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  • What’s new this year 2021?

    COVID-19 measures and support

    Specific measures and support are available for individuals impacted by COVID-19 including:

    • JobKeeper payments for eligible employees
    • early access to superannuation which is not assessable income
    • an optional simplified method (from 1 July 2020 to 30 June 2021) to claim 80 cents for each hour you work from home to cover all deductible running expenses
    • specific advice on the tax treatment of employment payments made because of COVID-19 (for example, if you take leave, are stood down or lose your job)
    • specific advice on the tax treatment of residential rental property income and expenses.

    See also:

    Personal income tax cuts

    The government brought forward the tax cuts in Stage 2 of the Personal income tax plan from 1 July 2022 to 1 July 2020. As a result:

    • the upper limit of the 19% personal income tax bracket was raised from $37,000 to $45,000
    • the upper limit of the 32.5% personal income tax bracket was raised from $90,000 to $120,000.

    See also:

    Low income tax offset increased

    The government brought forward the tax cuts in Stage 2 of the Personal income tax plan from 1 July 2022 to 1 July 2020. Consequently, the low income tax offset increased to $700 from 1 July 2020.

    See also:

    Low and middle income tax offset

    The government's original intent in Stage 2 of the Personal income tax plan was that when the revised personal income tax thresholds came into effect and the low income tax offset increased to $700, the low and middle income tax offset would be abolished. However, the low and middle income tax offset will continue to be available for 2020–21.

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    Temporary full expensing

    Businesses with an aggregated annual turnover of less than $5 billion can deduct the business cost of eligible new depreciating assets if the assets are first held, and first used, or installed ready for use, for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 and 30 June 2022. These businesses can deduct the full cost of improvements to those assets, and to existing eligible depreciating assets, incurred in that period. In addition to those benefits:

    • businesses with an aggregated annual turnover of less than $50 million can deduct the business cost of eligible second-hand depreciating assets in 2020–21
    • small businesses with aggregated annual turnover of less than $10 million can deduct the entire balance of their simplified depreciation pool at the end of 2020–21.

    See also:

    Tax incentives for investment in affordable housing

    Australian resident individuals who provide affordable rental housing to people earning low to moderate income can claim an additional affordable housing capital gains discount of up to 10%. To qualify for this additional discount, you must have provided qualifying affordable rental housing through a registered community housing provider:

    • on or after 1 January 2018 for a period, or periods, totalling at least three years (1,095 days), which may be aggregate usage over different periods, and
    • either directly, or from a trust including where there is a interposed entity between you and the trust. The trust that provides the affordable housing and any interposed entities may be a trust, a managed investment trust or partnership, but cannot be a public unit trust or superannuation fund.

    See also:

    Dependents covered by private health insurance

    The government has proposed changes to Private Health Insurance Act 2007. The proposed changes will:

    • increase the maximum age for children to be covered as a dependent person under a family, single parent or dependent person-only private health insurance policy from under 25 years old to under 32 years old
    • allow children with a disability, regardless of their age and marital status, to be covered as a dependent person under a family, single parent or dependent person-only private health insurance policy.

    At the time of publishing, these changes had not yet become law.

      Last modified: 27 May 2021QC 64698