The 2015 federal budget for families made changes for individual taxpayers and families with its focus on improving the economy. Find out what they were.
Car expense deductions
The Budget has introduced new modernised methods for calculating work-related car expense deductions from the 2015/16 income year. The ’12 per cent of original value method’ and the ‘one-third of actual expenses method,’ which are used by less than 2 per cent of those who claim work- related car expenses will be removed.
The ‘cents per kilometre method’ will be modernised, allowing workers to claim a deduction for each kilometre driven in the car for work based on a schedule of typical costs. Under the new regime, one rate will be set at 66 cents per kilometre to apply for all motor vehicles. Taxpayers can continue using the ‘logbook’ method of calculating expenses if they do not want to use the cents-per-kilometre approach. These changes will adjust car expense deductions to align with the average cost of running a car.
The plan to index the pension to the Consumer Price Index has been axed. Instead, the Budget will be making the savings from people with substantial private assets.
A flexible wage subsidy will give older Australians approaching retirement an incentive to remain in the workforce with the possibility of receiving a bonus later. It will also shorten the length of time Australians over the age of 50 have to wait on income support or the pension before they qualify for job incentives.
Amendments to the new Restart program will offer older workers incentives for training to further assist them with retraining for a job and prevent them from falling back on unemployment benefits or pensions.
In addition, employers who hire job seekers under the age of 30 or workers aged 50 or older will share in a redesigned national wage subsidy pool from 1 November 2015.
Eligible employers will be granted a subsidy of up to $6,500 for hiring a job seeker under the age of 30, an indigenous job seeker, a parent returning to the workforce, or a long- term unemployed job seeker. They can also receive up to $10,000 under the Restart program for hiring workers aged 50 or older.
The childcare scheme has received a major overhaul to support low income families. Families with access to maternity leave through work will no longer receive government assistance in the form of the existing Parental Leave Pay (PLP) scheme from 1 July 2016. This measure will prevent families from double dipping into both schemes.
Under the new proposals, both parents must do at least eight hours a fortnight of work, training or study to qualify for any childcare support. Families earning up to $65,000 will receive 85 per cent off childcare fees, while stay-at-home parents with a family income over $65,000 will no longer secure childcare subsidies.
A two-year nanny trial starting on 1 January 2016 will assist the parents of approximately 10,000 children, especially those working for emergency services or living in regional areas, without access to regular childcare services.
Farmers can continue the Drought Concessional Loan Scheme for another year. Farmers will also be able to claim fences and new water storage as tax write-offs.
If you’re a business owner and would like to learn more about leveraging the current federal budget for families, contact Taggart & Partners small business advisors today.