The 2014-15 budget introduces a temporary budget repair levy of 2% on incomes over $180,000 starting July 1, 2014, along with adjustments to the paid parental leave scheme set to begin in July 2015. Additionally, the fringe benefits tax will increase from 47% to 49%, and changes to the superannuation guarantee rate will delay its increase to 12% until 2022-23. A new wage subsidy program called 'restart' will incentivize businesses to hire older workers, but all measures require passage through the senate.

1. Post Budget Highlights
ADP Insider
Post budget highlights.
May 15, 2014 - by ADP Insider
Looking through the 2014-15 budget
announcements and analysis, there are a
number of areas that will be of interest to human
resources and payroll professionals.
Budget Deficit Levy
As widely reported in the budget lead up period,
the Government announced a plan to introduce a
new levy from 1 July 2014 for a period of 3 years.
Officially named the Temporary Budget Repair
Levy, it will apply to incomes over $180,000 at
a rate of 2%. Other tax rates that are based on
calculations at the top tax rate are also planned
to increase by the same level and for the same
period.
Paid Parental Leave
The Government has committed to its altered Paid
Parental Leave scheme. Scheduled to kick off July
1, 2015, it will entitle new parents to six months
(26 weeks) of paid parental leave, determined by
the recipient’s full time salary capped at $50,000.
There are no proposed changes to the current
process of application, qualification, or payments.
The Government may be preparing to negotiate
further changes to the policy before it is tabled as
proposed legislation through the Senate. There is
a noticeable lack of detail about the new scheme
in the budget papers and some shifting of the
language when it is mentioned. For example:
“A genuine Paid Parental Leave (PPL) scheme will
be introduced from 1 July 2015 and will include
superannuation. This PPL scheme recognises the
vital contribution women make to our workforce.
The PPL will provide recipients up to 26 weeks
replacement wage at no less than the minimum
wage.”
Increases to FBT
The Fringe Benefits Tax (FBT) is set to increase
from 47 percent to 49 percent from 1 April 2015
until 31 March 2017 in alignment with the FBT
income year. This is expected to increase revenue
by $3.1 billion over the forward estimates. The
budget papers have explained that the increase is
designed to prevent high income earners utilising
fringe benefits to avoid the Temporary Budget
Repair Levy.
Charities and institutions that use fringe benefits
for employees will be somewhat insulated
from the change with the annual FBT cap being
increased. The fringe benefits rebate rate is to be
aligned to the FBT rate from 1 April 2015 also.
Superannuation Guarantee
The Government will make some changes to
the scheduled increases in the Superannuation
Guarantee rate to 12 percent. There is no
immediate impact for employers in the 2014-15
financial year, with the ramp up to the final 12
percent effectively being pushed out from 2019-20
to 2022-23. Treasury has explained the slowdown
being required due to the planned, but still
delayed, end to the Mineral Resource Rent Tax.
Here’s how the proposed schedule looks:
Financial
Year
Current Law
%
Proposed
Legislation %
2013/14 9.25 9.25
2014/15 9.5 9.5
2015/16 10 9.5
2016/17 10.5 9.5
2017/18 11 9.5
2018/19 11.5 10
2019/20 12 10.5
2020/21 12 11
2021/22 12 11.5
2022/23 12 12
Older Workers
A key budget measure that will affect businesses
is a wage subsidy program for up to $10,000 in
incentives over two years for businesses which
employ workers over 50 years of age.
Called the ‘Restart Program’, it offers incentives
to employers who hire older workers who were
previously un-employed for at least 6 months. An
initial payment of $3000 is given to an employer
who hires and retains an older full-time worker
for six months, with a further $3000 given after
12 months of full-time work, followed by $2000
subsidies at the 18 and 24-month marks.
For older workers who work part time (minimum
of 15 hours a week) the subsidy will be offered at
a pro-rata rate.
Passage through the Senate
All of these announcements are still subject
to successful passage through the Senate,
with Labor, the Greens, Palmer United Party
and ‘micro-parties’ all set to be involved in
negotiations to pass the measures.
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"The Fringe Benefits Tax (FBT) is
set to increase from 47 percent to
49 percent from 1 April 2015 until
31 March 2017 in alignment with
the FBT income year. This is
expected to increase revenue by
$3.1 billion over the forward
estimates."
ADP Insider