The 2016 Budget: Affects on Individuals and Families

How the 2016 Budget could affect you and your family

One of the Government’s big announcements and good news for families was to commit $1.2 billion of funding to our public schools, between 2018 and 2020.

Other news to affect both singles and families include increases the individual marginal tax rate, Medicare levy threshold and income tax relief for Australian Defence Force personnel deployed overseas. These are listed below:

Changes to individual marginal tax rates

From 1 July 2016, the 37% marginal threshold will apply to the taxable income of individuals from $87,000. To compare, currently, taxable income above $80,000 is subject to the rate of 37%.

Medicare levy and Medicare levy surcharge

With effect from the 2015-16 year, the low-income thresholds for both the Medicare levy and the Medicare levy surcharge will increase per the table below:

Medicare levy income thresholds

	2015-16	2014-15
Singles	$21,335	$20,896
Couples (no children)	$36,001	$35,261
Single seniors and pensioners	$33,738	$33,044
Senior and pensioner couples with no children	$46,966	$46,000

The additional amount of threshold for each dependent child or student will be increased to $3,306 (up from $3,238).

The increase in these thresholds takes into account movements in the Consumer Price Index (CPI) to ensure that generally low income taxpayers will continue to be exempted from paying the Medicare levy.

Medicare levy surcharge

The low-income threshold for the Medicare levy surcharge has been increased from $20,896 to $21,335 for:

a person who is married (or both married and a beneficiary of a trust); and
reportable fringe benefits.

Pause in indexation for Medicare levy surcharge and private health insurance rebate

The pause in the indexation of the income thresholds for the Medicare levy surcharge and the private health insurance rebate will continue for a further three years from 1 July 2018.

Income tax relief for Australian Defence Force personnel deployed overseas

Income tax exemptions will be provided for Australian Defence Force personnel deployed on Operation PALATE II in Afghanistan (from 1 January 2016 to 31 December 2016). The co-ordinates for Operation OKRA in the Middle East (from 9 September 2015) and Operation MANITOU in international waters (from 14 May 2015) will be updated.

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