The Federal Government handed down the 2022-23 Federal budget on Tuesday the 29th of March 2022. We have outlined the key tax and other assistance measures below:
Low and Middle Income Offset (LMITO) increased
The previously legislated LMITO will be increased for the 2021-22 financial year by $420 (dubbed by the Government the ‘cost of living’ tax offset), meaning individual taxpayers earning less than $126,000 can receive a maximum $1,500.
This offset has not been extended for the 2022-23 financial year.
Medicare Levy Low Income Threshold
The ATO has announced an increase to the low-income threshold for singles, families, seniors and pensioners in line with recent movements in CPI. Where an individual’s taxable income is below this threshold then the individual ought to be exempt from paying the 2% Medicare levy.
Reduction in minimum superannuation drawdown rates extended
The temporary 50% reduction in superannuation minimum drawdown requirements for account-based pensions and similar products has been extended to 30 June 2023.
Small business 20% deduction boost for skills training and digital adoption
Small businesses will receive an additional 20% tax deduction for eligible expenditure on external training for employees and digital technology investment (For example, $100 of eligible expenditure will provide a $120 tax deduction). The deduction boost will apply to eligible expenditure incurred from budget night through to 30 June 2024 (for skills training) and 30 June 2023 (for digital adoption).
Lowering tax instalments for small business
GST and PAYG instalments are normally adjusted each year using a GDP adjustment or uplift. For the 2022-23 income year the uplift factor has been reduced from 10% to only 2%
Tax treatment of COVID-19 Grants
The Government have announced additional state and territory COVID-19 grant programs have been made eligible to be treated as Non-Assessable Non-Exempt income (NANE). This includes grant such as the NSW Commercial Landlord Hardship Grant and the NSW 2022 Small Business Support Program.
$250 Cost of Living Payment
A one-off $250 ‘cost of living’ payment will be made to eligible pensioners, welfare recipients, veterans and concession card holders in April 2022.
Temporary reduction in fuel excise
The Government will temporarily reduce the excise that applies to petrol and diesel by 50% for 6 months from Budget night. That is, the current 44.2 cents per litre excise rate will reduce to 22.1 cents per litre from Budget night.
Apprentice wage subsidy extension
The previously legislated Boosting Apprenticeship Commencement (BAC) and Completing Apprenticeship Commencements (CAC) have been extended to allow businesses to put on further apprentices up to 30 June 2022 and be eligible for the subsidies.
If you wish to discuss any of the budget announcements further please contact our office.