As July 1 creeps closer, the new financial year is set to bring a slew of updated rules and changes along with it. From big tax opportunities to major changes affecting superannuation, here’s everything Australians should be looking out for as they welcome in the 2020-21 financial year.
Super
Back when Covid-19 first began spreading across the country, those who were financially impacted were handed the lifeline of being able to access to up to $10,000 of their super funds, even if they weren’t of age. This will come to an end on June 30, but the second round is due to kick off on July 1, with some Aussies able to access an additional $10,000 of their balance.
The new financial year will also see the age limit for spouse contributions into superannuation raise from 69 to 74, meaning those aged 70 or older will now be able to receive contributions from their spouses provided they meet the work test from age 67. By doing this, some partners might be able to claim a pretty impressive tax offset.
Additionally, those aged 65 and 66 will be able to make voluntary concessional and non-concessional super contributions without meeting the work test. This test originally required people to gainfully work at least 40 hours over a 30 consecutive day period before making voluntary contributions. The welcome change will give older Aussies the chance to improve vital retirement savings regardless of their working hours.
There will also be a 50 per cent reduction in the minimum drawdown amount on account-based pensions after July 1 which could see pensioners have their income halved without notice.
Tax
With 4.8 million Australians working from home in light of increased restrictions between March 1 and June 30, there’s a lot to look forward for regarding tax. Some workers may be eligible to claim their working from home expenses through the ATO’s temporary shortcut method.
It allows those who worked from home in that specific four month period to claim 80c for each hour worked provided they were working from home to fulfil employment duties and have incurred extra running expenses not just minimal tasks like answering phone calls. It won’t carry over into the new financial year however so those who continue to work from home in July will revert back to previous methods.
Savings accounts
From July 1, consumers will be able to direct major banks to share data from their credit and debit cards, deposit accounts and transaction accounts with accredited service providers. The change, which will also include mortgage and personal loan data in November, is said to be a game changer for those looking to switch financial products by encouraging the move towards a more open banking system.
Vaccinations
Under the government’s National Immunisation Program (NIP), there will be changes to improve protection against meningococcal and pneumococcal disease. The pneumococcal vaccination dosage and timing have been updated for adults and people with conditions that increase their risk of disease. Meanwhile, Australians over 70 and Indigenous Australians over 50 may be able to get access to a free pneumococcal vaccine.
