Federal Budget Summary 2018-19

2018-05-14

Quick Federal Budget Summary.

The 2018-19 Federal Budget has an emphasis on retirement planning and contains several important considerations which may affect both retirees and pre-retirees, explored further below.

It’s important to note that at this point in time, these proposed measures are not yet law and may be subject to change.

Personal income tax bracket thresholds

  • Over a seven-year period, the Government has proposed changes to the personal income tax thresholds and to phase-out the 37% tax rate.

Two percent Medicare Levy retained

  • The Government will retain the Medicare Levy rate at 2.0% and will not proceed with the proposed increase to 2.5% of taxable income from 1 July 2019

Low and Middle Income Tax Offset

  • A new non-refundable Low and Middle Income Tax Offset (LMITO) will be introduced.
  • The LMITO will be a temporary measure applying from 2018-19 until 2021-22.
  • The maximum annual offset will be $530 and will cut out for those with a taxable income above $125,333 per annum.

Superannuation work test exemption

  • From 1 July 2019 the Government will introduce an exemption from the work test for voluntary contributions to superannuation.
  • This is available for retirees aged 65 to 74 with superannuation balances below $300,000 in the first financial year that they do not meet the work test.
  • The exemption will be available for 12 months from the end of the financial year in which they last met the work test.

Increasing the maximum number of members

  • Self-managed Superannuation Funds (SMSFs) From 1 July 2019, the maximum number of members allowable in a new or existing self-managed superannuation fund (SMSF) or small APRA fund will increase from four to six members.

Introduce an Income Test for Carer Allowance

  • From 20 September 2018 the Government will introduce a $250,000 annual Income Test threshold for the Carer Allowance (currently $127.10 per fortnight) and Carer Allowance (Child) Health Care Card.

You can download a Quick Budget Summary in the link at the bottom of this page
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Drew Browne

Drew specialises in helping people protect and provide for what matters most in their lives. He's an award-winning writer, speaker, financial adviser and business strategy mentor.  His company Sapience Financial and Investment Services is a Certified B Corp committed to using business solutions for good in the community and a member of the international B1G1 Business for Good Giving Community.  Drew writes for successful Small Business Owners and Entrepreneurs at Smallville, his blogs can be read on Amazon.com and in 2017 Drew was recognised in the Australian Westpac Businesses of Tomorrow national awards.

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Drew Browne

Sapience Founder & Director.
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