It’s no surprise that in the midst of a global pandemic, that this year’s Federal budget is very different to any other Liberal Budget. During a time that’s been labelled as the ‘worst global economic downturn since the great depression’, a stimulatory budget was widely predicted. For now, restoring the budget deficit will go on the backburner as the focus goes to driving growth and reducing unemployment.
Let’s take a look at some of the proposals that might impact you and your family.
- Repealing the Work Test – Australians aged 67 to 74 will no longer have to satisfy a work test to salary sacrifice or make non-concessional contributions to super. This is a great opportunity to put more money in super while you can.
- Age for Downsizer contributions reduced from 65 to 60 – This will allow an after tax contribution of up to $300,000 per person should they sell their family home.
- Access to lump sums under the Pension Loan Scheme (PLS) – The PLS is a type of reverse mortgage that allows pensioner to receive fortnightly payments against the value of their home. The new lump sum option will allow two lump sum payments (per year) of up to 50% of the annual aged pension to be paid.
- Removal of minimum income threshold for Super Guarantee – The current $450 monthly income threshold will be reprised to boost super balances.
- Extension of Tax Offset – Up to $1,080 in tax offsets will be extended for an additional 12 months for low and middle income earners to include the 2021/22 financial year.
- Temporary Full Expensing – The temporary expensing incentive announced last year will be extended to allow businesses with less than $5 billion turnover to deduct the full cost of an eligible asset (or improvement) for another year until June 2023.
- First Home Super Saver Scheme – The current scheme which allows first home buyers to save for their home inside of their super, will increase the maximum voluntary contributions that can be released from $30,000 to $50,000.
- Family home Guarantee for Single Parents – Up to 10,000 single parents will be able be buy a new home with as little as 2% deposit (with no mortgage insurance), regardless of whether they have previously owned a home.
- New Home guarantee – A further 10,000 places will be offered for first home buyers seeking to build a new home or purchase a newly built home with as little as 5% deposit.
In response the Royal Commission there is an addition $17.7 billion going into this sector over the next five years. Many of the measures are focused on keeping people safely in their homes, providing funding for informal carers and over 800,000 additional Home Care packages. Within Aged care facilities, the proposals aim to improve transparency within the sector and raising the standard of care.
It’s important to remember that at this stage, all of these measures are just proposals and still need to be passed through parliament. But one thing is loud and clear, the Government is willing to spend up big to try and ward off an economic downturn.
If you have any questions, or unsure how the changes might impact you, please get in touch – the team at Apollo is always here to help.