The HECS-HELP benefit for early childhood teachers aims to encourage early childhood education teachers to take up employment in rural and regional areas, Indigenous Australian communities and areas of high socio-economic disadvantage. The Tax Office have produced a list of eligible work location postcodes. The benefit is one of  a number of initiatives the Australian Government announced in the 2008 Budget to implement its ‘education revolution’ policy.

You need to lodge an application for each income year you apply, and if you are successful, you could receive up to a maximum of $1,600 for the 2008–09 income year either as a:

• reduction in the amount of your compulsory HELP repayment shown on your income tax notice of assessment, resulting in a reduction to your accumulated HELP debt, or
• reduction in your accumulated HELP debt where:
  • you do not have to make a compulsory HELP repayment because your repayment income is below the minimum repayment threshold
  • a compulsory HELP repayment is not required because, due to low family income, you are entitled to a reduction of the Medicare levy or do not have to pay the levy, or
  • you successfully applied to defer your compulsory HELP repayment for the year.

To find out if you might be eligible for this benefit, speak with your tax agent or see the Tax Office website.

You can apply for the HECS-HELP benefit from 1 July 2009 for the 2008–09 income year.

The HECS-HELP benefit aims to encourage maths and science graduates to take up employment in specified occupations, including teaching of those subjects in primary and secondary schools. The benefit is one of  a number of initiatives the Australian Government announced in the 2008 Budget to implement its ‘education revolution’ policy.

You need to lodge an application for each income year you apply, and if you are successful, you could receive up to $1,500 for the 2008–09 income year. The benefit will reduce your compulsory HELP repayment as shown on your income tax notice of assessment, resulting in a reduction to your accumulated HELP debt.

Naturally, there are several criteria of eligibilty that must be met (you can find out more about this from your tax agent or by visiting the Tax Office Website).

You can apply for the HECS-HELP benefit from 1 July 2009 for the 2008–09 income year.

Parents should ‘keep their receipts’ for education expenses in light of the proposed commencement of the Education Tax Refund from 1 July 2008. Under the ETR, eligible families will be able to claim:

? a 50 per cent refundable tax offset every year for up to $750 for each child undertaking primary school, (that is, a refund of up to $375 per child, per year);

? a 50 per cent refundable tax offset every year for up to $1,500 for each child undertaking secondary school (that is, a refund of up to $750 per child, per year).

Generally, you are entitled to the ETR if you get Family Tax Benefit (Part A) for the child you wish to claim for. Also, eligibility is extended to parents who would be entitled to FTB Part A but for the fact the child receives other payments such as Youth Allowance. 

The refundable tax offset will apply to expenses incurred from 1 July 2008 and will be claimed upon lodgement of a 2008–09 income tax return.

Eligible families will be able to recoup the cost of purchases including:

·         laptops;

·         home computers and associated costs;

·         home internet connection;

·         printers;

·         education software;

·         trade tools for use at school;

·         school text books; and stationery.

Eligible expenses are for items that support a child during school and improve the quality of education.

You can download an ETR Fact Sheet from the Treasury website at this page or simply email me (christie at lewistaxation.com.au) and I’ll email one off to you.

From 1 July 2008, families who receive FTB Part A with children in primary or secondary school will be able to claim a refundable tax offset for eligible education expenses. The offset will be claimed through the individual tax return for the relevant income year.

Eligible expenses would appear to include laptops, education software, text books, etc. I’ll be very interested to read the fine print concerning these items.

Eligible parents will be able to claim the following:

• A 50% tax offset each year for up to $750 for each child attending primary school (maximum of $375 per child per year).
• A 50% tax offset each year for up to $1,500 for each child attending secondary school (maximum of $750 per child per year).

From 1 July 2008, the Child Care Tax Rebate (CCTR) will increase from 30% to 50%. Currently this payment is made annually through Centrelink to cover out-of-pocket childcare expenses.

The maximum value of the claim will increase from $4,354 per child to $7,500 per child per year.

The payment frequency of the CCTR is set to change also and will be made quarterly to help with the expense as it is incurred.

From 1 July 2008, the Baby Bonus will increase from $4,258 to $5,000.

There have been some other changes too. From 1 January 2009, eligibility for the bonus will be limit to families with income of $75,000 or less in the six months after the birth of the child (effectively, $150,000 per annum).

Additionally, from January, it is my understanding that the baby bonus will no longer be paid as a lump sum, but in fortnightly instalments.

A few other budget changes and initiatives include:

• Restricted eligibility for the Entrepreneur’s tax offset.
• Changes to fringe benefits regarding the current exemptions.
• Depreciation period changed for in-house software.
• Definition of a family changed with regards to family trusts.
• Expanding the definition of income for government support.
• No deductions allowed for donations to political parties.
• Luxury car tax rate to increase from 1 July 2008 to 33%.
• Family Tax Benefit Part B limited.

The First Home Saver Accounts (FHSA) will operate from 1 October 2008.

There have been some changes since the original proposal was first released. I’ll be writing in more detail on the FHSA soon (there’s a lot to cover).

Basically, eligible taxpayers make deposits into the accounts and the Government will partly match these contributions. Earnings on the accounts will be taxed at the low rate of 15%.

Look out for more information coming soon! 

From 1 July 2008, an income threshold of $150,000 will apply when determining a taypayer’s eligibility for claiming certain tax offsets. These include Dependent Spouse, Housekeeper, Child Housekeeper, Invalid Relative and Parent/Parent-in-law tax offsets.

Currently these offsets are not income tested. By July 2009, the Government has said they will also align the definition of ‘income’ for these tax offsets so that they match family assistance payments.

The amount of income a senior Australian eligible for the Senior Australian Tax Offset (SATO) can earn before they incur a tax liability will increase to the following:

2008-09:

Singles $28,867     Couples (each) $24,680

2009-10:

Singles $29,867     Couples (each) $25,680

2010-2011:

Singles $30,685     Couples (each) $26,680

The Medicare Levy low-income threshold will also be increased to ensure that seniors will not pay the Medicare levy until they begin to pay income tax.

From 1 July 2008 the Low Income Tax Offset (LITO) will increase from $750 to a generous $1,200. This means a taxpayer will be able to earn $14,000 before they pay tax.

From 1 July 2009, it will go up even further to $1,350 and from 1 July 2010 will reach $1,500.

The tax offset will continue to be phased out at $30,000.

You can read more about the current LITO eligibility and rates from our main site.  

From 1 July 2008 the Medicare levy surcharge thresholds will be increased.

Singles without adequete private health cover will no longer be liable for the surcharge until their income exceeds $100,000 (currently $50,000).

The family threshold will also increase to $150,000 (currently $100,000).

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The Government has set a six-year tax goal for personal income tax rates. Currently, we have 4 tax rates (15%, 30%, 40% and 45%). The Government plans to reduce this to just three tax rates by eliminating the top marginal rate of 45%. 

You can see the 2007-08 tax rates from our main site.

Thresholds will increase over the next few years so by 2010, a resident on $37,000 will still be in the 15% tax bracket. Upcoming changes include:

From 1 July 2008

• 15% rate applies from $6,001-$34,000
• 30% rate applies from $34,001-$80,000
• 40% rate applies from $80,001- $180,000