Walker Wayland - Perth Accountants

Mar 2022 2 Minutes

Personal Tax Measures

Article part of 2022-23 Federal Budget update

Increased Tax Offset

The low and middle income tax offset will be increased by $420 for the 2022 financial year.  The benefit of this will be paid when Australians lodge their 2022 tax returns, increasing the offset from a maximum of $1,080 to $1,500 for those earning from $48,000 to $90,000 but phasing out up to $126,000.

Individuals earning up to $48,000 will also get an additional $420 tax offset increasing their tax offset to $675.


Cost of living payment

The Government will provide a once off $250 payment to eligible recipients in April.  Eligible recipients include those who receive:

  • the age pension
  • Disability support payments
  • Parenting payments
  • Jobseeker payments
  • Youth allowance payments
  • Commonwealth Seniors Health Care Card holders
  • Recipients of other government supports.

Importantly these payments are exempt from tax and do not count as income for the purposes of any other income support payment.


Temporary reduction in Fuel Excise

This budget will temporarily reduce the excise that applies to petrol and diesel for 6 months by 50%. This measure will apply from 30 March 2022 and remain in place until 28 September 2022. This reduction will drop the excise amount from the current rate of 44.2 cents to 22.1 cents.

This measure will be heavily welcomed by motorists, especially those who spend a lot of time on the road however will place a lot of pressure on this government, or other future governments to allow for the measure to lapse. The government will be hoping that fuel prices drop between now and 29 September or they will face pressure to extend the measure.


Personal Tax Changes

Although not specifically referred to in the Budget, importantly the Stage 3 tax rate and threshold changes previously legislated to apply from 1 July 2024 have not been wound back, as was speculated.

As a reminder these changes are as follows:

Tax rates and income thresholds

Indexation of the Medicare Levy thresholds

The Medicare Levy low-income thresholds are indexed each year. From 1 July 2021, the thresholds are expected to be as follows:

  • For singles $23,365 (increased from $23,226)
  • For families $39,402 (increased from $39,167) plus $3,619 per dependent (increased from $3,597)
  • For single seniors and pensioners $36,925 (increased from $36,705)
  • For family seniors and pensioners $51,401 (increased from $51,094) plus $3,619 per dependent (increased from $3,597)