With many Australian families undoubtedly feeling the pinch of increased living costs and the impact of tightened household budgets, it’s understandable that many are hoping this year’s Federal Budget will help to relieve some of that pressure.
And the good news is….fortunately it has.
The 2019-20 Federal Budget focused on two main areas to provide relief for Australian families – assistance for welfare recipients and personal tax cuts.
Assistance to welfare recipients
To offset increasing living costs, particularly for essential utilities such as electricity, an immediate one-off payment is proposed of $75 for individuals and $125 per couple for eligible welfare recipients to assist with their next power bill.
This includes those on the Age Pension, Carer Payment, Disability Support Pension, Parenting Payment Single, the Veterans' Service Pension and Veterans' Income Support Supplement, Veterans' disability payments, War Widow(er)s Pension, and those receiving permanent impairment payments under the Military and Safety Rehabilitation and Compensation Acts.
Tax relief for low and middle income earners
The proposed acceleration of personal tax cuts couldn’t have come at a better time for Australian families.
Originally announced in the 2018-19 Budget, this year’s Budget has proposed to bring forward tax cuts for low and middle-income earners.
Families will experience immediate relief from this financial year, with the Government more than doubling the “low and middle income tax offset” (LMITO) up to $530 a year to a new maximum of $1,080. If this proposal becomes law, those eligible will be able to receive the benefits when they lodge their tax return for the current financial year.
Those who will benefit the most from this change will be families with taxable incomes between $48,000 and $90,000. They may receive the full $1,080 reduction in tax for the 2018-19 financial year ($2,160 for dual income families).
Further tax cuts are also proposed to apply from the 2022-23 and 2024-25 financial years benefiting low and middle income earners.
It is always important to remember that at this point, the Budget measures are only statements of proposed changes, and are not yet law.
With an election expected to occur in May 2019, it is still uncertain whether these proposals will become law.
Seek professional advice
Until these changes become law, you may want to consider seeking professional advice to understand how the implications of these changes may impact your family’s financial situation.
The information on this website has been prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian Credit Licence 233714 (Westpac), and is current as at 2 April 2019.
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The tax position described on this website on the 2019-20 Federal Budget update is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. It is important to note that the policies outlined in this website are yet to be passed as legislation and therefore may be subject to change or further refinement. Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investments held in superannuation. The Government has set caps on the amount of money that you can add to your superannuation each year and over your lifetime on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or registered tax agent or visit the ATO website.