New Financial Year Changes

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New Financial Year Changes

Minimum pension changes

To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% in the 2019–20 and the 2020–21 financial years.

Early Super access

The Federal Government is allowing individuals affected by the economic impacts of coronavirus to access up to $10,000 of their superannuation savings in 2019-20 and a further $10,000 in 2020-21 ($20,000 in total). Individuals will not need to pay tax on amounts released, and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

Income tax relief for low and middle-income earners

The low and middle-income earners will see a reduced tax amount up to $1,080 per annum.

Taxpayers with a taxable income of less than $37,000 will receive a benefit up to $255.

If taxable income is between $37,000 and $48,000 you are entitled to receive $255, plus an amount equal to 7.5% to the maximum offset of up to $1,080.

Taxpayers with a taxable income between $48,000 and $90,000 will now be eligible for the tax offset of $1,080.

The Australian Taxation Office (ATO) said they will retrospectively implement these tax cuts if the parliament passes the proposed changes to the legislation.

Family Tax Benefits

From 1 July 2020, there will be changes to the Family Tax Benefit. The threshold is set to increase from $94,316 to $98,988. The families above this tax bracket will see a reduced benefit by 30% for every dollar they earn over $98,988.

Tax changes for Small Businesses

From 12 March 2020 until 31 December 2020, the instant asset write-off threshold is $150,000 (up from $30,000).

Eligibility range covers businesses with an aggregated turnover of less than $500 million (up from $50 million). Businesses with a turnover of $500 million or more are not eligible to use instant asset write-off.

From 1 January 2021, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.

Childcare subsidy rates

From July 1, 2020, the subsidy will be contributed based on a family's combined income with the following thresholds: