Joe Hockey handed down his first budget as Treasurer earlier this week. A number of savings measures were announced within the areas of health services, foreign aid, education loan programs and family and welfare benefits.
Impact on Salary Packaging
• With the introduction of the Temporary Budget Repair Levy, there will be a small increase in the FBT Rate. The increase is due to take effect from the 1st April 2015 and will see the FBT rate increase from 47% to 49%.
• In addition to the FBT rate increase, we will consequently see an increase in the FBT gross up rates
• This is a temporary measure and will apply until 31/03/2017.
• The good news is that the cash value of benefits received by employees of public benevolent institutions, public and not-for-profit hospitals and other tax-exempt entities will be protected by increasing the relevant concessional caps
• The statutory formula method for valuing car fringe benefits was left unchanged – so vehicle packages will continue to have access to a concessional rate
• the increase of the Superannuation Concessional Contributions Cap for employees under 50 from $25,000 to $30,000 will go ahead as planned from 1 July 2014
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