Federal Budget 2022: Wealth management perspective
About the author:
- Author name:
- By Terri Bradford
- Job title:
- Head of Wealth Management
- Date posted:
- 30 March 2022, 8:30 AM
Our summary from a wealth management perspective
- From 1 July 2022, a one-off ‘cost of living’ tax offset of up to $420 will be available to low and middle income earners with taxable income up to $126,000.
- Combined with the LMITO – the low to middle income tax offset of $1,080 – means those income earners will receive up to $1,500 for single income household, or $3,000 for a dual income household, for the 2021/22 financial year.
- The LMITO will not be extended past the 2021/22 financial year.
- A one-off $250 ‘cost of living’ payment will be paid automatically to eligible pensioners, welfare recipients, veterans and eligible concession card holders in April 2022.
- Age pension payment increased on 20 March representing a 2.1% increase. The single pension increased by $20 a fortnight to $987.60 and the pension for a couple increased by $30.20 to $1,488.80 a fortnight.
- An investment of $165.0 million over 4 years to improve services for the wellbeing of veterans and their families. There will also be further investments to boost processing of claims for rehabilitation, compensation and income support submitted by veterans and their dependents.
- Extension of the 50% minimum pension drawdown rate for self-funded retirees into 2022/23 financial year.
- Continuing with March changes in relation to the removal of the annual cap on the Child Care Subsidy and increased subsidies for second and subsequent children, with an estimated savings of approx. $2,260 per year depending on the household income and number of children in child care (originally announced in last year’s 2021 Federal Budget).
- Expanding the existing Home Guarantee Scheme announced in the 2021 Federal Budget, to make available a further 50,000 places per year. Additionally, a new Regional Home Guarantee will be established with 10,000 places made available while the number of places under the Family Home Guarantee supporting single parents will double, to 5,000 places.
- Overhaul of Employee Share Schemes by scrapping the current $5,000 cap on the value of the shares that can be issued to certain non-executive employees, replacing it with a fixed cap on the amount employees pay for the shares
- An enhanced Paid Parental Leave for working families to provide increased flexibility to manage work and care.
- Increased funding of $19.4 million in 2022/23Fy for child care and early childhood education, in addition to the $1.7 billion investment in the 2021/22 Federal Budget. This will support the establishment of up to 20 new services in remote and regional areas where there is limited access to, or no child care.
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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
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