Tax benefits and new rules from 1 July 2020

July 2, 2020

The government has outlined key measures in effect from Wednesday 1 July 2020 that will help Australians transition through the impacts from COVID-19. Those relating to tax and superannuation include:

Tax relief for low-and-middle-income earners — As part of the government’s updated Personal Income Tax Plan, the low-and-middle-income tax offset (LMITO) will provide tax relief of up to $1080 at the end of each tax year to 2021-22

Small business tax cuts — the tax rate for small businesses structured as companies with turnovers of less than $50 million will decrease from 27.5 per cent to 26 per cent while the unincorporated tax discount will increase from 8 per cent to 13 per cent.

Second economic support payment — two separate $750 payments will be provided to social security, veteran and other income support recipients and eligible concession card holders. The second payment will be available to people who are eligible payment recipients and concession card holders on Friday 10 July 2020.

Extension of the instant asset write-off — the $150,000 instant asset write-off has been extended for six months from Wednesday 1 July 2020 to Thursday 31 December 2020 for Australian businesses with annual turnover of less than $500 million.

Temporary early access to superannuation — eligible Australian and New Zealand citizens and permanent residents will be able to apply online through myGov to access up to $10,000 of their superannuation from Wednesday 1 July 2020 to Thursday 24 September 2020.

Increase the Medicare levy low-income thresholds — the Medicare levy low-income thresholds for individuals and families, and individuals and families eligible for Senior and Pensioner Tax Offset have been increased in line with movements in the Consumer Price Index.