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New tax laws you should know

There have been a few recent changes to the Australian tax system regarding refunds, benefits and offsets. Find out whether some of these changes may affect you:

woman preparing taxes

Education tax refund

In the 2012 budget, the Australian Government announced that the education tax refund (ETR) would be replaced with a new payment called the Schoolkids Bonus. You cannot claim the ETR for the expenses incurred in the 2011-12 tax year, or any excess eligible expenses you carried forward from the previous year. Transitional arrangements have been provided for the Department of Human Services to make a one-off payment to eligible families in June 2012. If you think you are eligible and have not received this payment, contact the Department of Human Services.

Low income tax offset — changes for minors

Minors (children under 18 years of age) will no longer be able to receive the low income tax offset to reduce tax payable on their unearned income (e.g., distributions from discretionary trusts, dividends, interest, rent, royalties and other income from property).

This change will not affect those minors who are, for example, disabled, orphaned, or were engaged in a full-time occupation at the end of the income year.

Dependent spouse tax offset phase-out

Eligibility for the dependent spouse tax offset will be limited to taxpayers with a dependent spouse born before 1 July 1971. Taxpayers who maintain an invalid or permanently disabled spouse, support a carer or who are eligible for the zone, overseas forces or the overseas civilian tax offsets are exempt from the new age limit. They will still be able to claim the value of the dependent spouse tax offset via an expanded invalid spouse, zone, overseas forces or overseas civilian offset.

Changes to private health insurance and Medicare levy surcharge

From 1 July 2012, the private health insurance rebate and the Medicare levy surcharge will be income tested against three new income thresholds. If you have private health insurance, the amount of rebate you will be entitled to receive will reduce if your income is over a certain amount. If you do not have an appropriate level of private patient hospital cover, and your income is over a certain amount, the rate of Medicare levy surcharge you will be charged will increase. The ATO will determine the amount of private health insurance rebate you are entitled to receive when you lodge your tax return.

Low income super contribution

If you are a low income earner the government super payment, known as the low income super contribution (LISC), could pay you up to $500 per financial year to help you save for your retirement. To be eligible, your adjusted taxable income should not exceed $37,000 and you have concessional contributions for the year made to a complying super fund. Visit ATO for further details.

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