The 2012–13 Budget includes tax reforms aimed at improving the fairness of the personal tax and superannuation systems.
Fairer access to superannuation concessions
The Government is making the superannuation system fairer by reducing the tax concession which very high income earners receive on their concessional contributions, so it is more in line with the concession received by average income earners.
From 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their contributions cut from 30 per cent to 15 per cent (excluding the Medicare levy).
This reform will affect around 128,000 people or 1.2 per cent of people contributing to superannuation.
It builds on the Low Income Superannuation Contribution which will make the system of superannuation concessions fairer for 3.6 million low income earners.
Better targeting tax concessions
The Government will further reform the tax concession for living‑away‑from‑home allowances and benefits, by ensuring it can only be used for the expenses of people who are legitimately maintaining a second home in addition to their actual home, for a maximum period of 12 months.
This reform will apply from 1 July 2012 for arrangements entered into after 7.30pm (AEST) on 8 May 2012, and from 1 July 2014 for arrangements entered into prior to that time.
From 1 July 2012, we will better target tax breaks for golden handshakes. To reduce this concession, which currently provides a greater benefit to high income earners, the tax break will only apply to that part of a payment that, when combined with other taxable income, does not exceed $180,000.
To improve participation incentives, eight dependency offsets will be consolidated into one, from 1 July 2012. This reflects community attitudes by targeting assistance to taxpayers with dependants who are genuinely unable to work.
Change in concession for superannuation contributions, 2012‑13 (cents per dollar of contributions)
Change in concession for superannuation contributions, 2012‑13 (average dollar value of total concession)