HOW THE 2022 BUDGET EFFECTS YOU

1. $250 cost of living payment


The $250 cost of living payment is due to be paid some time in April. Currently there is no guidance on when these payments will be made or how they will be made. These tax free payments are a one off payment to eligible individuals who receive one or more of the following payments:

  • Jobseeker Payment

  • Parenting Payment

  • Youth Allowance

  • Carer Payment or Carer Allowance

  • Austudy and Abstudy Living Allowance

  • Disability Support Pension

  • Age Pension

  • Pension Concession Card (PCC) Holders

  • Commonwealth Senior's Health Card Holders

  • Eligible Veteran's Affairs payment recipient and Veteran Gold Card Holder

  • Special Benefit

  • Double Orphan Benefit

  • Farm House Allowance


2. $420 cost of living offset increase


This tax offset will be applied when individuals complete their tax return. It is for taxpayers who have a taxable income between $37,000 and $126,000. This offset reduces an individuals tax that would normally be paid on their taxable income by $450. It is not an extra $450 refund but a reduction (offset) in tax payable.


This additional offset will increase the current offset available to $1500. Those whose taxable incomes fall between $48,000-$90,000 will receive the full $1500 offset and it scales down to $420 for those earning up to $126,000.


3. Apprenticeship Incentive System


This new incentive scheme will replace this existing one and will take effect from 1 July 2022. It is applicable for occupations on the list on this link.


It offers up 20% in wage subsidies to employers payable over two years as well as individuals receiving ‘Apprentice Training Support Payments’ from the government every 6 months for 2 years.


4. Fuel excise reduction


Fuel excise is an Australian Government tax charged per litre on petrol purchased at the bowser. The current rate is 44.2 centres per litre. After the recent budget announcement the excise has been halved to 22.1 cents per litre for 6 months and is in effect as of now. This should see some cash savings at the pump.


5. Deduction Boosts


Small Businesses who earn a revenue less than $50 million per year will be eligible for the below proposed deduction boosts. These boosts allow for a 120% deduction on eligible expenditure. Put simply if a business spends $100 on an external training course for example, they will be entitled to a $120 tax deduction therefore saving on tax paid.

Small Business Technology Investment Boost

This will be capped at $100,000 annually and will expire on 30/6/2023


Small Business Skills and Training Boost

Small businesses who earn a revenue less than $50 million per year will be able to claim an additional 20% of expenditure on eligible training courses that are provided to employees. No cap has been specified as yet and eligible providers are not yet listed. This will expire on 30/6/2024


6. Paid Parental leave


Some changes have come in for paid parental leave. The number of weeks has increased from 18 weeks to 20 weeks and can be shared by both parents who are working. Initially primary carers who earned over $151,350 would not be entitled to this. New rules will allow the threshold to be determined as a household (ie both working parents) up to $350,000


Contact Tier Accounting to see where we can help.


 

Tier Accounting is a Chartered Accounting firm servicing Bayside, Mornington Peninsula and greater Melbourne across accounting, bookkeeping, business partnering, cloud set up and support and marketing.