General tax issues
2017/18 Personal Income Tax Rates
|Taxable income||Tax payable|
|$0 – $18,200||Nil|
|$18,201 – $37,000||Nil + 19% of excess over $18,200|
|$37,001 – $87,000||$3,572 + 32.5% of excess of $37,000|
|$87,001 – $180,000||$19,822 + 37% of excess over $87,000|
|$180,001 +||$54,232 + 45% of excess over $180,000|
Medicare Levy for 2017/18
The Medicare Levy is currently 2%, which includes a 0.5% component to cover costs associated with the National Disability Insurance Scheme (NDIS). There is no ceiling on the amount of levy payable by individual taxpayers.
For 2016/17, the Medicare Levy low-income threshold for families was increased to $36,541, and the additional amount of threshold for each dependent child or student is now $3,356.
The concessional Medicare Levy low-income threshold for individuals is presently $21,655; the full levy is payable when income exceeds $27,068.
The Medicare Levy low-income threshold for Senior Australians (applies to those eligible for the Seniors and Pensioners Tax Offset (SAPTO)) is $34,244; the full levy is payable at the full rate of 2% when an individual’s taxable income exceeds $42,805.
Low Income Tax Offset (LITO) for 2017/18
|LITO||From 1 July 2017 to 30 June 2018|
|Lower withdrawal limit||$37,000|
|Upper withdrawal limit||$66,667|
|Withdrawal rate per $||1.5%|
The 10% Tax Offset on CSS and PSS Pensions
The 10% tax offset is still available for CSS and PSS pensions of less than $100,000.
For CSS and PSS pensions of more than $100,000, the tax-free part of the pension (if any) must be counted first, and there is a 10% tax offset only for that part of the taxed part of the pension included in the first $100,000 of the total pension.
Seniors and Pensioners Tax Offset (SAPTO) for 2016/17 and 2017/18
This tax offset is available to both pensioners and self funded retirees as long as they meet certain criteria. The “rebate income” used to assess eligibility for this offset comprises taxable income, reportable superannuation contributions, total net investment loss and adjusted fringe benefits. The SAPTO for the 2016/17 tax year has yet to be announced.
The maximum tax offset is $2,230 and is reduced by 12.5 cents per dollar above the “rebate income” of $32,279 and cutting out when the individual’s income reaches $50,119.
For each partner of a couple, the maximum offset is $1,602 and is reduced 12.5 cents per dollar above the “rebate income” of $28,974; it cuts out when the partner’s income reaches $41,790.
Illness separated couple
For each partner of a couple separated by illness, the maximum offset is $2,040 and is reduced 12.5 cents per dollar above the “rebate income” of $31,279; it cuts out when the partner’s income reaches $47,599.
Dependent Offsets (DSTO and DICTO)
The government abolished the former Dependent Spouse Tax Offset (DSTO) for all taxpayers from 1 July 2014.
Eligibility for the Dependent (Invalid and Carer) Tax Offset (DICTO) from 1 July 2014 applies to taxpayers with a dependent who is genuinely unable to work due to a care obligation or a disability, who may be eligible for DICTO.
The test for satisfying the criteria for DICTO is very onerous; a dependent spouse with a disability must generally be receiving either a Social Security or Veterans’ Affairs pension or benefit, and the taxpayer must be receiving the Carer Payment. The care receiver must have a disability that requires constant care, and the carer must apply to Centrelink to be assessed according to the “Adult Disability Assessment Tool” (ADAT). To make the assessment, Centrelink has two forms, one for the carer and one for the doctor. The Carer Payment is means tested, against the same test used for the Age Pension.
If you need more information, see the fact sheet about Carer Payment and Carer Allowance at www.welfarerights.org.au.
Net medical expenses 2016/17 and 2017/18
The 2014/15 tax year was the last year you could claim these expenses, unless you have medical expenses relating to disability aids, attendant care or aged care, in which case you can claim the relevant tax offset for these expenses up to the 2018/19 income tax year. Legislation has been enacted for this offset to cease from the beginning of the 2019/20 tax year.