2019 – 2020 Federal Budget

The Australian Government Budget was handed down last night. Set out below is a summary of some of the Key Proposed Measures announced by the Morrison Government pertaining to Superannuation, Investment, Taxation, Social Security and Aged Care.

Please note, the Budget measures will need to pass through Parliament before taking effect. The Morrison Government has stated its intention to hold back the passage of some of the Budget Measures until after the election, so whether all the Budget Measures come into effect may be contingent on the forthcoming Federal election.

In this last quarter of the financial year, it is a good time to review your financial position to ensure that you are on track to meet your lifestyle objectives. Make an Appointment with your investment adviser to review your circumstances and how the changes announced in the Budget could impact your financial position and planning strategy going forward.

Reduction in Personal Taxation Rates

Tax Offset Increase for Low- and Middle-Income Earners from 1 July 2018

  • There has been a proposed increase to the amount of LMITO available, and the availability of the offset has been extended to additional Australians who previously weren’t eligible.

* Courtesy MLC Budget briefing presentation

* Courtesy MLC Budget briefing presentation


Personal Tax Rate Changes from 1 July 2018

  • From 1 July 2024, 32.5% tax bracket will be reduced to 30%

  • Estimated that by 24/25 financial year, 94% of Australian’s will pay tax at 30% or less

* Courtesy MLC Budget briefing presentation

* Courtesy MLC Budget briefing presentation


Increase to Medicare Levy Threshold

  • To Apply for the 2018 – 2019 year

Table 3.png

Tax Assistance for Small and Medium Business (SME)

Extension of Instant Tax Write -Off

Currently, small businesses with an annual turnover of $10 million or less can claim an immediate deduction for eligible assets costing less than $20,000 each. It was previously announced earlier in the year that the Government intended to increase this threshold further to $25,000. From Budget night, the threshold is proposed to increase further to $30,000.

In addition, this deduction will now be available to medium sized businesses, with annual aggregated turnover of <$50m. This measure will be extended for a further 12 months, until 30 June 2020.

  • Immediate Deduction of Eligible Purchases

  • Increased Threshold to $30,000 per asset

  • Extended to Businesses with annual turnover below $50M


Personal Superannuation Contributions

There will be more opportunities to make personal Superannuation Contributions, with an increase to the Age from which the work test needs to apply for Personal Superannuation Contribution Eligibility, as well as the spouse contribution eligibility legislation currently in place.

From 1 July 2020, the ability to make additional lump sum Personal Contributions to superannuation the age extends from 65 – 67.

  • Aligns to the increasing Age Pension age

  • Applies to both Personal NON-CONCESSIONAL and Personal CONCESSIONAL contributions

Work test will now only apply after age 67+.

  • Must meet the work test to contribute after this age

  • 40 hours in a consecutive 30-day period

Spouse contributions to Superannuation

Legislation to increase the age limit for Spouse contribution from age 69 – 74 to apply from 1 July 2020

  • Will allow the working spouse to make contributions for a dependent spouse that is currently limited to age 69

Other Superannuation Administration and Small Balance Measures

  • Improved streamlining for the administration of Exempt Current Pension Income (ECPI) when Superannuation Funds have Accumulation and Pension Account members

    • to apply from 1 July 2020

    • SMSF trustee only affected if the Proportion Method is being used. The Government will remove the requirement for an Actuarial Certificate

  • The Government intends to delay the start of the Opt-In for Insurance within Superannuation Accounts for members with balances less than $6,000 and under age 25

    • To apply from 1 October 2019

Social Security

Energy Assistance Payment from June 2019 is to be an additional $75 per single person and $125 per couple. To be eligible, the recipient must be in receipt of:

  • Age Pension

  • Disability Support Payment

  • Carer Payment

  • Parenting Payment (Single)

  • Certain Dept. Vet Affairs Payments

Administration Changes for those working and in receipt of Social Security Payments:

  • Called Single Touch payroll, this will be new reporting requirements for income when in receipt of an income support payment

  • Reduce the likelihood of Overpayments in the Social Security System

Aged Care

To Apply from 1 July 2018:

  • Increased Funding Packages for Home Care and Residential Care Placement

  • Increased Audit and Monitoring to improve Quality and Safety of Care


DJ Carmichael Pty Limited advises this document contains general financial advice only. In preparing this document, DJ Carmichael Pty Limited did not take into account the investment objectives, financial situation and particular needs (‘financial circumstances’) of any particular person. Accordingly, before acting on any advice contained in this document, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your DJ Carmichael Pty Limited adviser. DJ Carmichael Pty Limited, its Directors, employees and advisers may hold securities, may have an interest in or may earn brokerage or commission from any transactions undertaken on your behalf as a result of acting upon this information.

The information contained herein relies on information obtained from third parties. While DJ Carmichael Pty Limited believes that the information herein is accurate, no warranty of accuracy or reliability is given in relation to any advice or information contained in this document and no responsibility for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence), is given by DJ Carmichael Pty Limited or any officer, agent or employee of DJ Carmichael Pty Limited. This document is intended only for the use of the individual or entity to whom it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient or employee or agent responsible for delivering the document to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication and its attachments is strictly prohibited. To elect not to receive any further direct marketing communications from us, please reply to this email and type 'opt out ' in the subject line. Please allow five business days for the request to be processed.