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Temporary Budget Repair Levy

The Government has introduced a three-year Temporary Budget Repair Levy on individuals who have a taxable income in excess of $180,000.

The levy is payable at a rate of 2 per cent of each dollar of a taxpayer’s annual taxable income over $180,000. No levy is payable where the taxpayer has a taxable income of $180,000 or less.

The levy will apply from 1 July 2014 and apply to the 2014-15, 2015-16 and 2016-17 financial years. It is expected to raise around $3 billion.

The introduction of this levy means that individuals with taxable incomes exceeding $180,000, and who are liable for the Medicare levy surcharge, will be subject to the top marginal rate of 50.5 per cent of income.

Non residents are also expected to bear the burden of the Temporary Budget Repair Levy.

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News

Tax on super death benefits for dependants vs non-dependants

July 9, 2020

A super death benefit is the super paid after a person’s death, usually to a nominated beneficiary. These benefits are subject to different tax treatments, depending on whether the beneficiaries are dependant or non-dependant.

Superannuation death benefits will generally be received tax-free by tax dependants, who are considered to be:

Dependants will not have to pay tax on the tax-free component of their super in the event that they:

However, they will be taxed at their marginal rate if they receive a capped benefit income stream and:

Not all super death benefits are subject to tax; for non-dependants, there is a taxable portion. This component is largely made up of after-tax super contributions that the deceased member has made.

Super death benefit payments are subject to tax when:

Non-dependants must calculate how much money in the super account is a:

The amount of tax non-dependants pay will be based on their marginal tax rate, however, this amount may be reduced by tax offsets. For the taxed element of the taxable component, the effective tax rate is your marginal tax rate of 17% (whichever is lower). For the untaxed element of the taxable component, the effective tax rate is 32% or your marginal tax rate (whichever is lower).