2021-22 Budget Key Highlight

The Federal Budget was presented recently and we have gone through the budget and have summarised the following points which might be useful for you (Please note some of these changes/proposals from the government may not yet be legislated):

For Individuals:
• Low Income Tax Offset amount has increased from $445 to $700 for those earning up to $37,500 per year
• The threshold of the 19% personal income tax bracket has increased from $37,000 to $45,000
• The threshold of the 32.5% personal income tax bracket has increased from $90,000 to $120,000
• Low and Middle Income Tax Offset is extended till 2021-22 which is worth up to $1,080 for individuals or $2,160 for dual income couples.

Home Buyer Schemes
• First Home Super Saver Scheme: From 1 July 2022, eligible individuals will be able to release up to $50,000 (currently $30,000) from voluntary contributions under the scheme to assist with the purchase of their first home.
• Family Home Guarantee, which provides opportunity to eligible single parents with dependents to build a new home or purchase an existing home with a 2 percent deposit, subject to individual’s ability to service a home loan. 10,000 family home guarantees will be made available over four financial years beginning from 1 July 2021.
• First Home Loan Deposit Scheme (FHLDS) Under this scheme eligible first home buyers can purchase a home with a deposit of as little as 5% and remaining 15% is guaranteed by National Housing Finance and Investment Corporation (lenders criteria apply). Additional 10,000 scheme places will be available from 1 July 2021 to 30 June 2022.

• From 1 July 2022 People aged 67 to 74 will be able to make non-concessional or salary sacrificed superannuation contributions without meeting a work test, subject to existing caps.
• The minimum income threshold of $450 per month will be removed, so all eligible employees will receive super guarantee contributions.
• The Super Guarantee rate is increasing to 10% from 1 July 2021 and then gradually to 12% by 2025.
• From 1 July 2022 the Government is proposing to lower the age to make tax-free contributions to their super from the proceeds of selling their homes from 65 to 60. Other eligibility rules for downsizer contributions will remain unchanged.
• From 1 July 2021, the concessional contributions cap increases to $27,500

For Business:
Company Tax Rate Changes – The full company tax rate has remained the same at 30% but the tax rate for the base rate entity which has aggregated turnover less than $50 million is 26% for 2020-21 and 25% from 2021-22.

Carry Back Tax Losses – Eligible entities can carry back their tax losses in 2019-20, 2020-21 or 2021-22 to the previous year 2018-19, 2019-20 & 2020-21 where they had tax liability and it may result in cash refund, reduced tax liability or reduction in debt owing to the ATO.

Temporary Full Expensing – Enables businesses with aggregated turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets. This rule applies to assets acquired between 7.30 pm AEDT on 06 October 2020 and 30 June 2022.

Supporting Apprenticeships – All businesses and group training organisations that engages an Australian apprentice between 5 Oct 2020 to 31 Mar 2022, may be eligible for a subsidy of 50 percent of the wages paid to a new or recommencing apprentice of trainee for a 12 month period from the date of commencement to a maximum of $7,000 per quarter.

Boosting of wage subsidies – Wage subsidies for eligible jobseekers on job active, Transition to Work and Parents Next payments. Business may be able to get up to $10,000 (GST inclusive) when you hire an eligible new employee (Eligibility criteria applies)

To read further please click the link below: