The Budget 2016: How it affects you

Luka Group has cut through the Budget lingo and political spin to summarise the main items and how they might affect everyday Australians.

It is important to note, any changes proposed in the Budget are not law until they pass through Parliament. Over the past few years, getting changes approved by Parliament has proved difficult. With an election looming, the proposals are unlikely to even make it to Parliament for 3 months or more.

Please do not hesitate to contact Luka Group on 02 6883 2200 to discuss any points that affect you.

Key Superannuation Changes

The 2016 Budget has included the most significant changes to superannuation since 2007.  Importantly, all but one of these measures come into force from 1 July 2017, meaning you have over 12 months to make any required adjustments to your strategies.

Lifetime cap for non-concessional superannuation contributions
Reduction in threshold for additional 15% tax for high income earners
Introduction of $1.6 million transfer balance cap
Earnings on Transition to Retirement Pensions subject to tax
Removing the work test for those aged 65 to 74
Concessional cap and contribution rule changes
Restrictions eased on tax deductions for personal contributions
Low Income Superannuation Tax Offset (LISTO)
Low income spouse tax offset increased
Anti-detriment provision in respect of death benefits abolished
Changes to retirement income products

Key Taxation Changes

Personal income tax relief
Increase in the Medicare Levy low income thresholds
Pausing indexation of the Medicare Levy Surcharge and Private Health Insurance Rebate thresholds
GST on low value goods imported by consumers
Reducing the company tax rate to 25%
Increased small business turnover threshold
Increased unincorporated small business tax discount
Rumoured tax changes not announced

Key social security changes

Eligibility for the Disability Support Pension (DSP)
Changes to the Age Pension Assets Test