10 Australian Tax Changes Taking Effect From Today

The only constant about tax is change. Dr Adrian Raftery, a senior lecturer at Deakin University and author of 101 Ways to Save Money on Your Tax – Legally! 2014-2015 edition (Wrightbooks, June 2014, AU$24.95), provides us with some of the tax changes coming into play from July 1, 2014.

Medicare levy increasing to 2 per cent

From July 1, the government will raise the Medicare levy by half a percentage point to 2 per cent to provide a funding stream for DisabilityCare Australia.

Temporary budget repair levy

The 2014-15 federal budget announced that a 2 per cent levy would be introduced for the excess taxable income above $180,000 for three years from July 1, 2014 (for example, an individual with a taxable income of $200,000 will pay a levy of $400 being 2 per cent of $20,000). With the increase in the Medicare levy by half a percentage point to 2 per cent, this means that the highest marginal tax rate (as well as the FBT rate) will effectively jump from 46.5 to 49 per cent for the 2014-15, 2015-16 and 2016-17 years.

Net medical expenses tax offset being phased out

There is a gradual phasing out the net medical expenses tax offset. Only those taxpayers who claimed the medical tax expenses offset in 2012/13 and again in the 2013/14 year can continue to be eligible for this rebate in 2014/15 (pending having net expenses above the relevant thresholds).  The offset will continue to be available for out-of-pocket medical expenses relating to disability aids, attendant or aged care until July 1, 2019.

Dependent spouse and mature age worker tax offsets abolished

In changes proposed in the 2014 federal budget, the government plans on abolishing both the dependent spouse tax offset (previously worth up to a maximum $2,471) and the mature age worker tax offset (up to $500).

Super guarantee contributions increase

The superannuation guarantee contributions (SGC) will have a 0.25 per cent increase in the 2014–15 financial year to 9.5% of ordinary time earnings. There will be no further increases until July 1, 2019 when there will be annual 0.5 per cent rises until the SGC reaches 12 per cent in 2022–23.

Super contribution limits lifted

The concessional contributions limit will be lifted to $30,000 for all individuals and to $35,000 for those aged 50 and over.

Introduction of My Tax

From the 2014-15 income tax year, the ATO will provide an online pre-prepared tax return for people without complex tax affairs.  Australian resident taxpayers will be able to use MyTax if they have income only from salary, wages, allowances, bank interest, dividends and/or Australian government payments.  The only deductions allowed are for work-related expenses, expenses related to interest or dividend income, donations and/or the costs of managing their tax affairs, and the only offsets that can be claimed are the senior and pensioner tax offset and/or zone and overseas forces tax offset. Taxpayers are ineligible to use MyTax if they have business income or losses, rental properties, partnerships or trusts (including managed fund investments), capital gains or losses, foreign income, lump sum payments, employee share schemes or superannuation income streams and lump sum payments.

LAFHA rules limited to all

Access to the previously generous tax concessions for the living away from home allowance (LAFHA) is no longer available from July 1, 2014, regardless of the date of their employment contract.  The new LAFHA concessions can only be claimed by people who maintain a home for their own use in Australia that they are living away from for work. In addition, the LAFHA concessions can only be used for the expenses of people who are legitimately maintaining a second home in addition to their actual home for a maximum period of 12 months.

First home saver accounts scheme abolished

The 2014-15 federal budget announced that the FHSA scheme will be abolished from July 1, 2015 with account holders being able to withdraw their balances without restriction at that date. Whilst existing account holders will continue to receive the government co-contribution (and all associated tax and social security concessions) for the 2013-14 income year, new accounts opened from May 13, 2014 will not be eligible for any concessions.

Research & development (R & D) tax incentive reduced for small businesses

Companies with annual Australian turnover of less than $20 million will have the R&D tax incentive reduced from 45 per cent to a 43.5 per cent refundable tax offset from July 1, 2014.

July 1, 2014

10 Things to Consider When Finding a Financial Advisor

Investment Strategies

Charlie Benson, Finance Editor

Confused by the options available to you? Lost in the myriad of superannuation schemes and investment plans? You need a financial adviser. But how do you know that you’re getting the best advice for your circumstances?

10 Things to Consider When Looking For a Financial Adviser

  1. Determine what advice are you looking for – exactly? Are you looking for basic budgeting and financial planning advice, or more complex advice on investing or tax issues? Not all financial advisers are equal.
  2. Don’t ignore word-of-mouth recommendations. Ask your solicitor or accountant, your colleagues, friends and relatives to recommend a financial adviser.
  3. Draw up a list of two or three possible advisers, but before you contact them check out their credentials.
  4. Make sure your short-listed advisers are legally entitled to offer advice. Contact the Financial Planning Association ( for a list of authorised advisers on 1800 626 393.
  5. The Australian Securities & Investment Commission (ASIC) recommends you obtain a copy of your short-listed advisers’ advisory service guides. All advisers must have this document and be willing to forward a copy to you for your information. This document outlines the adviser’s business and allows you to ‘get the feel’ of their business and whether or not your needs match their skills. For instance, can they buy and sell shares on your behalf? Do you need them to be able to do this for you?
  6. Check your proposed adviser holds a licence directly from ASIC. You can check out who is licensed, and who is banned, online at
  7. The adviser’s advisory service guide should indicate whether or not the adviser belongs to an independent, external complaints scheme approved by ASIC. The guide should also clearly indicate whether or not the adviser is connected with, or works for, an investment company or bank, and should also explain how the adviser is paid, ie by you or by the organisation he/she represents by way of commission.
  8. ‘Interview’ your two or three short-listed advisers. Most advisers will offer a short obligation-free introductory meeting. It is important that you feel comfortable and relaxed with your financial adviser and not bullied or intimidated. Choose carefully now, or possibly regret your decision later. This initial meeting should briefly cover your current financial situation and objectives for the future. Do not allow yourself to be pressured into doing anything the adviser suggests on the spot – take your time to consider the options.
  9. If you’re happy with one of the advisers you’ve met with, check out their qualifications further. Qualifications to look out for include a Diploma of Financial Planning, the FPA’s Certified Financial Planner status or the Securities Institute of Australia’s undergraduate certificate and graduate diploma course.
  10. Find out up front how you will be charged by your adviser. Some charge by the hour, some receive commission deducted from your investment. The applicable fee arrangement should be clearly stated so that you can easily work out how much the services will cost you. If your adviser is charging you a direct fee make sure you are reimbursed if he/she subsequently receives any commission on your investment. You shouldn’t have to pay two lots of fees.
May 1, 2001