2022-2023 Budget Summary

2022-23 Budget Summary

Individuals

Once-off Increase to LMITO (Low and Middle Income Tax Offset) by $420

The maximum LMITO benefit will increase from $1,080 to $1,500 for individuals and $3,000 for couples from 1 July 2022 when Australians submit their 2022 tax returns.  

Individuals with taxable income above $126,000 threshold will not entitle to the offset.

Tax Deductibility of COVID-19 Test Expenses

Cost of taking a COVID-19 test to attend a place of work are tax deductible from 1 July 2021.

This cost will not attract FBT if it was incurred by businesses where COVID-19 tests were provided to employees for this purpose.

Increasing the Medicare Levy Low-Income Thresholds

The above thresholds for families and single, seniors and pensioners will be increase from 1 July 2021 as below:-

Category Current From 1 July 2021

Single $23,226 $23,365

Family $39,167 $39,402

Single Senior & Pensioner $36,705 $36,925

Family Threshold for

Senior & Pensioner $51,094 $51,401

Note : The family income thresholds will increase by a further $3,619 for each dependent child or student instead of the previous amount of $3,597.

Cost of Living Payment

A one-off $250 payment will be made in April 2022 to eligible recipients and concession cardholders.

Temporary Reduction in Fuel Excise

Australians will save 22 cents a litre every time when they fill up their car with temporary halving in the fuel excise for the next 6 month till 28 September 2022. This cut will flow through to the consumers over the next 2 weeks, under the monitor of the competition regulator, to ensure the full benefit is passed on to the consumers.

Businesses

Deduction Boosts for Small Business – Skills and Training

Eligible small businesses with an aggregated turnover of less than $50 million will be able to deduct an additional 20% of expenditure incurred on external training courses provided to employees by registered training organisations in Australia (including online delivery courses) from 7:30pm (AEDT) on 29 March 2022 until 30 June 2024. 

The boost for eligible expenditure incurred by 30 June 2022 will be claimed in 2023 tax returns. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2024 will be included in the income year in which the expenditure is incurred.

Deduction Boosts for Technology Investment

This boost will allow small businesses with aggregated annual turnover of less than $50 million to deduct an additional 20% of the costs of business expenses and depreciating assets that support its digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services) incurred from 7:30pm (AEDT) on 29 March 2022 until 30 June 2023 with an annual cap of $100,000.

The boost for eligible expenditure incurred by 30 June 2022 will be claimed in 2023 tax returns. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be included in the income year in which the expenditure is incurred.

PAYG and GST Instalment Uplift Factor – 2% for 2022-2023

The Government has decided to apply 2% uplift factor for PAYG & GST Instalment for 2023 income year instead of 10% under the statutory formula.

The lower uplift rate will result in more cash flow to business initially, but possibly higher catch-up tax payment at the end of the financial year.

The 2% uplift factor will apply to small businesses with up to $10 million annual aggregate turnover for GST Instalments and $50 million annual aggregated turnover for PAYG Instalments.

PAYG Instalments : Option to Base on Financial Performance

Companies will be allowed to calculate their PAYG Instalments based on current financial performance, extracted from business accounting software (with some tax adjustments).

Digitalising Trust Income Report

The Government confirms it will digitise trust and beneficiary income reporting to ensure all trusts will have the option to lodge income tax returns electronically.

This measure is proposed to commence form 1 July 2024.

Superannuation

Extending 50% Reduction for Account-Based Pensions Minimum Drawdown

The temporary 50% reduction in minimum annual payment amounts for superannuation pensions will be extended by a further year to 30 June 2023.

Updated 30.03.2022