Personal Tax Cuts for Middle Income Earners
The 32.5% personal income tax threshold will increase from $80,000 to $87,000 from 1 July 2016. The new tax rates from 1 July 2016 would be as follows:
|Taxable income||Tax rate from 1 July 2016|
|$0 – $18,200||0%|
|$18,201 – $37,000||19%|
|$37,001 – $87,000||32.5%|
|$87,001 – $180,000||37%|
|$180,001 and over||45%|
These tax rates exclude the Medicare Levy and the 2% debt tax on high-income earners over $180,000 which will come to an end on 30 June 2017
Increase in the Medicare Low-Income Threshold
The Medicare low-income threshold for singles, families and seniors and pensioners will increase.
|2015-16 income year threshold|
|Couples (no children)||$36,001|
|Additional amount of threshold for each dependent child or student||$3,306
|Single seniors and pensioners||$33,738|
|Senior and pensioner couples with no children||$46,966|
Pause on Indexation of Medicare Levy Surcharge and Private Health Insurance Rebate Thresholds extended.
The current pause in indexation of the income thresholds for the Medicare Levy Surcharge and Private Health Insurance Rebate will be extended for a further three years. The continued pause from 1 July 2018 is expected to achieve efficiencies of $744.2 million over three years.
Child care reforms on hold
The Government has deferred the implementation of the Child Care Subsidy, Additional Child Care Subsidy and Community Child Care Fund by one year to 1 July 2018 due to the Family Tax Benefit reforms required to fund the child care package not being passed by the Senate.
The Interim Home Based Carer Subsidy Pilot Programme (Nanny Pilot Programme), that started on 1 January 2016 and subsidises care provided by a nanny in a child’s home, will be extended for six months to 30 June 2018. The hourly fee cap will be increased from $7 to $10 from 1 June 2016.