PERSONAL TAXATION
2015 tax-free threshold increase "deferred", otherwise no changes
The Treasurer confirmed that the previously planned increase in the tax-free threshold from $18,200 to $19,400 from 1 July 2015 will not proceed. Instead, it will be "deferred".
Personal tax rates have otherwise remained unchanged. This means that for the 2012–2013, 2013–2014 and 2014–2015 years, the taxable income ranges and tax payable for resident individuals (excluding the Medicare levy, which is discussed below) are as follows:
| Taxable Income $ | Tax Payable $ |
| 0 - 18,200 | Nil |
| 18,201 - 37,000 | Nil + 19% of excess over 18,200 |
| 37,001 - 80,000 | 3,572 + 32.5% of excess over 37,000 |
| 80,001 - 180,000 | 17,547 + 37% of excess over 80,000 |
| 180,000 + | 54,547 + 45% of excess over $180,000 |
Medicare levy to increase to 2%
The Treasurer confirmed that the Medicare levy will increase by 0.5% to 2%, with effect from 1 July 2014. This means that the effective top marginal tax rate will become 47% from that date.
Of course, not everyone pays the Medicare levy, so the increase will not affect all taxpayers.
Medicare levy low-income threshold for families increased
The Treasurer announced that the Medicare levy low-income threshold for families will increase to $33,693 for the 2012–2013 income year, with effect from 1 July 2012. The additional amount of threshold for each dependent child or student will also increase to $3,094.
Phase-out of medical expenses tax offset
The Government will phase out the net medical expenses tax offset, with transitional arrangements for those currently claiming the offset. However, the offset will continue to be available for out-of-pocket medical expenses relating to disability aids, attendant care or aged care until 1 July 2019.
The transitional measures are as follows:
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From 1 July 2013, those taxpayers who claimed the offset in 2012–2013 will continue to be eligible in 2013–2014 if they have eligible out-of-pocket medical expenses above the relevant thresholds.
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In addition, those who claim the offset in 2013–2014 will be eligible to claim it in 2014–2015.
