2021/22 Budget Summary

2021-22 Budget Review

Summary of Major Budget Announcements 

No changes to the income tax rates for 2021/22, however the Government is retaining the low and middle income tax offset (LMITO) in 2021-22 worth up to $1,080 for individuals with taxable incomes up to $90,000. Between $90,000 and $126,000 the $1,080 offset reduces by 3 cents in the dollar until it reduces to nil at $126,000.

Temporary full expensing will now be available until 30 June 2023. Temporary full expensing allows eligible businesses with aggregated annual turnover or total income of up to $5 billion to deduct the full cost (no limit) of eligible depreciable assets. Assets must be acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.

Temporary loss carry-back will also be extended by one year. This will allow eligible companies to carry-back tax losses from the 2022-23 income year to offset previously taxed profits as far back as the 2018-19 income year. Companies with aggregated annual turnover of up to $5 billion can apply tax losses incurred during the 2019-20, 2020-21, 2021-22 and now the 2022-23 income years to offset tax paid in 2018-19 or later years. The tax refund will be available to companies when they lodge their 2020-21, 2021-22 and now 2022-23 tax returns.

From 1 July 2021, 10,000 guarantees will be made available over four years to eligible single parents with dependants to build a new home or purchase an existing home with a deposit of as little as two per cent, subject to an individual’s ability to service a loan, and the government will guarantee up to 18 per cent of the loan.

From 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making, or receiving, non-concessional superannuation contributions or salary sacrificed contributions. However, access to concessional personal deductible contributions for individuals aged 67 to 74 will still be subject to meeting the work test.

From 1 July 2022, the minimum age for the downsizer contribution will be lowered from 65 to 60. This will allow Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home.

From 1 July 2022, the Government will increase the maximum amount of voluntary contributions that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.

Part-time workers earning less than $450 a month from an employer will be eligible to receive superannuation on those wages. In a major shift for some employers, this means they will have to pay super for all of their employees, no matter how few hours they work. This will begin on 1st July 2022.

Families earning more than $189,390 will have the $10,560 annual subsidy cap for childcare removed, under changes set to come into effect in July 2022.

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