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Federal Budget highlights *yawn*

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 threshold

  • 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.


author pic drew browneDrew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

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