing low- and middle-income tax offset (LMITO) for 2021-22. Combined with the existing LMITO, eligible low- and middle-income earners will receive a tax offset of up to $1,500 for the 2021-22 income year.
- The government will provide a once-off Cost-of-Living Payment of $250 in April 2022 to eligible recipients of payments and concessions such as the age pension, disability support pension, carer payment, parenting payment, youth allowance, holders of the Commonwealth Seniors Health Care Card and more. The payments are exempt from taxation and won’t count as income support for the purposes of any income support payment. A person can only receive one economic support payment, even if they are eligible under two or more of categories.
- The Paid Parental Leave (PPL) scheme is to be enhanced by integrating Parental Leave Pay and Dad and Partner Pay into a single scheme of up to 20 weeks leave, which can be shared between eligible parents. The aim of the enhancements is to provide more flexibility for families to decide how to best manage work and care.
- The government will provide $468.3 million over five years from 2021-22 to further implement the government’s response to the Royal Commission into Aged Care Quality and Safety. They will also provide additional funding for older Australians in the aged care sector to manage the impact of the Coronavirus.
- The home guarantee scheme will be expanded from 10,000 homes up to 35,000 homes each year. This supports eligible first homebuyers to purchase a new or existing home with a deposit as low as 5% without having to pay lender’s mortgage insurance. This is on top of last years budget announcement that assists eligible single parents with children to either buy their first home or re-enter the housing market with a deposit as little as 2%.
- The government has announced it will halve the fuel excise for the next 6 months, dropping it from 44.2 centres per litre to 22.1 cents per litre.
For any further information please see the aforementioned link. Alternatively, if you would like to discuss any announcements which are specific to your situation, please contact your adviser to arrange an appointment.
General Advice Warning: Any advice given herein is general in nature and has not taken into consideration your personal financial objectives, situation or specific needs. As a result, you should consider the appropriateness of the advice as it relates to you before acting upon it. Always consult the relevant Product Disclosure Statement before making any investment decision relating to a specific product that has been mentioned.