Australian Federal Budget 2016 – How it Affects Individuals
Treasurer Scott Morrison has handed down his first Federal Budget – the Coalition Government’s third. The winners are low and middle income earners, unemployed youth and small business, and there are significant changes to superannuation. Peter Hogan, Senior Technical Manager,
Date of effect: Immediate
• A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30 pm on 3 May 2016.
Date of effect: 1 July 2016
• The income tax threshold at which the 37% tax applies will increase to $87,001 pa, from the current $80,001 pa.
• The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17.
• Further tax concessions will apply in future financial years.
Date of effect: 1 July 2017
• The annual cap on concessional (pretax) super contributions will reduce to $25,000, regardless of age.
• Concessional super contributions may exceed the annual cap if certain conditions are met.
• Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not.
• Tax deductions will be able to be claimed for personal contributions regardless of employment status.
• A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions.
• Earnings on investments held in ‘transition to retirement’ pensions will be taxed at 15% (currently 0%).
Measures not announced or affected
• Negative gearing
• Age pension and other social security benefits
Image Courtesy - PWC
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