What does the budget mean for you

Author name:: By Ashley Sim
Job title:
Date posted:: 23 June 2021, 8:30 AM

On Tuesday, 11 May 2021, the Treasurer Josh Frydenberg presented the 2021 Federal Budget. This year, the primary focus was on maintaining the momentum of Australia’s economic recovery through delivering forms of economic stimulus. However, what does this mean for you?

Key Benefits

Personal Tax Relief

The government has planned to deliver a further $7.8 billion in personal income tax cuts to more than 10 million low and middle income earns worth up to $1,080 for individuals. This could result in you paying less tax again this year than normal with more money going into your pocket!

Assistance with Home Ownership

In the 2018 Budget, the First Home Super Saver scheme was announced which allows people to contribute additional funds into superannuation to help save for their first home. This scheme assists first home savers in boosting their savings and often results in a positive tax outcome. In the past, the maximum amount of voluntary contributions that can be released has been $30,000 per person, however this has now been increased to $50,000.
The new home guarantee has been extended by a further 10,000 places for the 2022 financial year. This program assists first home buyers seeking to build or buy a brand-new home only requiring them to have a deposit of as little of 5%.
In addition to the above two measures, a new program has been introduced called the Family Home Guarantee to assist single parents with dependants, regardless of you being a first home buyer or a previous owner occupier. 10,000 guarantees will be available over the next 4 years to eligible single parents with a deposit of as little as 2% required, depending on individual circumstances.

More Flexibility Around Super

Currently superannuation members aged between 67 – 74 must satisfy the work test if they wish to make superannuation contributions, which means they must be gainfully employed. However, under the proposals in the budget, the work test may no longer apply to members below age 74 when making after tax or salary sacrifice contributions after 1 July 2022.
In an attempt to make housing more affordable, from 1 July 2018 individuals aged 65 and older have been able to contribute up to $300,000 each into super from the proceeds of selling their principal place of residence. In this budget, this age will drop to 60 from 1 July 2022.

Depending on your personal situation, these changes may have a positive impact on your personal situation, by paying less tax, having more flexibility around super and making it easier to purchase your first home.

Let Us Help

If you are interested in discussing how these changes may impact you, please contact Morgans Mackay today by calling (07) 4957 3033 or visiting the Morgans Mackay webpage.

Disclaimer: These changes are proposals only and may not be made in law. The information contained in this report is provided to you by Morgans Financial Limited (Morgans) AFSL 235410 ABN 49 010 669 726 as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.