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Newsletter July 2011

The government has announced regulations that have reduced the minimum payment amounts for account-based pensions by 25% for the 2011/2012 financial year. The measure was previously announced in the Federal Budget 2011/2012.

For the 2010/2011 financial year, the minimum pension payment amount was reduced by 50%. The minimum annual payment amounts are as follows;

The NSW Office of State Revenue has determined the payroll tax rate and threshold for the financial year commencing 1 July 2011.

From 1 July 2011 to 30 June 2012 the payroll tax threshold is $678,000.

From 1 July 2011 the payroll tax rate is 5.45%

The Payroll Tax Rebate Scheme introduces a payroll tax rebate of $4,000 to employers that create new NSW jobs from 1 July 2011. The rebate is equivalent to the annual payroll tax bill for one employee on the average wage. The rebate will be paid in two parts, at 12 months and 24 months after the employee is hired.

The new job must be for a full time position and the position must be used for a period of at least two years.

To find out if you are eligible for the rebate, more information can be found at;

http://www.osr.nsw.gov.au/taxes/payroll/job_scheme/

The benchmark interest rate for the 2011/12 year for the purposes of the deemed dividend provisions of Div 7A is 7.80% (up from 7.40% for 2010/2011).

The benchmark interest rate is relevant to private companies that have lent money to the company’s individual shareholders or their associates.

It has been proposed that the government will means test the private health insurance rebate. The changes will implement three new Private Health Insurance Incentive Tiers;

• Tier 1 – singles whose income for surcharge purposes is from $80,001 to $93,000 inclusive, and couples/families whose income is from $160,001 to $186,000, in the 2011/2012 financial year, will have their private health insurance rebate reduced by 10% in respect of premiums paid after 1 January 2012. The Medicare levy surcharge will remain at 1% for those who do not hold appropriate private health insurance.
• Tier 2 – singles whose income for surcharge purposes is from $93,001 to $124,000 inclusive, and couples/families whose income is from $186,001 to $248,000, in the 2011/2012 financial year, will have their private health insurance rebate reduced by 20% in respect of premiums paid after 1 January 2012. The Medicare levy surcharge will be increased by 0.25% to 1.25% for those who do not hold appropriate private health insurance.
• Tier 3 – singles whose income for surcharge purposes is from $124,001 and over, and couples/families whose income is from $248,001 and over in the 2011/2012 financial year, will no longer receive any private health insurance rebate in respect of premiums paid after 1 January 2012. The Medicare levy surcharge will increase by 0.5% to 1.5% for those who do not hold appropriate private health insurance.

The Commissioner has set out the amounts he considers reasonable for the 2011/2012 year of income in relation to claims for;

• Overtime meal allowance expenses
• Domestic travel allowance expenses
• Travel allowance expenses for employee truck drivers
• Overseas travel allowance expenses.

The reasonable amount for overtime meal allowance expenses is $26.45 for the 2011/2012 income year.

The reasonable amounts for the other allowance expenses can be viewed here

The car limit for capital allowance purposes for 2011/12 remains at $57,466. The car limit is used to work out decline in value deductions of certain luxury cars.

Likewise, the luxury car tax threshold for 2011/12 is also $57,466. The fuel-efficient car limit for 2011/12 is $75,375.