101 Ways to Save Money on Your Tax - Legally! 2022-2023. Adrian Raftery
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are so many different types of government benefits these days that it is no wonder some families are confused, and aren't claiming everything that they should be entitled to. Most entitlements are means tested, which means the benefits you receive are reduced as your income increases.
If you're in doubt when estimating your annual income, it is always better to overestimate. It can be difficult to repay a debt to Centrelink if you have already spent the cash!
Family Tax Benefit Part A
This benefit helps with the cost of raising dependent children and dependent full-time students under the age of 18. The amount of the benefit is determined by your family income as well as the number and age of your dependants. It will only be paid up to the end of the calendar year that your teenager is completing school.
Family Tax Benefit Part B
Restricted to families where the primary earner has an adjusted taxable income under $100 900 with at least one child under 13, this benefit provides extra assistance to families with one main income. The lower-earning parent can earn up to $5840 per annum before the benefit reduces. The Family Tax Benefit Part B fades out when the secondary earner receives more than $28 945 income per annum if the youngest child is under 5 (reducing to $22 557 if the youngest child is between 5 and 13).
Parenting payment
This payment provides financial help for people who are the primary carers of children. It is means tested on both your income and assets.
JobSeeker Payment
If you are unemployed, looking for work and aged between 22 and the Age Pension age (currently 66.5), or you are sick or injured and cannot perform your usual work then you may be eligible for the JobSeeker Payment from Services Australia. The maximum fortnightly payment varies depending on your family situation but ranges from $642.70 per fortnight for single jobseekers with no children to $880.20 per fortnight for single principal carers.
There will be a waiting period of between 1 to 13 weeks depending on how much you have in liquid assets and you will not be eligible for the JobSeeker Payment if your other income or assets are over certain amounts.
Income test
Individuals may be entitled to the full JobSeeker Payment if your other income is less than $150 a fortnight and your partner earns less than $2145.67 per fortnight. It phases out once you reach an income cut-off point (from $1253.50 if single with no children to $2396 if single and you are the principal carer of a dependent child with no mutual obligation requirements.
Assets test
Single homeowners must have assets other than their home worth less than $270 500, rising to $405 000 for a home-owning couple. These thresholds increase by $216 500 for non-homeowners ($487 000 for singles and $621 500 for couples).
Youth Allowance
The Youth Allowance is a government benefit paid to eligible students, apprentices or those looking for work aged 16 to 24. It is means tested based on both the young person's income and his or her parents’ income. The allowance is assessable and must be included in your income tax return. Unfortunately, Youth Allowance recipients cannot claim a tax deduction for expenses incurred in relation to their studies.
National Disability Insurance Scheme
People with a permanent or significant intellectual, physical, sensory, cognitive and psychosocial disability and aged between 7 and 65 may be eligible to receive support via the National Disability Insurance Scheme (NDIS). If you have a child less than 7 years old who has a developmental delay or disability, the NDIS has partnered with early childhood partners across the nation to deliver the Early Childhood Early Intervention program to assist.
Transition to work
Transition to Work provides pre-employment help to eligible young job seekers who are aged between 15 and 24 years, and are not involved in study or work. Eligibility is only available if the young job seeker does not have a Year 12 (or equivalent) or Certificate III qualification.
Home equity access scheme
If you or your partner are of Age Pension age, you own real estate in Australia and you receive less than the maximum rate of the Age (or Disability Support or Widow B) Pension, then you can apply for a non-taxable loan if you need extra income or to help for a short time or an indefinite period. The loan is capped up to 1.5 times the maximum rate of pension, paid fortnightly. The 2021–22 federal budget proposed a no negative equity guarantee on the loan and access to a capped upfront lump sum payment of 0.5 times.
The principal from the Home Equity Access Scheme is accruing interest at a rate (currently 3.95 per cent) which is significantly higher than what banks lend at. Whilst we all know of the benefits of compound interest when saving, with no minimum repayment back to the government, there can be sizable detriment as interest is charged on interest over time.
Under the gifting rules, the maximum amount that you can gift to a friend or relative is $10 000 in each financial year and $30 000 in total over the previous five-year period. Any excess amounts are added back as part of your assets under the assets test.
Seniors card
Each state and territory has a free Seniors Card scheme which provides transport concessions and participating business discounts on a range of goods and services. To be eligible you must be a resident of the state, 60 years of age or older, and not working more than a set numbers of hours per week in paid employment (for example less than 20 hours in NSW and 35 hours in Victoria and Queensland).
Other benefits
The following additional benefits may also be available to families:
energy supplement
single income family supplement
telephone allowance
stillborn baby payment
education entry payment
carer adjustment payment
assistance for isolated children scheme
rent assistance.
10 FAMILY BREAKDOWN
While we all want to have the perfect marriage and live happily ever after, the sad reality is that approximately one-third of marriages end in divorce in Australia.
The tax system has provisions in place to assist with easing the financial burden of separating families. These provisions apply to capital gains tax (CGT), superannuation and income from child- and partner-support payments.
Transfer of assets
Normally, when you sell an asset that was acquired after 19 September 1985, you are liable for CGT. However, when you transfer assets to your spouse as a result of the breakdown of your relationship, it is