Federal Budget Summary 2018-19

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.