Federal Budget 2022 23 Overview - Personal Finances

What the budget means for individuals

Helping Australians with the cost of living via fuel excise cuts and tax offsets

The Budget is providing cost of living relief through a temporary reduction in fuel excise and a tax offset for low and middle income earners.

Temporary Reduction in Fuel Excise

The excise duty for fuel and petrol will be reduced by 50% for 6 months, with consumers expected to save approximately 22 cents per litre. The measure will take effect from 12.01am on 30 March 2022, however consumers will only see the effects in a few weeks as fuel stocks are turned over. To ensure the savings are passed on to consumers, the competition watchdog will be monitoring retailers. 

Importantly, at the end of the six months at 11:59pm on 28 September 2022, the excise duty will revert to the previous rates and include indexation that would have occurred during the previous 6-month period.

Cost of Living Tax Offset increased

The Budget will increase the existing low and middle income tax offset (LMITO) by $420. Accordingly, the maximum benefit has increased for the 2021-22 income year to $1,500 for individuals and $3,000 for couples. 

From 1 July 2021, the Medicare low-income thresholds for seniors, pensioners, families and singles will increase.

For each dependent or child, the family income thresholds above increase by $3,619 (up from $3,597).

Extension of the 50 per cent reduction to the superannuation minimum payment requirements

The Federal Government announced the extension of the current 50 per cent reduction in the minimum superannuation drawdown requirements for account-based pensions (ABPs) and similar products. This measure was put in place in March 2020 and has now been extended to 30^th June 2023.

This concession was put in place to support self-funded retirees’ due to the significant losses in financial markets as a result of the COVID-19 crisis negatively impacting the account balance of the superannuation pension or annuity. investments by ensuring they do not have to sell investment assets to fund the otherwise higher minimum drawdown requirements.

Based on this extension, the (effective) reduced minimum percentage factors for ABPs (including TRISs), which are used to calculate the minimum annual pension amount under Superannuation Industry (Supervision) Regulations, are set out in the following table for the 2023 income year. 

Note that, for ABPs and TRISs that commence or cease part-way through the 2023 income year, a pro-rated minimum pension payment applies (unless the pension commenced on or after 1 June 2023, in which case, no minimum pension payment is required).

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Personal Finances

• Cost of living relief: fuel excise cut and tax offset  
• Increasing the Medicare low-income thresholds
• Extension of the 50 per cent reduction to the superannuation minimum payment requirements

Business Finances

• COVID-19 tax concessions
• Boost to small businesses
• Expanded Patent Box Scheme
• Australia-UK Free Trade Agreement
• Tax audits and reviews
• Expanded Employee Share Schemes

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Disclaimer: This newsletter contains general information only. No responsibility can be accepted for errors, omissions or possible misleading statements. No responsibility can be accepted for any action taken as a result of any information contained in these articles. It is not designed to be a substitute for professional advice and does not take into account your personal circumstances.