Personal Income Tax

New Tax Legislation Effective 1 July 2014

New changes have come into effect for the new fiscal year, and many more are simply awaiting approval. Be aware of the following changes to tax legislation, effective as of 1 July 2014.

Currently in Effect


1) Concessional contributions cap

a. The general concessional contributions cap has been raised from $25,000 to $30,000.

2) Medicare levy

a. The Medicare levy was increased from 1.5% to 2% in order to fund DisabilityCare. This increase does not apply to surcharges.

3) Superannuation guarantee

a. The superannuation guarantee was increased to 9.5% in order to amass a greater retirement savings for taxpayers. The guarantee will remain at 9.5% until 2018, when the guarantee will increase by 0.5% every year until it reaches 12%.


Pending Approval

The following budgetary changes have not yet been passed, but are subject to Parliamentary approval in the 2014-15 financial year.  


1) Family Tax Benefit Rates

a. The current Family Tax Benefit will remain at a fixed rate for the next two years.

2) Eligibility thresholds for certain social welfare payments

a. Non-pension payment eligibility thresholds for certain social welfare payments, including the Family Tax Benefit, Child Care Benefit, Child Care Rebate, Newstart Allowance, Parenting Payments, and Youth Allowance, will remain fixed for the next three years.


Proposed Abolition

1) Dependent Spouse Tax Offset

a. The Dependent Spouse Tax Offset is set to be eliminated from the legislation.

2) Annual Seniors Supplement

a. The Annual Seniors Supplement is also set to be eliminated.

4) Mature age worker tax offset

a. The funds from this tax offset will be redirected to a new subsidy program aimed at businesses that employ eligible, mature-age job seekers.

5) Indexation on Clean Energy Supplement

a. Rather than continuing to index the Clean Energy Supplement, the government will simply maintain a fixed rate for this social welfare payment.

New Programs

1) Tax receipts for individuals

a. If you’ve ever been curious to know exactly where your tax money goes, you’ll appreciate the new tax receipts for individuals. The receipt will show how your tax dollars were allocated to each budget area.

2) Support Loans for Tradesmen

a. Replacing the “Tools for your Trade” program, Trade Support loans totalling as much as $20,000 will be available to those who are enrolled in a 4-year apprenticeship.

Other Changes to Current Programs

1) Reduction to the R&D Tax Incentive rates

a. Companies with turnover less than $20 million will now pay 1.5% less in the refundable R&D tax offset, bringing the total down to 43.5%.

b. Companies with turnover greater than $20 million will now pay 1.5% less in the non-refundable R&D tax offset, bringing the total down to 38.5%.

2) Temporary budget repair levy

a. An additional 2% tax levy will be applied on any income earned beyond $180,000.

3) Changes to Parenting Payment Single index

a. The Parenting Payment Single will be indexed according to the consumer price index only.


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