Are you affected by the Australian government budget changes?

The Australian government's 2013/2014 budget was released a couple of weeks ago. It is basically a document the government releases every year outlining what they intend to spend our taxes on.

You might have heard that our country has a $18 billion budget deficit. This means our government plans to spend $18 billion more than it receives for the upcoming year. Obviously this is unsustainable in the long run so eventually our government has to either raise taxes or cut its expenditure. You may notice that most of the relevant tax changes are about saving money for the government.

Do these changes affect you?

• The baby bonus of up to $5,000 as we know it will be gone from 1 March 2014. Instead, mum's will receive $2,000 more in Family Tax Benefit Part A (if you are eligible) for their first child, and $1,000 more for any subsequent children.
  

• The medical expenses tax offset where you could claim 20% of your family's medical expenses over a certain limit will be phased out. Fortunately it can still be claimed for disability aids, attendant care and aged care related expenses for people who really needed it.
  

• While the Medicare levy will probably increase to 2% from 1 July 2014, the low income exemption thresholds have increased slightly to $32,279 for pensioners, $20,542 for other individuals and $33,693 for families with each child increasing the limit by $3,094.
  
• There will be no more discounts for up-front and voluntary payments towards Higher Education Loan Program (HELP or HECS for us oldies) from 1 January 2014. Currently you get a 10% discount if you pay your student contribution up-front and a 5% discount for any voluntary payments of at least $500 made afterwards.

And to save those of you who like to ask me what they are, here are the individual income tax rates and thresholds for last year and the financial year about to end so you can compare them.

Let me know if any of these changes concern you while I work on my next post which will be on how the budget changes may affect those of us with businesses.