May 9th, 2012 | Accounting News, Consumer News, Financial Planning News, Tax Advice and Updates

This is a short summary of The Budget for the 2012-13 financial year.

Benefits to Individuals

  • $1.8 billion to increase Family Tax Benefit Part A for all eligible families, commencing 1 July 2013
  • $1.1 billion for a new Supplementary Allowance for the unemployed, students and parents with young children, on income support, with the first payment commencing March 2013
  • In addition, an extra $2.1 billion over five years on a new Schoolkids Bonus, paid directly to eligible recipients
  • From 1 July 2012, more than tripling the tax free threshold from $6,000 to $18,200, freeing up to 1 million Australians from the need to lodge a tax return
  • Exemptions for the temporary flood and cyclone reconstruction levy will be extended to individuals who were eligible for an Australian Government Disaster Recovery Payment in 2010/11 as well as certain individuals affected by a natural disaster in 2011/12.

Investing in key health services

  • $515.3 million to improve dental services and strengthen the future dental workforce
  • Delivering 76 major new regional health infrastructure projects across Australia, worth $475 million
  • The Medicare levy low income thresholds will be increased to $19,404 for individuals and $32,743 for families for the 2011/12 income year.
  • $1 billion over four years for the first stage of an National Disability Insurance Scheme. 10,000 participants will start being assessed from July 2013, increasing to 20,000 participants from mid 2014

Building an aged care system for the future

  • A $3.7 billion package to ensure a better, fairer, more sustainable and nationally consistent aged care system
  • Increasing the number of Home Care packages by nearly 40,000, to nearly 100,000, over the next five years

Capital Gains Tax

  • Changes will be made to the application of the scrip-for-scrip roll-over and small business concessions to trusts, super funds and life insurance companies.
  • The revenue asset and trading stock roll-overs that apply to the exchange of interests in a company or unit trust for shares in another company will be broadened.
  • The CGT scrip-for-scrip roll-over integrity provisions will be strengthened.
  • CGT: temporary loss relief will be made available to facilitate super reforms.
  • Minor extensions to the CGT exemptions for certain compensation payments and insurance policies will be made.
  • Minor amendments to natural disasters CGT relief will be made.
  • CGT: refinements to income tax law for deceased estates will be made

International

  • The personal income tax rates and thresholds that apply to non-residents’ Australian income will be adjusted.
  • The CGT discount for non-residents will be abolished for gains accrued after 7:30pm (AEST) on 8 May 2012.
  • The managed investment trust final withholding tax rate will be increased from 7.5% to 15% from 1 July 2012.

Superannuation

  • The start date of the 2010/11 Budget measure increasing concessional contribution caps for individuals over 50 with low superannuation balances will be deferred by two years, from 1 July 2012 to 1 July 2014.
  • From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions increased from 15% to 30% (excluding the Medicare levy).
  • From 1 July 2012, the employment termination payment (ETP) tax offset will be limited so that only that part of an affected ETP, such as a golden handshake, that takes a person’s total annual taxable income (including the ETP) to no more than $180,000 will receive the ETP tax offset.

As a result of this Federal Budget, there are many changes that are set to take place over the next few financial years.

For more information about how anything in the 2012 Budget may affect you, or for any other financial planning, tax or accounting related queries please contact Peter Quinn here at Quinn Financial Planning by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.