Check out this post about COVID-19 ATO Updates in Australia.
The mature age worker tax offset of $500 that is for those over years of age and earning under $63,000 has been changed. For the 2012-13 year and onwards, you must have been born before 1st July 1957 to gain access to the offset.
The offset phases in at 5% until the taxable income reaches $10,000 where the full offset is available. The offset then starts to phase out at 5% from $53,000 and the offset reduces to nil at $63,000 of taxable income.
Example 1: Net income from working $40,000 but total income above $53,000
David, a Camberwell Accountant was born on the 15th March 1957 and works part time earning $40,000. He has other investment income of $20,000. As he has net income from working of less than $53,000 and was born before 1st July 1957 a full offset is available.
Example 2: Net income from working $57,000
David is an accountant in Caulfield and earns $57,000 on a part time basis. As his income from working is above $53,000, his offset entitlement is:
$500 – [5% x (57,000 – 53,000)] = $300
Only net income from working is eligible for the offset. Net income from working includes:
- Personal Services Income/personal exertion income
- Business Income including partnership income
- Reportable Fringe Benefits
- Reportable Employer Superannuation Contributions
Less the deductions as a result of working. Some amounts are specifically excluded from the definition of ‘net income from working.’ The definition excludes for example lump sums from superannuation payouts and employment termination payments.
Hillyer Riches is a specialist accounting, business advisory and smsf firm located in Melbourne. We service areas such as Camberwell, Caulfield & Malvern. For more information email email@example.com or phone us on 03 9571 5333.
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.