Tag: Budget

Parliament House

Support for Australian small business

Posted on | by Allan Hall

The Government has introduced the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 (the Bill) into Parliament.

The Bill delivers measures announced in the 2022‑23 Budget to ease pressure and boost resilience for small businesses.

Schedule 1 to the Bill will implement a $20,000 instant asset write‑off for one year, as announced in the 2023‑24 Budget, to improve cash flow and reduce compliance costs for small businesses.

Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000, from 1 July 2023 until 30 June 2024.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

This is targeted, responsible support, to help Australia’s small businesses continue to grow.

Schedule 2 to the Bill will introduce the Small Business Energy Incentive, a 2023‑24 Budget measure designed to help small and medium businesses electrify and save on their energy bills.

Up to 3.8 million small and medium businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent deduction for eligible assets supporting electrification and more efficient use of energy.  

The new tax incentive applies from 1 July 2023 until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

The new Small Business Energy Incentive builds on the Albanese Government’s measures to help small businesses become more energy efficient and ease pressure on their energy bills.

Small businesses are the engine room of Australia’s economy, which is why these new measures are so critical.

CONTACT ALLAN HALL BUSINESS ADVISORS

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NSW State Budget 2023-24

Posted on | by Allan Hall

The 2023-24 NSW State Budget has a strong focus on tightening tax compliance, as well as changes to a number of exemptions and duties:

  • Funding Revenue NSW to Target Tax Compliance
  • Land Tax – Closing the loophole for Principal Place of Residence Exemption
  • Landholder Duty – changes to threshold for acquiring a “significant interest” in a private trust
  • Fixed and nominal duty amounts increased

This year’s NSW State Budget does not explicitly mention specific measures targeted at small businesses. However, it does mention some broader economic and infrastructure initiatives that could indirectly benefit small businesses. These include:

  1. Toll Reform: Introducing a two-year toll cap and streamlining motorway pricing
  2. Infrastructure and Transport: Investments in infrastructure projects, including road upgrades and improved public transportation
  3. Energy Relief and Reform: Addressing high energy costs through rebates and energy market reforms
  4. Disaster Relief: Funds allocated for natural disaster support and recovery programs.

Measures for First Home Buyers

The State Budget includes an expansion to the First Home Buyers (FHBs) Assistance Scheme to support FHBs with a stamp duty exemption for purchases up to $800,000 and a concession for purchases between $800,000 and $1 million.

Five out of every six first home buyers will pay no stamp duty, or a concessional rate after the Government expanded stamp duty exemptions and concessions from 1 July 2023. According to preliminary figures, more than 1,000 FHBs purchasing in the $650,000 to $800,000 range have availed themselves of the full exemption from stamp duty in July under the scheme.

The measures announced in the 2023-24 NSW State Budget can have implications for the business environment in New South Wales, including those for small businesses and are outlined in the Treasury and Revenue Legislation Amendment Bill 2023 expected to be implemented from 1 February 2024, once the Bill has been passed by Parliament.

CONTACT ALLAN HALL BUSINESS ADVISORS

audit

Federal Budget weight behind tax audits

Posted on | by Allan Hall

The 2023 Federal Budget included $1 billion for audits of taxpayers over the next 4 years.

Therefore all taxpayers have an increased chance of a tax office review of their returns in the near future.

Did you know that our costs for assisting you with the management and supply of information to the ATO for their reviews can be insured?

We’ve partnered with AuditCover to share their offer with our clients.  AuditCover covers the professional fees you may incur when responding to a tax audit, review, investigation or enquiry from the ATO or state-based authorities and agencies.

If you haven’t already done so, please consider getting an online quote below.

If you’d like assistance with generating a quote, please let us know and we will be happy to help.

GET A QUOTE FOR AUDIT INSURANCE

If you have any questions, you can call AuditCover on 1300 895 797 or email them at [email protected]. Need more info? Read more here »

CONTACT ALLAN HALL BUSINESS ADVISORS

keyboard

The 120% technology and skills ‘boost’ deduction

Posted on | by Allan Hall

The legislation granting small and medium businesses (SMBs) the opportunity to claim a 120% tax deduction for technology expenses, skills training and training costs has finally passed Parliament, nearly a year after the announcement in the 2022-23 Federal Budget.

However, there are a few timing complexities involved. To benefit from the technology investment boost, you needed to have purchased and installed the technology by 30 June 2023, which was just seven days after the legislation was passed.

Key points

  • Under both the technology and Skills and Training Boost, eligible expenses will be available for the 120% deduction if they were incurred between 29 March 2022 and 30 June 2024
  • The bonus deduction for the technology boost is capped at 20% of the eligible expenditure, up to a limit of $20,000 ($100,000 of eligible expenditure)
  • There is no limit for the skills and training boost.

Who is eligible for the boosts?

Small business entities (including individual sole traders, partnerships, companies or trading trusts) with an aggregated annual turnover of less than $50 million can access the 120% skills and training boost, as well as the technology boost. Aggregated turnover includes the turnover of your business, affiliates and connected entities.

The technology investment Boost

Expenses that may qualify for the technology boost include:

  • Digital enabling items like computer hardware, telecommunications equipment, software, internet costs, computer network systems and services that facilitate their usage.
  • Digital media and marketing expenses including audio and visual content that can be accessed, stored or viewed on digital devices, as well as web page design.
  • E-commerce goods or services that support digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services and advice on digital operations or digitisation such as guidance on digital tools for business continuity and growth.
  • Cybersecurity systems, backup management and monitoring services.

The technology must be primarily or substantially used for a business’s digital operations or digitisation. There must be a direct connection to how the business generates income, particularly through its digital operations.

There are several costs that the technology boost does not cover, such as expenses related to staff employment, capital raising, construction of business premises and the cost of goods and services sold by the business. The boost does not apply to:

  • Assets purchased and sold within the relevant period (on or before 30 June 2023)
  • Capital works costs, including improvements to business premises
  • Financing costs like interest expenses
  • Salary or wage costs
  • Training or education costs, meaning that training staff on software or technology does not qualify (refer to Skills and Training Boost below)
  • Trading stock or the cost of trading stock.

The Skills and Training Boost

The Skills and Training Boost is a program that provides SMBs with a 120% tax deduction for external training courses offered to their employees. The primary objective of this boost is to facilitate the growth of SMBs’ workforce by enabling them to hire and upskill less-experienced employees through external training. This initiative aims to enhance their skills and increase overall productivity.

Please note that sole traders, partners in a partnership, independent contractors and other non-employees are not eligible for the boost as it is specifically designed for employees. Similarly, associates such as spouses or partners, as well as trustees of a trust, are not qualified to participate.

To ensure compliance, there are a few rules to be aware of:

  • Registration for the training course must have occurred between 7:30 PM (AEST) on 29 March 2022 and 30 June 2024. If an employee is already enrolled in an eligible training course, enrolments in subsequent courses or classes after 29 March 2022 are considered eligible.
  • The training must be deductible to your business according to ordinary rules, meaning it should be directly related to how your business generates income.
  • The training needs to be provided by a registered training provider who charges your business (either directly or indirectly) for the training. (Please refer to the section on “What organisations can provide training for the boost?” below)
  • The training must be intended for employees of your business and should be delivered either in-person within Australia or through online platforms.
  • The training provider cannot be your business or an associate of your business.

Training expenditure can include costs associated with the training, such as resources or equipment necessary for the course, provided that the training provider charges your business for these expenses.

What organisations can provide training for the boost?

Please note that not all courses offered by training companies will qualify for the boost. Only courses offered by registered training providers within their registration will be eligible. Typically, these providers offer vocational training to acquire a trade or courses that contribute to a formal qualification, rather than purely professional development.

Qualifying training providers will be registered by:

While some desired training may not be delivered by registered training organisations, there is still a wide range of options available. Short courses offered by universities or flexible courses designed for upskilling, rather than obtaining a degree qualification, can still be explored, especially if they align with the development pathway identified through recent performance reviews for your staff.

CONTACT ALLAN HALL BUSINESS ADVISORS

Compliance cogs

Federal Budget ATO compliance crackdown

Posted on | by Allan Hall

Increased number of reviews

The importance of audit insurance in the wake of the Federal Budget – did you know that you can get insurance that covers the costs of professional fees incurred to respond to an ATO audit?

The recently announced Federal Budget 2023 has unveiled significant funding increases ($588M) in the government’s stance towards tax compliance, particularly through the Australian Taxation Office (ATO). GST compliance,and Personal income tax deductions have been specifically named by the government as areas of risk.

If you are in business, audit insurance is an often-overlooked component of business insurance, however in an environment where compliance scrutiny is intensifying, having audit insurance serves as a proactive measure to safeguard one’s financial interests.

Extended audit scope

Even if you are not in business, you may be a high-income earner, or have investment properties, the scope for an ATO review is much greater than in the past. You should be aware of safeguarding your financial well-being and know that you are not immune to tax compliance scrutiny (and review).

As complexities within our tax system increase, the time and expertise required to respond effectively to ATO reviews also escalate, resulting in more costs to simply respond to the review, not including ongoing management of the ‘case’ to completion. The potential cost of such services is increasing, with accountants needing to spend many hours (at hourly rates) to address detailed audit correspondence and liaise with clients.

Audit insurance offers coverage for professional fees incurred in responding to ATO and other government department reviews.

Investing in audit insurance ensures that individuals are also financially prepared to handle these reviews without incurring a significant cost burden.

With a substantial allocation of government funding towards tax compliance, the ATO aims to enhance its ability to address emerging risks and generate additional revenue. In light of these developments, it becomes increasingly crucial for businesses and many other taxpayers to consider the importance of audit insurance as a protective measure.

READ MORE ABOUT AUDIT INSURANCE HERE

tax amnesty

Small business lodgement penalty amnesty

Posted on | by Allan Hall

Small Business – Lodgment Penalty Amnesty Program

On 9 May 2023 as part of the 2023-24 Budget, the government announced a lodgement penalty amnesty program for small businesses to encourage re-engagement with the tax system to get tax obligations up-to-date.

A lodgement penalty amnesty program is being provided for small businesses with aggregate turnover of less than $10 million to encourage them to re-engage with the tax system.

The amnesty will remit failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 that were originally due during the period from 1 December 2019 to 28 February 2022.

If those returns are lodged between 1 June 2023 and 31 December 2023, any failure to lodge a penalty applying to the late lodgement will be automatically remitted. No action is required to request a remission.

To be eligible for the amnesty the small business must, at the time of lodgment, be an entity with an aggregated turnover of less than $10 million.

This does not apply to privately owned groups, or individuals controlling over $5 million of net wealth.

CONTACT ALLAN HALL BUSINESS ADVISORS

Coat of arms of Australia

2023-24 Federal Budget

Posted on | by Allan Hall

Tax and Superannuation Overview

2023-24 Federal Budget Highlights

The Federal Treasurer, Dr Jim Chalmers, handed down the 2023–24 Federal Budget at 7:30 pm (AEST) on 9 May 2023.

The Budget forecasts the underlying cash balance to be in surplus by $4.2 billion in 2022–23, the first surplus since 2007–08, followed by a forecast deficit of $13.9 billion in 2023–24.

The Treasurer has described the tax measures as “modest but meaningful” including changes to the Petroleum Resources Rent Tax and confirmation of a 1 January 2024 implementation of the BEPS Pillar Two global minimum tax rules.

A range of measures provide cost-of-living relief to individuals such as increased and expanded JobSeeker payments and better access to affordable housing. No changes were announced to the Stage 3 personal income tax cuts legislated to commence in 2023–24.

As part of the measures introduced for small business, a temporary $20,000 threshold for the small business instant asset write-off will apply for one year, following the end of the temporary full expensing rules.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. The business tax and superannuation highlights are set out below.

READ FULL BUDGET REPORT

Business highlights

  • The instant asset write-off threshold for small businesses applying the simplified depreciation rules will be $20,000 for the 2023–24 income year.
  • An additional 20% deduction will be available for small and medium business expenditure supporting electrification and energy efficiency.
  • FBT exemption for eligible plug-in hybrid electric cars will end from 1 April 2025.
  • Employers will be required to pay their employees’ superannuation guarantee (SG) entitlements at the same time as they pay their salary and wages from 1 July 2026.

Small business depreciation — instant asset write-off threshold of $20,000 for 2023–24

The instant asset write-off threshold for small businesses applying the simplified depreciation rules will be $20,000 for the 2023–24 income year.

Small businesses (aggregated annual turnover less than $10 million) may choose to calculate capital allowances on depreciating assets under a simplified regime. Under these simplified depreciation rules, an immediate write-off applies for low cost depreciating assets. The measure will apply a $20,000 threshold for the immediate write-off, applicable to eligible assets costing less than $20,000 first used or installed between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write-off multiple low-cost assets. The threshold had been suspended during the operation of temporary full expensing from 6 October 2020 to 30 June 2023.

Assets costing $20,000 or more will continue to be placed into a small business depreciation pool under the existing rules.

The provisions that prevent a small business entity from choosing to apply the simplified depreciation rules for 5 years after opting out will continue to be suspended until 30 June 2024.

Increased deductions for small and medium business expenditure on electrification and energy efficiency

An additional 20% deduction will be available for small and medium business expenditure supporting electrification and energy efficiency.

The additional deduction will be available to businesses with aggregated annual turnover of less than $50 million. Eligible expenditure may include the cost of eligible depreciating assets, as well as upgrades to existing assets, that support electrification and more efficient use of energy. Certain exclusions will apply, including for electric vehicles, renewable electricity generation assets, capital works, and assets not connected to the electricity grid that use fossil fuels.

Examples of expenditure the measure will apply to include:

  • assets that upgrade to more efficient electrical goods (eg energy-efficient fridges)
  • assets that support electrification (eg heat pumps and electric heating or cooling systems), and
  • demand management assets (eg batteries or thermal energy storage).

Total eligible expenditure for the measure will be capped at $100,000, with a maximum additional deduction available of $20,000 per business.

When enacted, the measure will apply to eligible assets or upgrades first used or installed ready for use between 1 July 2023 and 30 June 2024. Full details of eligibility criteria will be finalised in consultation with stakeholders.

FBT exemption for eligible plug-in hybrid electric cars to end

The FBT exemption for eligible plug-in hybrid electric cars will end from 1 April 2025.

Arrangements involving plug-in hybrid electric cars entered into between 1 July 2022 and 31 March 2025 remain eligible for the exemption.

Employers to be required to pay SG on payday

Employers will be required to pay their employees’ superannuation guarantee (SG) entitlements at the same time as they pay their salary and wages from 1 July 2026.

Employers are currently required to make SG contributions for an employee on a quarterly basis to avoid incurring a superannuation guarantee charge.

The proposed commencement date of 1 July 2026 is intended to provide employers, superannuation funds, payroll providers and other stakeholders sufficient time to prepare for the change.

Changes to the design of the superannuation guarantee charge will also be required to align with the increased payment frequency. The government will consult with relevant stakeholders on the design of these changes, with the final framework to be considered as part of the 2024–25 Budget.

In addition, funding will be provided to the ATO to, among other things, improve data matching capabilities to identify and act on cases of SG underpayment.

Superannuation measures

  • Superannuation earnings tax concessions will be reduced for individuals with total superannuation balances in excess of $3 million from 1 July 2025.
  • The non-arm’s length income (NALI) provisions will be amended to provide greater certainty to taxpayers.

Reducing tax concessions for super balances exceeding $3M

Superannuation earnings tax concessions will be reduced for individuals with total superannuation balances in excess of $3 million.

From 1 July 2025, earnings on balances exceeding $3 million will incur a higher concessional tax rate of 30% (up from 15%) for earnings corresponding to the proportion of an individual’s total superannuation balance that is greater than $3 million. The change does not impose a limit on the size of superannuation account balances in the accumulation phase and it applies to future earnings, ie it is not retrospective.

Earnings relating to assets below the $3 million threshold will continue to be taxed at 15%, or zero if held in a retirement pension account.

Interests in defined benefit schemes will be appropriately valued and will have earnings taxed under this measure in a similar way to other interests.

Need help?

If you would like assistance to interpret these changes and how they may affect your individual or business circumstances, please contact your Allan Hall Advisor on 02 9981 2300.

CONTACT ALLAN HALL BUSINESS ADVISORS

Parliament House

Labor Government 2022-23 Federal Budget

Posted on | by Allan Hall

Tax & Superannuation Overview

2022–23 Labor Federal Budget Highlights

The Federal Treasurer, Dr Jim Chalmers, handed down the Labor government’s first Federal Budget at 7:30 pm (AEDT) on 25 October 2022.

Despite an uncertain global economic environment, the Treasurer has lauded Australia’s low unemployment and strong export prices as reason for a 3.5% growth in the current financial year, slowing to 1.5% in 2023–24. The Budget projects a deficit of $36.9 billion, lower than the forecast earlier this year of $78 billion.

Described as a sensible Budget for the current conditions, it contains various cost of living relief measures including cheaper child care, expanding paid parental leave and encouraging downsizing to free up housing stock. Key tax measures are targeted at multinationals, particularly changes to the thin capitalisation rules, and changes to deduction rules for intangibles.

Importantly, no amendments have been proposed to the already legislated Stage-3 individual tax rate cuts. Additional funding for a range of tax administration and compliance programs have also been announced. Finally, the fate of a suite of announced but unenacted tax measures, including a few that have been around for at least 10 years, has been confirmed.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. The tax, superannuation and social security highlights are set out below.

To read our comprehensive Budget report outlining the changes to taxation and accounting, please click below:

FULL BUDGET REPORT

Business

  • Electric vehicles under the luxury car tax threshold will be exempt from fringe benefits tax and import tariffs.
  • A number of Victorian and ACT-based business grants relating to the COVID-19 pandemic will be non-assessable non-exempt income for tax purposes.
  • Grants will be provided to small and medium-sized businesses to fund energy-efficient equipment upgrades.
  • The tax treatment for off-market share buy-backs undertaken by listed public companies will be aligned with the treatment of on-market share buy-backs.
  • The 2021–22 Budget measure to allow taxpayers to self-assess the effective life of intangible depreciating assets will not proceed.
  • Heavy Vehicle Road User Charge rate increased from 26.4 to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.
  • Australia has signed a new tax treaty with Iceland.
  • Additional tariffs on goods imported from Russia and Belarus have been extended by a further 12 months, to 24 October 2023.
  • Ukraine goods are exempted from import duties for a period of 12 months from 4 July 2022.
  • Technical amendments to the taxation of financial arrangements (TOFA) rules proposed in the 2021–22 Budget will be deferred.
  • Amendments to simplify the taxation of financial arrangements (TOFA) rules proposed in the 2016–17 Budget will not proceed.
  • The proposed measure from the 2018–19 Budget to impose a limit of $10,000 for cash payments will not proceed.
  • Proposed changes in the 2016–17 Budget to amend the taxation of asset-backed financing arrangements will not proceed.
  • The new tax and regulatory regime for limited partnership collective investment vehicles proposed in the 2016–17 Budget will not proceed.
  • The Pacific Australia Labour Mobility (PALM) scheme will be expanded and enhanced.

FBT and tariff exemptions for electric vehicles

Electric vehicles under the luxury car tax threshold ($84,916 for 2022–23) will be exempt from fringe benefits tax and import tariffs. To qualify for the exemption, the electric vehicle must not have been held or used prior to 1 July 2022. Legislation introducing the FBT exemption is before the Senate.

The FBT exemption ultimately provides an opportunity for individuals to purchase an electric vehicle under a salary sacrifice novated lease arrangement. Without the FBT exemption, any benefit of this type of arrangement can be negligible. This is especially the case when an employee’s business use percentage is very low or nil. A salary sacrifice arrangement effectively a saving for the user of an electric vehicle, as the payment of the vehicle will reduce their income tax. Along with the FBT savings, consumers of electric vehicle will also benefit from the removal of a 5% import tariff.

Despite the FBT exemption, an employer will still be required to report employees’ reportable car fringe benefits in the employees’ reportable fringe benefits amount. This reportable amount is part of the payment summary reporting requirements and is used to calculate various tax rebates and thresholds.

More business grants to non-assessable non-exempt income status

State-based business grants handed out during the COVID-19 pandemic are assessable income to the recipient unless the government places that grant in a special exclusion category. The government has announced the following Victorian and ACT business grants to be non-assessable non-exempt income for tax purposes:

This announcement is in addition to several other state-based business grants that have been give non-assessable non-exempt status since the beginning of the COVID-19 pandemic.

Energy efficiency grants for SMEs

Grants will be provided to small and medium-sized businesses to fund energy-efficient equipment upgrades.

The grants will be available to support studies, planning, equipment and facility upgrade projects that improve energy efficiency, reduce emissions or improve management of power demand. The government will provide $62.6 million over 3 years from 2022–23 for this measure.

Fuel tax credits — heavy vehicle road user charge increased

The Heavy Vehicle Road User Charge rate has been increased from 26.4 cents per litre to 27.2 cents per litre of diesel fuel, effective from 29 September 2022.

The previous rate of 26.4 cents per litre was announced in the 2021–22 Budget and commenced on 1 July 2021. The increased rate will reduce expenditure on the Fuel Tax Credit from the 2022–23 income year.

Individuals

  • The amount pensioners can earn in 2022–23 will increase by $4,000 before their pension is reduced, supporting pensioners who want to work or work more hours to do so without losing their pension.
  • To incentivise pensioners to downsize their homes, the assets test exemption for principal home sale proceeds will be extended and the income test changed.
  • 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.
  • The Paid Parental Leave Scheme will be amended so that either parent is able to claim the payment from 1 July 2023. The scheme will also be expanded by 2 additional weeks a year from 1 July 2024 until it reaches 26 weeks from 1 July 2026.
  • The maximum Child Care Subsidy (CCS) rate and the CCS rate for all families earning less than $530,000 in household income will be increased.
  • The current higher Child Care Subsidy (CCS) rates for families with multiple children aged 5 or under in child care will be maintained.
  • Legislation will be introduced to clarify that digital currency (or cryptocurrencies) will not be treated as foreign currency for income tax purposes.

Superannuation

  • Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.
  • The 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs and small APRA-regulated funds (SAFs) from 1 July 2022, has been deferred.
  • The 2018–19 Budget measure that proposed changing the annual audit requirement for certain self-managed superannuation funds (SMSFs) will not proceed.
  • A requirement for retirement income product providers to report standardised metrics in product disclosure statements, originally announced in the 2018–19 Budget, will not proceed.

Minimum age to make downsizer super contributions reduced

Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.

The downsizer contribution allows an individual to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home.

Both members of a couple can contribute and the contributions do not count towards non-concessional contribution caps.

The measure will take effect from the start of the first quarter after Royal Assent of the enabling legislation.

Proposed changes to SMSF residency requirements — deferred

The 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs and small APRA-regulated funds (SAFs) from 1 July 2022, has been deferred.

The proposed measure relaxes the residency requirements for SMSFs by extending the central control and management test safe harbour from two to five years for SMSFs. In addition, the active member test will also be removed for both SMSFs and SAFs.

The change will allow members to continue to contribute to their superannuation fund whilst temporarily overseas, ensuring parity with members of large APRA-regulated funds.

This measure will now take effect on or after the date of Royal Assent of the enabling legislation.

Income threshold increased for Commonwealth Seniors Health Card

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.

The government will also freeze social security deeming rates at their current levels for a further 2 years until 30 June 2024, to support older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.

This measure delivers on the Labor government’s election commitments as published in the Plan for a Better Future.

Need help?

If you would like assistance to interpret these changes and how they may affect your individual or business circumstances, please contact your Allan Hall Advisor on 02 9981 2300.

CONTACT ALLAN HALL

July

Super changes from 1 July 2022

Posted on | by Allan Hall

The changes outlined below were proposed in March’s Federal Budget and come into effect from 1 July this year.

If you’d like to talk with someone about how these changes could affect you, please contact Allan Hall’s Superannuation Team.

Change Before 1 July 2022 From 1 July 2022 onwards
You’ll no longer need to earn $450 or more in a calendar month to receive Employer Super (SG) contributions from your employer A person has to earn at least $450 in a month to be eligible for Employer Super (SG) contributions. The minimum earnings threshold of $450 per month will no longer apply. This means all employees, regardless of how much they earn, are entitled to receive Employer Super (SG) payments into their super accounts.
The withdrawal limit for the First Home Super Saver Scheme (FHSSS) is increasing The maximum you can save and withdraw using your super account under the FHSSS is $30,000. The maximum you can save and withdraw is increasing from $30,000 to $50,000.
The age you can make Downsizer contributions is reducing People aged 65 and over can contribute up to $300,000 to their super following the sale of their home. Couples could be eligible to contribute up to $300,000 each. You will be able to make downsizer contributions from age 60 instead of age 65.
Changes to the work test for people between age 67 and 74 People aged 67 to 74 can only make extra super contributions (ie not SG contributions) if they meet the Work Test rules. The work test To meet the work test you must be employed for at least 40 hours over 30 days. (The 30 days must all be in the same financial year the contributions are made). You won’t need to meet the Work Test when making extra contributions. Instead, you will only need to meet the Work Test (or work-test exemption) if you claim a tax deduction on personal contributions.
The age you can use the Bring-forward contributions rule is increasing The Bring-forward contributions rule allows you to contribute up to three years of after-tax contributions ($330,000) in any one year if: • you’re aged 67 or younger, and • have a total super balance less than $1.48 million. You will be able to use the Bring-forward contributions rule up to age 74 instead of up to age 67.
The minimum pension drawdown amount won’t be changing. In 2019, the government temporally reduced the minimum pension drawdown amounts by 50%. This was in response to the economic effect of COVID. The minimum pension drawdown is the minimum amount you must withdraw from your pension account each year. This amount depends on your age and is a % of your total balance. The government had planned to return the minimum pension drawdown amounts back to pre-COVID levels from 1 July 2022. It has now extended the reduced minimum pension drawdown level for another year. This means the drawdown amounts will stay the same for the 2022 financial year.

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General Advice Warning

The information in this brochure is of a general nature only and does not take into account your personal objectives, financial situation or specific needs.  We recommend that you consider your own financial position, objectives and requirements and seek advice from an authorised financial adviser before making any financial decisions. 

Allan Hall Business Advisers Pty Ltd is a Corporate Authorised Representative of Allan Hall SMSF Advisory Pty Ltd ABN 71 608 966 276 AFSL 485203. Allan Hall Financial Planning Pty Ltd is an Authorised Representative of Consultum Financial Advisers Pty Ltd  ABN 65 006 373 995 AFSL 230323.