Federal Budget 2022/23

Superannuation

Eligibility for downsizer contributions to superannuation will expand to those aged 55+ years (reduced from 60 years). This will allow more people to make an additional non-concessional contribution of up to $300,000 per contributor from proceeds of selling their main residence (on top of the existing contribution caps). Other eligibility criteria will apply

Proposed measures relating to self-managed super fund (SMSF) residency changes (delayed) and SMSF audits (won’t proceed)

Tax

The Low-Middle Income Tax Offset (LMITO) is not extended to 2022-23 and is replaced by the Low Income Tax Offset (LITO). The maximum amount of LITO is $700 for those earning up to $37,500. The amount of the LITO reduces at a rate of 5c per dollar for taxable incomes between $37,500 and $45,000, and 1.5c per dollar for taxable incomes between $45,001 and $66,667

No change to tax rates and income thresholds for Australian tax residents for 2022-23

From 1^st July 2024, there will only be 3 personal income tax rates for Australian tax residents:

19% ($18,201-$45,000);

30% ($45,001-$200,000); and

45% ($200,001+).

No change for foreign tax resident’s rates and income thresholds for 2022-23

From 1^st July 2024, the rates and income thresholds for foreign tax residents will be:

30% ($0-$200,000); and

45% ($200,001+).

The tax treatment for off-market buy-backs by listed public companies will be aligned with the tax treatment for on-market buy-backs. No part of the buy-back price is treated as a dividend, and the total amount received by the shareholder is taken to be consideration for the share sale

Intangible assets depreciation – there will be no option to self-assess effective lives for certain intangible assets. Effective lives will continue to be set by statute

Digital currencies, such as Bitcoin, will continue to be excluded as foreign currency for tax purposes

More COVID grants are to be treated as non-assessable non-exempt income (VIC & ACT)

Families

From 1st July 2023, either parent will be able to claim the Paid Parental Leave payment (if eligible), and parents can claim the payments and take leave at the same time

The Paid Parental Leave scheme will expand from 18 weeks to 26 weeks by 1^st July 2026, which will gradually increase from 1^st July 2024

The maximum Child Care Subsidy rate will increase from 85% to 90% for families for their first child in care

The Child Care Subsidy rate will increase for all families earning less than $530,000 in household income

Pensioners

The amount age and veteran pensioners can earn from working before their pension is reduced will increase from $7,800 to $11,800

The assets test exemption for (pensioner) principal home sale proceeds will be extended from 12 months to 24 months for income support recipients. The income test will also be changed, to apply only the lower deeming rate (0.25%) to principal home sale proceeds when calculating deemed income for 24 months after the sale of the principal home

The income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 combined for couples. This will allow more seniors access to concessions

Education & Health

480,000 fee-free TAFE and community-based vocational education places will become available

$235m will be provided to commence the rollout of Urgent Care Clinics

$787.1m over 4 years will be provided to reduce the general patient co-payment for treatments on the Pharmaceutical Benefits scheme from $42.50 to $30 per script