2014/15 Federal Budget Update
What does it mean for you?
May 2014
• Insert your name, company name, contact details and
credentials here.
• Insert general advice message here
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A Transitional Budget
Young Aussies
Families with
kids
Higher income
earners
Pre-retirees
Retirees
Employers
Pensions
indexed to
lower rate
of inflation,
not wages
1.5% tax cut
for most
businesses
Retirement savings focus
Health care contribution
Jobseeker reforms Paid parental leave
Deregulation of
tertiary education
Changes to social
security benefits
Incentives to save for super still
intact, if you can afford it:
- Contribution caps still
indexed
- Penalties for contribution
breaches reformed
Loss of the tax
Changes to HELP
payback: sooner, offset for dependent
spouses
and at a higher
2% temporary tax ‘Restart’ program for older
rate (max 6%)
on income >$180k
workers
for 3 years
Financial support
for TAFE students
Super income stream will
now count towards your
Seniors Health Care Card
eligibility
Delayed SG
payment
dates and
rates
Young Australians
Jobseeker reforms
Jobseekers younger than 30 will wait 6 months before receiving Newstart or
Youth Allowance
Deregulation of tertiary education
Tertiary fees might increase (or decrease?)
Changes to HELP repayments
Payback now starts at $50,638k income, and the interest is likely to increase,
but capped at 6%
Financial support for TAFE students
Students of Diplomas, Advanced Diplomas and Associate Degree courses will
now be eligible for direct financial support
First home saver accounts abolished
Families with kids
Paid parental leave (PPL)
From 1 July 2015, an income cap of $100,000 per annum, including super
replaces the existing means test. May be extended to 26 weeks instead of 18
weeks
Changes to social security benefits
Family Tax Benefit A end-of-year supplement reduced to $600 from $726.35
Family Tax Benefit B end-of-year supplement reduced to $300 from $354.05
Eligibility threshold for Family Tax Benefit B reduced to $100k from $150k from 1
July 2015
When your youngest child turns six, you will no longer be eligible for Family Tax
Benefit B however transitional arrangements apply
Families with kids
Removal of dependent spouse tax offset
Benefit loss of approximately $2,400 from July 2014
Some relief for singles
Low income single parents will get an extra $750 per year for children aged
between six and 12 years.
Don’t forget…
Kids under 16 are exempt from the $7 health payment after their first 10 visits
Higher income earners
Temporary budget repair levy
Any income you earn over $180,000, may be subject to 2% extra tax for the
next 3 years.
Taxable income
Levy payable (pa)
$180,000
$0
$200,000
$400
$220,000
$800
$240,000
$1,200
$260,000
$1,600
$280,000
$2,000
$300,000
$2,400
Pre-retirees
No changes to super contribution caps
No change to contributions caps… and they’re still indexed
Relief if you breach the non-concessional contributions cap
“Restart” program for older workers
$10,000 over two years to employers who hire a previously unemployed 50+
worker
Pro rata available for part time employment
But on the other hand
Mature Aged Workers Tax Offset is abolished from 1 July 2014 for ALL
taxpayers.
Still to come
News about super preservation age
Retirees
Pensions indexed to a lower rate
Pension payments are now indexed to inflation, not wage growth
Deeming thresholds reduced
Reduced pension entitlements likely under the income test from 1 July 2017
Commonwealth seniors health card (CSHC) eligibility tightened
Your tax-free super income stream will now count towards your CSHC eligibility
Seniors supplement for CSHC holders, gone
Annual payments of $876.20 (singles) and $1,320.80 for couples scrapped from
20th September 2014.
Employers
Company tax cuts
800,000 businesses will get a 1.5% cut to the Company Tax Rate
Top 3,000 still on the hook
The top 3,000 will still pay a levy to help fund the paid parental leave scheme
Super Guarantee increases delayed
Remaining at 9.5% until 2018
And of course…
Repeal of the minerals resource rent tax and the carbon tax
For Everyone
Aged Pension age increase
Aged Pension age increased to 70 by 1 July 2035
No impact if you were born before 1 July 1958
Super won’t grow quite as fast
SG payments increases delayed.
Rate increasing to 9.5% on 1 July 2014 and remaining at 9.5% until 2018
For Everyone
Social security thresholds frozen against indexation
Social security thresholds will not increase for 3 years
Austerity measures
We’ll all have to make choices about how we spend our household budget
(health, fuel, university fees)
For Everyone
Some pressing questions
How will you bridge the gap between your retirement and Aged Pension
age?
How will you make up for the compound effect of the delay in increase in
Super Guarantee payments?
Will there be indirect impacts on you because of changes impacting a family
member?
What lifestyle changes would you be willing to make because of cuts to
social security benefits?
What are the ‘non-negotiables’ in your family budget?
Are your current financial strategies still relevant?
Disclaimer
This information is issued by <insert dealer group or adviser name> and is a summary of <insert dealer group or adviser name> understanding of the
proposed Federal Budget 2014/15 changes announced on 13 May 2014.
The changes are subject to the passing of legislation and, accordingly, may not become law or may change. Please note that the information is based on
<insert dealer group or adviser name> interpretation of the proposed changes as at the date of issue of this document. Accordingly, you must not do or
refrain from doing anything in reliance on this information without obtaining suitable professional advice.
This document may not be reproduced, distributed or published by any recipient for any purpose. It has been prepared without taking into account the
objectives, financial situation or needs of any person.
Whilst every effort has been taken to ensure the information used is accurate and reliable, no warranty is given as to the accuracy of the information and no
liability is accepted for your reliance on the information.
Statements made during the presentation do not and are not intended to represent financial advice or a recommendation to hold, acquire or dispose of any
investment.
Before acting on this information you should consider whether the information is appropriate having regard to your personal needs, financial circumstances
and objectives. Investors should always read the Product Disclosure Statement for the relevant product and seek financial and tax advice before making an
investment decision.
Any investment is subject to investment risk, including possible repayment delays and loss of income and principal invested. Before making any investment
decision you need to consider whether there are any adverse consequences for you, including exit fees, other loss of benefits or increase in investment
risks.
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