Several proposals regarding small and medium businesses, primary producers and farmers, consumers, aged care and education have recently been legislated. In this article, we unpack these for you.
Written and accurate as at: 14 Jan 2019
It has been relatively quiet in Federal Parliament concerning many of the proposed superannuation, investment and taxation measures that were released in the 2018 Federal Budget.
Despite this, over the last few months, several proposals regarding small and medium businesses, primary producers and farmers, consumers, aged care and education have moved through the Federal Parliamentary Process and become enshrined in law.
Small and medium businesses
Running a small to medium business can be a tough, but rewarding, experience. Allowing you to pursue your passions and give back to the community in your own way, whilst also providing financially for yourself and your family. In light of this, here are a few legislative changes that may help you to maintain, preserve and grow your business now and into the future:
Corporate tax rate. The corporate tax rate for base rate entities (i.e. derive no more than 80% of income in passive forms and have an aggregated turnover of less than $50 million) will be:
- 27.5% for the 2018-19 and 2019-20 financial years (unchanged timeframe);
- 26% for the 2020-21 financial year (timeframe brought forward); and,
- 25% for the 2021-22 financial year and later financial years (timeframe brought forward).
Small business income tax offset. The small business income tax offset for unincorporated small businesses (i.e. have an aggregated turnover of less than $5 million) will be:
- 8% for the 2018-19 and 2019-20 financial years (timeframe unchanged);
- 13% for the 2020-21 financial year (timeframe brought forward); and
- 16% for the 2021-22 financial year and later income years (timeframe brought forward).
Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Act 2018. Royal assent on the 25th of October 2018.
- Accelerated depreciated for small business. The period during which small business entities (i.e. have an aggregated turnover of less than $10 million) can access expanded accelerated depreciation rules (i.e. the $20,000 instant asset write-off) has been extended by 12 months to 30 June 2019.
Small business entity Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Act 2018. Royal assent on the 21st of September 2018.
Primary producers and farmers
In a similar vein to the above, and considering the recent and ongoing drought conditions, here are a few legislative changes relevant to primary producers and farmers:
- Deductibility for primary producers. Primary producers can deduct capital expenditure on fodder storage assets (e.g. silos, liquid feed supplement storage tanks, hay sheds, grain storage sheds, etc.) used to store grain and other animal feed (e.g. hay, silage, etc.) in the financial year in which the expenditure is incurred (rather than depreciate over three financial years). This applies to fodder storage assets first used or installed ready for use on or after 19 August 2018.
Treasury Laws Amendment (Supporting Australian Farmers) Act 2018. Royal assent on the 3rd of October 2018.
Farm household allowance.
- Farm Household Allowance is usually paid at the same rate as Newstart Allowance, however a more generous, two stage assets limit applies. The farm assets limit will temporarily increase from $2.6375 million to $5 million for the period 1 September 2018 to 30 June 2019. And, a new payment supplement of $7,200 for single farmers and $12,000 for farming couples, will be paid in September 2018 and again in March 2018, to qualifying Farm Household Allowance recipients.
- The extension of the Farm Household Allowance program from three cumulative years to four cumulative years for each recipient.
Farm Household Support Amendment (Temporary Measures) Act 2018 and Farm Household Support Amendment Act 2018. Royal assent on the 24th of August 2018 and 29th of June 2018, respectively.
With the festive season having come to a close, you have probably now taken stock of the presents that you received over this period. Importantly, a gift card may number among them. Recent estimates put gift card expiry losses at $70 million per annum. In light of this, here is a legislative change to help avoid the disappointment and financial loss that you may have experienced in the past when a gift card expired:
- Gift cards. Gift cards must have a minimum three-year expiry period, information about the expiry must be displayed prominently on the card, and certain post-supply fees are banned. This applies to gift cards supplied on or after 1 November 2019.
Treasury Laws Amendment (Gift Cards) Act 2018. Royal assent on the 25th of October 2018.
It’s often taken as a given that the aged care services received from a relevant aged care service provider will be both applicable to an individual’s needs and delivered in a professional manner. In light of this, if you do have a concern or complaint regarding the aged care services that either you, a family member or friend are receiving, here is a legislative change to be mindful of:
- Aged Care Complaints Commission. The existing Australian Aged Care Quality Agency and Aged Care Complaints Commission will be replaced by the Aged Care Quality and Safety Commission from 1 January 2019.
Aged Care Quality and Safety Commission Act 2018 and Aged Care Quality and Safety Commission (Consequential Amendments and Transitional Provisions) Act 2018. Royal assent on the 10th of December 2018.
In addition to this, being a carer for someone can often be a demanding role, especially from a financial perspective. The Government recognises this and subsequently offers several types of financial assistance (e.g. Carer Payment, Carer Allowance, and Carer Supplement) to eligible carers. In light of this, here is a legislative change to be mindful of:
- Carer allowance. A fixed and non-indexed family income test of $250,000 per annum (for single and partnered households) has been introduced for the Carer Allowance. Carers whose income exceeds this amount will no longer be eligible for the Carer Allowance. This applies to current Carer Allowance recipients and new claimants from 20 September 2018.
Social Services Legislation Amendment (Payments for Carers) Act 2018. Royal assent on the 29th of June 2018.
In a nutshell, you send your children to school to be educated because you believe a certain level of education will provide rewards and returns over their lifetime. In a similar vein, investing in yourself through an educational course or professional development program can often open the door to a promotion, pay rise, improvement in job security and stability, and/or other employment opportunities. In light of this, here is a legislative change to be mindful of:
- HECS/HELP Loan Repayment. The repayment rates and thresholds for HECS/HELP loans have been amended. New repayment rates and thresholds have been legislated to commence for the 2019-20 financial year. Please see the below table for further details.
|HECS/HELP Loan Repayment Rates and Thresholds (2019-20 financial year)|
|Repayment Rate (%)||Repayment Income Below ($)|
Higher Education Support Legislation Amendment (Student Loan Sustainability) Act 2018. Royal assent on the 14th of August.
If you would like to discuss any of these legislative changes and their relevance to your financial situation, goals and objectives, please do not hesitate to contact us.