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50% Savings Discount for Interest Income

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This includes interest earned on deposits held with any bank, building society or credit union as well as on bonds, debentures or annuity products.

The discount will be available for interest income earned directly as well as indirectly, such as via a trust or a managed investment scheme (MIS).

Adjusted taxable income

The Government states that taxpayers claiming the discount for interest income will have a reduced adjusted taxable income for the purpose of determining eligibility for transfer payments and other concessions.

This may result in some individuals and families becoming eligible for transfer payments or for a larger transfer payment.

The Government notes that the consequential expense primarily affects Family Tax Benefit, but will also affect other payments such as:

  • the Baby Bonus;
  • Child Care Benefit;
  • the Education Tax Refund;
  • the Commonwealth Seniors Health Card (CSHC); and
  • the Pensioner Supplement (which is linked to eligibility for the CSHC).

The measure will apply from 1 July 2011.

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