2014 Federal Budget summary

In one of the more highly anticipated Federal Budgets, the Government announced major changes that could impact the financial plans of some of your clients. The key initiatives in this year's Federal Budget include:

• A Temporary Budget Repair Levy of 2% will be payable on taxable incomes over $180,000 pa for the next three financial years.

• The levy will increase the Fringe Benefits Tax rate to 49% for three years, starting on 1 April 2015.

• Changes to HELP debts will increase the amount payable and payments will be made at lower income levels.

• The income thresholds determining the Private Health Insurance Rebate and Medicare Levy Surcharge will not be indexed for three years, starting on 1 July 2015.

• The Dependent Spouse and Mature Age Worker Tax Offsets will be abolished from 1 July 2014.

• People who make non-concessional super contributions from 1 July 2013 that exceed the cap will have the option to withdraw the excess amount plus earnings on the excess.

• The timeframe for increasing the Superannuation Guarantee contribution rate to 12% will be amended.

• The Age Pension age will gradually increase to 70.

• The deeming thresholds will reduce from 20 September 2017.

• A range of changes to Family Tax Benefit – Part A and B will reduce the number of people who are eligible and, for some, lower the entitlements.

• The Commonwealth Seniors Health Care Card thresholds will be indexed from 20 September 2014.

• The definition of income for the Commonwealth Seniors Health Care Card will be expanded. From 1 January 2015, an amount will be included in the income test, based on an account-based pension being subject to deeming.