Latest from the ATO re Personal Tax Changes

Personal tax changes from 1st July 2014


Temporary Budget Repair Levy


A 3-year temporary levy on individuals with taxable incomes in excess of $180,000 per annum (and, therefore paying tax at the top marginal rate – currently, 47%, including the Medicare Levy), will be introduced on 1 July 2014.

From 1 July 2014 until 30 June 2017, the Temporary Budget Repair Levy will apply at a rate of 2% on an individual’s taxable income in excess of $180,000 per annum.


Example of what this means for Individuals:

Taxable income of $180,000 or below                 NO LEVY PAYABLE

Taxable income of $200,000                              Pay 2% of $  20,000   i.e. $   400 levy

Taxable income of $300,000                              Pay 2% of $120,000  i.e. $2,400 levy


Tax rates 2014- 2015

The following rates for 2014-15 apply from 1 July 2014.

  Taxable income   Tax on this income
  0 – $18,200   Nil
  $18,201 – $37,000   19c for each $1 over $18,200
  $37,001 – $80,000   $3,572 plus 32.5c for each $1 over $37,000
  $80,001 – $180,000   $17,547 plus 37c for each $1 over $80,000
  $180,001 and over   $54,547 plus 45c for each $1 over $180,000 plus further 2c levy


Net Medical expenses tax offset being phased out

There is a gradual phasing out the net medical expenses tax offset.  Only those taxpayers who claimed the medical tax expenses offset in 2012/13 and again in the 2013/14 year can continue to be eligible for this rebate in 2014/15 (pending having net expenses above the relevant thresholds).  The offset will continue to be available for out-of-pocket medical expenses relating to disability aids, attendant or aged care until 1 July 2019. 


Low income tax offset changes

From 1 July 2012, the low income tax offset (LITO) threshold will increase from $30,000 to $37,000, with individuals entitled to receive the offset if their taxable income is below $66,667. The maximum value of $445 will begin to be phased out at the reduced rate of 1.5 cents for every dollar of taxable income over $37,000.

From 2015-16, individuals will be entitled to receive the LITO if their taxable income exceeds $37,000 but does not exceed $67,000. The maximum value of the LITO will be reduced to $300 and will begin to be phased out at the rate of 1 cent for every dollar of taxable income over $37,000.


Low income tax offset: summary table

  2011-12   2012-13   2015-16
Amount   $1,500   $445   $300
LITO begins to be reduced at   $30,000   $37,000   $37,000
You are no longer eligible for LITO at   $67,000   $66,667   $67,000
Withdrawal rate   4%   1.5%   1.0%


Abolition of the following Tax Offsets as from 1st July 2014: 

  1. a.   Dependent Spouse Tax Offset (DSTO)

Phase out of the eligibility to claim DSTO commenced in 2012. With the exception of taxpayers who are entitled to claim the Zone Tax Offset, the Overseas Forces Tax Offset and the Overseas Civilians Tax Offset, from 1 July 2014 there will no longer be an available claim for taxpayers, irrespective of the spouse’s age.

  1. b.   Mature Age Tax Offset (MAWTO)

Phase out of eligibility commenced in the 2013 income year by limiting it to taxpayers born before 1 July 1957. From 1 July 2014 there will no longer be an available offset for any taxpayers irrespective of age. In place the government is establishing a Restart Program to encourage employers to hire mature aged workers. The employer will receive the incentive payment of up to $10,000 to be paid over a 24 month period.

  1. c.   First Home Saver Accounts Scheme

New accounts opened after 13 May 2014 will not be eligible to any co-contributions, Tax or Social Security concessions. For existing account holders the co-contribution will cease from 1 July 2014 and tax concessions and income and asset test exemptions for government benefits will cease from 1 July 2015.

As of 1 July 2015 account holders will be able to withdraw their account balances without restriction and these accounts will be treated like any other account.

Pensioner and senior Australians tax offsets

From 1 July 2012, the pensioner tax offset (PTO) will no longer be available. Individuals previously eligible for the PTO will be eligible for the senior Australians tax offset (SATO). To reflect this merger, SATO will be known under the new name of senior and pensioner tax offset (SAPTO)

Superannuation Guarantee Rate Increase

The Superannuation Guarantee rate will increase from 9.25% to 9.5% from 1 July 2014. The Superannuation Guarantee rate will remain at 9.5% until 30 June 2018 and then be increased by 0.5% each year until it reaches 12% in 2022/2023.

Medicare levy low-income threshold and Medicare levy surcharge

From 1 July 2014, the medicare levy has been increased from 1.5% to 2%.


source; taken from the ATO website

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Sara Harrington

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