2013 Mature Age Worker Tax Offset Changes
The mature age worker tax offset of $500 that is for those over years of age and earning under $63,000 has been changed. For the 2012-13 year and onwards, you must have been born before 1st July 1957 to gain access to the offset.
The offset phases in at 5% until the taxable income reaches $10,000 where the full offset is available. The offset then starts to phase out at 5% from $53,000 and the offset reduces to nil at $63,000 of taxable income.
Example 1: Net income from working $40,000 but total income above $53,000
David, a Camberwell Accountant was born on the 15th March 1957 and works part time earning $40,000. He has other investment income of $20,000. As he has net income from working of less than $53,000 and was born before 1st July 1957 a full offset is available.
Example 2: Net income from working $57,000
David is an accountant in Caulfield and earns $57,000 on a part time basis. As his income from working is above $53,000, his offset entitlement is:
$500 – [5% x (57,000 – 53,000)] = $300
Only net income from working is eligible for the offset. Net income from working includes:
Less the deductions as a result of working. Some amounts are specifically excluded from the definition of ‘net income from working.’ The definition excludes for example lump sums from superannuation payouts and employment termination payments.
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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.