Reducing the tax burden

Bracket creep is often cited as the single-most damaging financial aspect of the average income earner. Well, if you consider $80,000 to be an average income, relief is on its way.

Reducing personal income tax burden

From 1 July this year, the threshold at which individuals move into the second highest tax bracket of 37 per cent, will increase from $80,0000 to $87,0000.

This measure is expected to keep 500,000 Australians in the middle tax bracket for longer and has an associated cost of $4 billion over the forward estimates period until 2020.

Medicare levy threshold increase for low-income earners

Low-income earners will benefit from an increase in the Medicare level low-income thresholds from the 2015-16 financial year. In response to movement in the Consumer Price Index (CPI) the threshold will be increased so that those on lower incomes remain exempt from paying the Medicare levy.

 

Family situation

Threshold

Single

$21,355

Couples

$36,001

Single seniors and pensioners

$33,738

Couple seniors and pensioners

$46,966

 

This measure has expected associated costs of $280 million over the forward estimates period until 2020.

Do you think $80,000 is an average income? Should more be done for those on lower incomes?

Related articles:
Budget 2016/17: Kaye asks “Is that all there is?”
Budget 2016/17: Super changes for high income earners
Budget 2016/17: Targeted welfare safety net
Budget 2016/17: Crackdown on multinational tax avoidance
Budget 2016/17: How will the new tax changes affect the individual?
Budget 2016/17: Government to invest a record $50 billion on infrastructure
Budget 2016/17: Scott Morrison on a fairer super system
Budget 2016/17: Making super fairer and sustainable
Budget 2016/17: What’s in it for retirees?

Written by Debbie McTaggart

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