2013 Federal Budget

2013 Federal Budget

The 2013 Federal Budget only contained a few surprises as many of the measures had already been announced.

Note: These measures are proposals only and may or may not be made law. A change of Government in September 2013 may mean that these proposed changes may not even happen!

Summary

• The Medicare Levy will increase by 0.5% to 2% pa from 1 July 2014.
• The $5,000 Baby Bonus will be removed from 1 March 2014. Instead, families eligible for Family Tax Benefit (Part A) will receive $2,000 following the birth of their first child, and $1,000 for each subsequent child.
• The superannuation concessional contribution cap will increase from $25,000 pa to $35,000 pa from:
• 1 July 2013 for people 60 and over, and
• 1 July 2014 for people 50 and over.
• From 1 July 2014, all pension asset earnings in Super Funds above $100,000 will be taxed at 15%.

Reduced tax concessions for high-earners

In the 2012 Federal Budget, the Government announced that from 1 July 2012 individuals with incomes above $300,000 pa will pay an additional 15% tax on their concessional super contributions. Draft legislation for this measure was recently released and was confirmed in the 2013 Budget.

No changes to personal tax rates

The proposed changes to the marginal tax rates and income thresholds which were due to take effect from 1 July 2015, will no longer be going ahead.

The above table summarises the thresholds and taxation rates that will continue to apply:

Phase out the Net Medical Expense Tax Offset

Effective 1 July 2013, this offset will be phased out. Transitional arrangements will apply for 2014 and 2015 for individuals who have claimed the offset in the 2013 year.

Early HECS-HELP repayments removed

Up-front and voluntary early repayment discounts under the HELP program will be removed in 2014. University and other eligible students will no longer receive a discount if they pay their fees up-front or repay their HELP debt early.

Superannuation Guarantee Contributions

On 29 March 2012 it became law that the SGC be increased to 9.25% from 1 July 2013. This will continue to increase every financial year to 12% by 2019/2020. Refer to the table below to see the new rates:

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This article is provided as general information only and does not consider your client’s specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of a client’s specific circumstances. © 2013 ChangeGPS Pty Ltd