Proposed Amendments to Tax Laws
The Government has introduced the Tax Laws Amendment (2009 Measures No 1) Bill into Parliament. The amendments include:
- providing reductions in PAYG instalment amounts;
- changing the reporting requirement for employees’ PAYG summaries; and
- changing the income tests for tax and social security programs.
PAYG instalment reduction
In addition to the 20% PAYG instalment reduction for small businesses for the December 2008 quarter, the Bill proposes to allow the tax regulations to reduce PAYG instalment amounts in certain circumstances.
PAYG summary reporting requirement
The Bill will ensure that reportable employer superannuation contributions (RESC) are reported on employees’ PAYG summaries.
Amendment of income tests
The Bill will amend the income tests used to determine an individual’s eligibility for tax programs and/or social security programs.
Reportable superannuation contributions, RESC, adjusted fringe benefits total and total net investment losses will be included in income tests, where appropriate.
The tax programs and social security programs that will be affected include:
- Medicare levy surcharge;
- senior Australians tax offset;
- Government superannuation co-contribution scheme;
- mature age worker tax offset;
- deductions for personal superannuation contributions;
- Commonwealth Seniors Health Card; and
- Family Tax Benefit Part A and Part B.
In broad terms, RESC include salary sacrifice amounts and superannuation contributions above the minimum prescribed support (currently 9%).
Broadly, reportable superannuation contributions consist of two components: personal superannuation contributions for which a tax deduction is available and RESC.
TIP: Total net investment losses will capture losses which arise from investment losses, margin loan arrangements and rental properties.
TIP: Individuals who currently sacrifice an amount of their salary into superannuation should re-evaluate their eligibility for the government co-contribution payment.
