2018 Federal Budget Analysis
Scott Morrison’s third budget is headlined by $140 billion in tax cuts
over the next decade, immediate tax relief of up to $1,060 a year for middle-income households and a fundamental reform of the tax system.
Summary of Budget measures
Note: These changes are proposals only and may or may not be made law.
From 1 July 2018
• Low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
• The Medicare Levy will remain at 2%.
• The $20,000 instant asset write-off for business with aggregate turnover less than $10m will be extended
until 30 June 2019.
• Funding for home care services and residential aged care will increase.
From 1 July 2019
• A one year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
• Life insurance can only be offered in super on an ‘opt-in basis’ to new members under 25 years of age or members with inactive accounts or an account balance under $6,000.
• Fees when exiting a super fund will be banned and administration/investment fees will be capped at 3% pa on accounts with balances of less than $6,000.
• The ATO will work to proactively reunite Australians’ dormant superannuation funds with their active account, with inactive balances less than $6,000 to be transferred to the ATO.
• The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
Opportunities post 1 July 2018
There are some key opportunities announced in previous Federal Budgets that are already legislated to take effect on
1 July 2018. These include:
• People aged 65 or over can make ‘downsizer’ super contributions of up to $300,000 from the proceeds of selling
their home.
• First home buyers who have made super contributions under the First Home Super Saver Scheme can access their
money for eligible property purchases.
• Where the annual concessional contribution cap is not fully utilised, it may be possible to accrue unused amounts
or use in subsequent financial years.
Contact Proxima on 08 8332 4700 to discuss the impact the Federal Budget may have on you.
