This years Budget featured billions of dollars in spending to boost the economy and provide tax relief and financial assistance for many Australians. Plenty of sugar-hits to stimulate spending and drive the economy out of recession.
Those set to benefit most include low and middle income earners, business owners, young workers and social security recipients.
Some of the key initiatives are outlined below:
Social security support payments
Start spending was the message from the Treasurer and there are handouts to help.
On top of earlier payments, the Government will provide two separate $250 economic support payments, to be made from November 2020 and March 2021 to eligible recipients of the following Centrelink payments and health care card holders:
- Age Pension & Disability Support Pension
- Carer Payment
- Carer Allowance
- Family Tax Benefit
- Pensioner Concession Card holders
- Commonwealth Seniors Health Card holders
- Eligible Veterans Affairs payment recipients & concession card holders.
Personal income tax savings
The Government won’t tell you how to spend your money, but they can give you a tax-break to help you keep more of what you earn.
The tax cuts proposed in the budget are likely to benefit pensioners and those on low and middle incomes as the Government hopes they are “more likely to spend” the extra cash.
The Government will bring forward the second stage of its Personal Income Tax Plan by two years to 1 July 2020.
The upper threshold of the 19 per cent personal income tax bracket will increase from $37,000 to $45,000. The upper threshold of the 32.5 per cent personal income tax bracket will increase from $90,000 to $120,000.
The low income tax offset (LITO) will increase from $445 to $700. The low and middle income tax offset (LMITO) will be retained for 2020/21 only.
Despite much speculation, the Government has not made any unexpected changes to the superannuation system for the 2020-21 financial year. Previously announced COVID-19 measures in relation to early access to super and pension minimum drawdown relief will remain for 2020/21 only.
Commencing 1 July 2021, the Your Future, Your Super package will improve the superannuation system by:
- Preventing the creation of unintended multiple superannuation accounts when employees change jobs by “stapling” super funds members.
- Super fund members will have access to a new online comparison tool which will encourage funds to compete harder for members’ savings. This tool only relates to MySuper default members. If you haven’t chosen a super fund your employer must pay your super into a MySuper fund.
- MySuper products will be required to meet an annual objective performance test. Those that fail will be required to inform members.
- The Government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of new Annual Members’ Meetings.
The Government has announced a significant suite of business support measures intended to kick-start investment and help businesses manage the current economic downturn.
- Eligible businesses can immediately deduct the full cost of eligible capital assets acquired between now and 30 June 2022.
- Businesses that hold assets eligible for the enhanced $150,000 instant asset write-off will have an extra six months, until 30 June 2021, to first use or install those assets.
JobMaker payment for businesses
To support employment, the Government has announced a weekly payment for businesses who hire eligible new employees. The payment will last for twelve months and is available immediately.
The JobMaker Hiring Credit is aimed at filling the gap when the JobKeeper scheme ends next March.
To be eligible, new employees must be between 16 and 35 years old and employed for at least 20 hours per week.
JobKeeper payment extension
The JobKeeper Payment extension announced on 21 July 2020 provides continued support until 28 March 2021, with the Payment targeted to those businesses that continue to be most significantly affected by the economic downturn.
The level of the JobKeeper Payment is being tapered and a two-tiered payment is also being introduced to better match the payment with the incomes of employees. The ATO will also be given additional resources to manage the JobKeeper and JobMaker programs.
Aged Care funding
To support older Australians accessing aged care the Government will commit close to $3 billion of measures to address recommendations from the Royal Commission as well as COVID-19 related issues.
The Government will provide $2.0 billion over four years from 2020-21 to further support older Australians accessing aged care by providing additional home care packages as well as continuing to improve transparency and regulatory standards. Funding initiatives include:
- The release of an additional 23,000 home care packages across all package levels
- $4.6 million over two years from 2020-21 to review the support care needs of senior Australians who live in their own home and determine how best to deliver this care in the home.
Please do not hesitate to contact us if you wish to discuss how the above information may impact your personal situation.