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What Does The Federal Budget Mean For Me?

Federal-Budget-1024x578 What Does The Federal Budget Mean For Me?

The Australian Government has set out the Federal Budget for the 2018/2019 Financial Year and there’s a lot to look through but let’s focus on what might have an immediate impact on you.

Pensioners

Under the expanded Pension Work Bonus if you are an age pensioner from July 1st 2018 you’ll now be able to earn more without it affecting your pension payment. Pensioners can now earn up to $300 per fortnight without it reducing their pension payment. With this in place pensioners can earn an extra $1300 per year more than what they could previously.

Tax Offset

For your average John/Jane tax payer the Government is introducing a Low and Middle Income Tax Offset of up to $530 a year. This will be available to the tax payer as a lump sum once the ATO issues their Notice of Assessment. The offset increases in increments for those earning between $37,000 and $48,000. Anyone earning between $48,000 and $90,000 will receive the maximum of $530. While those earning $90,000+ will find that the amount will gradually decrease to the point of being $0 at a taxable income of approximately $125,000.

Bracket Creep

The Government is also trying to eradicate “bracket creep”. For those unfamiliar with bracket creep this is where you earn a small pay increase that pushes you into the next income tax bracket. The problem is that now that you pay more tax you don’t really reap the benefit of receiving more income. The upper limit of the 32.5 per cent tax bracket is being pushed out from $87,000 to $90,000, while in the year 2022 they will also push out the 19 per cent bracket from $37,000 up to $41,000. Eventually the idea is that the 37 per cent tax bracket will be completely eliminated by 2024.

What does this all mean for you?

While some of these changes will come into effect in the new financial year others are still a year or more away. At the end of the day these new policy measures mean that pensioners can now work more and tax payers will now pay less tax. This just means more income for your average Jane/John! Make sure to keep an eye on these things as small changes brought on by the actions of the Government can mean big difference to your chances of obtaining the debt financing you’re looking for.

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