On Tuesday 29 March 2022, the Australian government handed down its Federal Budget for 2022-23. It’s important that you take the time to understand what the Budget proposals mean – and how they might affect you personally.

The announcements were largely focused on easing the cost of living to support low and middle income earners, social security recipients and those looking to buy a home, as well as stimulating business growth to continue Australia’s economic recovery.

Please read below summary of the Budget announcement and what it may mean for you:

• Super Changes: The 50% reduction to the minimum drawdown rate for pension accounts has been extended until 30 June 2023. The rate was reduced part way through the 2019-20 financial year as a response to market volatility during the pandemic. The government stated that even though Australia has entered a period of economic recovery, there is still significant volatility in financial markets due to the ongoing impacts of Coronavirus and the war in Ukraine.
• Tax Changes: There will be a one-off tax offset of $420 for low- and middle-income earners (LMITO) to help ease the cost of living. This will be combined with the current tax offset for the 2021-22 financial year.
• Social Security Changes: The government will provide a one-off $250 cost of living payment in April 2022 to eligible recipients of social security payments and concession cards. This includes pensioners, carers, students, veterans and people with a disability. In addition, the government has increased from 18 to 20 weeks leave under the Dad and Partner Pay Scheme that can be shared between parents in whatever type of arrangement works best for them. The income test that determines eligibility for paid parental leave will also be broadened to a household income threshold of $350,000 a year (rather than an individual threshold).
• Social Security Changes: The government has announced that from 20 March 2022 it will reduce the fuel excise that applies to petrol and diesel by 50% for six months to help reduce fuel prices. This mean the fuel excise will drop by 22.1 cents a litre for six months.

It is always important to remember that at this point, the Budget night announcements are only statements of intended change and are not yet law.

Below is an overview of some of the measures announced in this year’s Federal Budget. There may be others that impact on your personal situation.  A financial adviser can help outline what these measures may mean for you, and the opportunities available now, or in the future.

If you have any questions or know anyone who would benefit from a discussion with Patricia, please get in touch to schedule a suitable time.

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