There are a number of changes on the way that will affect individuals and families from 1 July 2012. Do you know what’s changing and how it will impact your finances?
Tax rates change as the tax-free threshold rises from $6,000 to $18,200. The marginal rate is 19% for individuals earning up to $37,000, then 32.5% up to $80,000, 37% for up to $180,000 and 45% beyond that. The low-income offset reduces from $1,500 to $445 for individuals earning up to $66,666.
Private health insurance rebate will be means tested and individuals are not entitled to their existing rebate rate if their single income is $84,001 or more, or if their family income is $168,001 or more.
The following offsets have been consolidated: the invalid spouse, carer spouse, housekeeper, housekeeper (with child), child-housekeeper, child housekeeper (with child), invalid relative and parent/parent-in-law tax offsets. The new offset is based on the highest rate of the existing offset it replaces.
Indexation of the Baby Bonus has been paused for three years and from September 1, 2012, the bonus will be cut from $5,437 to $5,000.
SchoolKids Bonus replaces the Education Tax Refund. Families who qualify for Family Tax Benefit A will receive a cash hand-out of $820 for every high-school child and $410 for every primary school child – with effect from January 1, 2013.
Mature age worker tax offset will be phased out by only allowing individuals born before July 1, 1957 to access this offset.
Employment termination payment (ETP) tax offset means tested so only the part of an ETP that takes a person’s total annual taxable income to no more than $180,000 receives the tax offset.
Non-resident taxpayer rate changes where the first two marginal tax rate thresholds for non-residents merge into a single threshold with a marginal tax rate of 32.5%, applying to all taxable income below $80,000.
Age Pension recipients who are overseas for more than 26 weeks are paid their maximum pension entitlement only if their Australian Working Life Residence (AWLR) is 35 years or more.
The new financial year brings many changes. For an overview of changes ahead for business, individuals and families and superannuation, download our PDF information sheet titled, Changes from July 1, 2012.
Download Link: Changes from July 1, 2012