What’s In The 2011 Budget That Will Directly Affect You?

The 2011 Budget promises to return Australia to surplus by 2013, but for individuals, the devil is in the immediate detail. Here’s Lifehacker’s rundown of the key changes that will affect your wallet.

Picture by R Walker

FBT and company cars: The rules applying to fringe benefits tax rebates on company cars will change in what appears to be an environmentally-driven policy. The official line is: “The fringe benefits tax (FBT) valuation of car benefits will be reformed by removing the incentive for people to drive their car further in order to obtain a larger tax concession, and in the process burn more fuel.”

Where previously the amount of FBT rebate was determined based on the distance the vehicle travelled, it will now be based on a flat rate of 20%. In effect, that means drivers who travel shorter distances (under 15,000 kilometres) are likely to get a bigger rebate, while those who travel more than 25,000 will see a smaller benefit. The new rules will apply to any company car contracts from now on, and will be phased in over four years for existing company car contracts.

Education tax refund. The education tax refund (ETR), which allows parents to claim some costs associated with purchasing computers, stationery and textbooks for school-age children, will be extended to cover the costs of school uniforms as well.

Family tax changes: There’ll be no indexation of Family Tax Benefit, with payments remaining at current levels. If you’re eligible, you’ll still get the payment, but it’s likely to pay for less as costs in general rise. However, payments for some families with teenagers will rise.

The dependent spouse tax offset is also being eliminated for anyone born after July 1 1971, as is the low income tax offset (to remove a potential rort where parents reassign income to their children to avoid tax payments).

HECS payment discounts shrinking. Life’s going to get a bit tougher if you’re a university student. From January 1 2012, the discount for paying HECS frees up-front will be reduced from 20% to 10%, and the bonus on voluntary payments over $500 against HECS debts to the ATO will drop from 10% to 5%. However, payments against HELP loans of more than $500 will now attract the same 5% bonus.

Digital TV subsidies: One of the most publicised pre-budget announcements was the annoucement of $376.5 million to continue funding access to digital set-top boxes for pensioners who might not otherwise be able to afford them. (That figure includes both hardware costs and installation, with the latter likely to consume more of the funding.) Pensioners only become eligible in the active “switchover” period six months before digital services are switched off in their region.

Lifehacker’s weekly Loaded column looks at better ways to manage (and stop worrying about) your money.

Republished from Lifehacker