RBF 2008 Federal Budget Snapshot

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2008 Federal Budget Snapshot
	We can all breathe a sigh of relief. The 2008 Federal Budget produced very few changes for super. Below is a quick summary of some aspects of the budget that we think you should know about.

Super withdrawals are still tax free if you are over 60

The great news is that the Better Super initiative, which introduced tax-free withdrawals from age 60, will continue.

Marginal tax rate changes

The Government have confirmed they will amend personal income thresholds from July 2008. The table below shows the current tax thresholds and the changes that will come into effect from July 2008.

Current 2007/08 financial year		2008/09 financial year
Taxable Income $	Tax rate %	Taxable Income $	Tax rate %
0-6,000	0	0-6,000	0
6,001-30,000	15	6,001-34,000	15
30,001-75,000	30	34,001-80,000	30
75,001-150,000	40	80,001-180,000	40
Over 150,000	45	Over 180,000	45

Salary Sacrifice

From 1 July 2009 Salary Sacrifice contributions will be included in the expanded definition of 'income' when determining eligibility for:

Super Co-contribution
Family assistance
Child support
Income support payments for people below the Age Pension
Financial and retirement savings assistance

For members, this means you won't be able to use Salary Sacrifice to reduce your assessable income to be eligible for the Super Co-contribution. However, eligible members will still enjoy the tax benefits of contributing to super through Salary Sacrifice.

Fringe Benefits Tax (FBT):

Effective 13 May 2008, changes apply to the FBT exemption rules for purchase of work related items, such as laptop computers, PDAs, and mobile phones. The new rules mean only items used primarily for work purposes will receive the exemption, and will be limited to one item of each type per employee per year.

Check with your employer to see if you are eligible for the FBT exemption when purchasing work related items.

Seniors health card - income test amended

The Government has proposed amendments to the income test that applies when assessing eligibility for the Commonwealth seniors health card. The proposal is to include gross income from super income streams (from a taxed source) and any salary sacrificed income into super.

This means that all income, such as income from an RBF Allocated Pension, will be included in the assessment when you apply for a seniors health card. It is important to keep in mind that this is just a proposal at this time.