Budget 2009 - 2010
Fri Jul 17 2009Personal Taxation
The personal tax rates announced during the 2008 Federal Budget will be honoured.
From 1 July 2009, the following tax rates will apply:
Margin Tax Rates Taxable Income |
Tax Payable |
$0 - $6,000 |
Nil |
$6,000 - $35,000 |
15% of each $1 above $6,000 |
$35,001 - $80,000 |
30% of each $1 above $35,000 + $4,350 |
$80,000 - $180,000 |
40% of each $1 above $80,000 + $17,850 |
$180,001 and above |
45% of each $1 above $180,000 + 55,850 |
The previously announced increase in the maximum amount of the low income tax offset (LITO) will be honoured.From 1 July 2009 the Low Income Tax offset will operate as follows:
Low income earned tax offset (LITO) Taxable Income: |
Offset |
$0 - $30,000 |
$1,350 |
$30,001 - $63,750 |
$1,350 [(taxable income - $30,000) x 0.04)] |
$63,750 and above |
Nil |
The Medicare levy low-income threshold will also increase from 1 July 2009 to $17,794 for individuals and $30,025 for individuals who are members of a family.
The Foreign Service income exemption for workers, other than certain aid and charitable workers, who spend greater than 90 continues working overseas will be abolished 1 July 2009.
The non-commercial loss provisions will be amended as at 1 July 2009 to prevent high income earners offsetting excess deduction from non-commercial business activities.Taxpayers with an adjusted taxable income of over $250,000 will have excess deductions quarantined to the business activity in which they were incurred.
PAYG Payment Summaries issued from 1 July 2009 will disclose all salary sacrificed superannuation contributions.
The government announced a 50% reduction in the concessional contributions cap to $25,000 (or $50,000 for those over 50).This will apply for the year ended 30 June 2010.The non-concessional contributions cap will remain at $150,000 for financial year 2009/10 (or $450,000 under the 3-year 'bring forward' rule).
The superannuation co-contribution scheme will be reduced to 100% for contributions made during the financial years 2009/10, 2010/11 and 2011/12.This co-contribution will be increased to 125% for the financial years 2012/13 and 2013/14 and will be restored to 150% for the financial year 2014/2015 onwards.
Centrelink / Family Assistance Office
From 20 September 2009, Pensioners who receive the Age Pension, Disability Suport Pension, Carer Payment, Veteran's Service Pension, Income Support Supplement, War Widowers Pension, Bereavement Allowance, Wife Pension and Widow B Pension will receive an additional:
- $32.49 a week for single pensioners on full rate of pension and
- $10.14 a week for pensioner couples (combined) on full rate of pension.From 20 September 2009 a work bonus will replace the existing Pension Bonus Scheme. Under the work bonus, half of the first $500 fortnightly employment income will not count as part of the income test, part pensioners who work will retain more of their pension entitlement. Please note however, existing members of the Pension Bonus Scheme will continue to accrue entitlements under the Pension Bonus Scheme.
From 1 July 2009, Family Tax Benefit Part A payments will be indexed by the CPI.
The government has placed a freeze on the higher income thresholds of Family Tax Benefit B and Dependency Tax offset at $150,000. This freeze will remain in place until July 2012.
First Home Owners Boost (FHOB)
The First Home Owners Boost (FHOB) will be extended to contracts entered into on or before 30 September 2009.
From 1 October 2009 the FHOB will be reduced to $3,500 for existing homes and $7,000 for new homes.
The FHOB will cease on 31 December 2009. After this date, eligible individuals will only be able to receive the $7,000 first home owners grant.
| Contract Entered Into | First Home Owners Grant | FHOB Established Home | FHOB New Home |
| Prior to 30/09/2009 |
$7,000 | $7,000 | $14,000 |
| 30/09/2009 - 31/12/2009 |
$7,000 | $3,500 | $7,000 |
| Post 01/01/2010 |
$7,000 | Nil | Nil |
The Education Tax Refund (ETR) aims to help families with children attending primary and secondary school studies meet the cost of school education through assistance with certain education expenses.
Eligible families can claim the following amounts:
- A 50% refundable tax offest every year for up to $750 of eligible expends for each child undertaking primary school ($375 per child per year).
- A 50% refundable tax offest every year for up to $1,500 of eligible expends for each child undertaking secondary school ($750 per child per year).
Investment Allowance
The Federal Governments proposed Investment Allowance for Small and General Business has received royal assent and is now law.
This allowance provides tax breaks for businesses in two key categories:
Small business entities turnover of less than $2 million a year
- A bonus tax deduction of 50% of the cost of eligible new tangible depreciating assets where the business commits to investing in the asset between 13 December 2008 and 31 December 2009Other business entities turnover of $2 million or more a year
- A bonus tax deduction of 30% of the cost of eligible new tangible depreciating assets worth $10,000 or more that are purchased between 13 December 2008 and 30 June 2009.
- A bonus tax deduction of 10% of the cost of eligible new tangible depreciating assets worth $10,000 or more that are purchased between 1 July 2009 and 31 December 2009.
Division 7A
From 1 July 2009 the private company loan rules contained in Division 7A will be amended to include payment made by way of licence or right to use real property and chattels.
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