Temporary reduction in fuel excise
The Government will halve the fuel excise on petrol and diesel, a reduction of 22.1 cents per litre from 30 March 2022. This is a temporary measure for six (6) months ending on 28 September 2022.
It aims to provide temporary relief from the current high fuel prices for individuals and families.
Cost of living payment
The Government will provide a one-off $250 economic support payment to eligible recipients to help with cost of living pressures. Eligible recipients are Australian residents in receipt of the age pension and other government support payments and certain concession card holders. The payment will be made in April 2022.
One-off cost of living tax offset for low and middle income earners
The Government announced a one-off cost of living tax offset through an increase to the Low and Middle Income Tax Offset (LMITO) for the 2022 income year. The proposal will increase the LMITO by $420 for the 2022 income year.
This change will increase the maximum LMITO benefit to $1,500 (up from $1,080) for individuals and $3,000 for couples. The LMITO benefit will be received from 1 July 2022 when individuals lodge their tax return for the 2022 income year.
There was no extension to the LMITO which ceases to apply after the 2022 income year.
Supporting home ownership
The Government is expanding on the Home Guarantee Scheme announced in last year’s budget by increasing the number of places to 50,000 for the 2023 to 2025 financial years. There will be an ongoing 35,000 places a year beyond 2025 but only under the First Home Guarantee.
This Scheme supports eligible homebuyers to purchase a home with a lower deposit (5 percent) without lenders mortgage insurance.
The 50,000 places are to be allocated:
- 35,000 places per year for first home buyers under the First Home Guarantee
- 5,000 places per year will be available under the Family Home Guarantee for eligible single parents with dependents
- 10,000 places per year will be available under a new Regional Home Guarantee to support homebuyers who have not owned a home for at least five (5) years to purchase a new home in a regional area
The Government is proposing to make changes to the existing 18 week Paid Parental Leave Scheme and two (2) week Dad and Partner Pay Scheme by rolling these payments into a single 20 week scheme which is designed to be fairer and provide greater flexibility to families.
The new scheme will allow parents to share the Paid Parental Leave entitlement in a way that suits their family and enables single parents to benefit from the full 20 weeks pay at the minimum wage, now equal to what a household with two (2) parents is entitled to under the existing schemes.
There is also an extension to the means testing to include a household income threshold of $350,000. Under the current Paid Parental Leave Scheme there is an income cap on the primary caregiver making the claim of $151,350, meaning some families will be ineligible for the scheme even where their partner has a lower or no income. This change is designed to support those families where the primary earner is to become the primary caregiver. No families will be worse off as a result of this additional means test.
It is expected that these changes will be introduced no later than 1 March 2023.
Retirement, superannuation and aged care
It was a quiet night for the superannuation sector in the Budget with the only announcement being an extension of an existing concessional provision with pension drawdowns.
The Government has extended the 50 percent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products for a further year until 30 June 2023.
Given ongoing volatility, this change will allow retirees to avoid selling assets in order to satisfy the minimum drawdown requirements.
Retirees who may have other sources of income or who simply don’t need to draw down on their super for living expenses will benefit most, allowing them to keep more money in the favourably taxed superannuation environment.
The Treasurer also pledged that the Government will not increase taxes on superannuation if re-elected.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.