A Balancing Act - Individuals

A balancing act

The government will bring forward the second stage of its personal income tax plan by two years to July 1 2020 and retain the low and middle income tax offset. This approach aims to provide immediate relief to individuals and support economic recovery by boosting consumer spending.

As expected, the adjustments to tax rates that were originally due for implementation in the year ending 30 June 2023 have been brought forward to apply from 1 July 2020. Below is a table of the new tax rates.

The third stage of the tax cuts which are to apply from 1 July 2024 will still apply from that date. Additionally:

  • The Low and Middle Income Tax Offset (LMITO) will be retained for the 2020-21 income year.
  • The Low Income Tax Offset (LITO) will increase from

$445 to $700. The increased LITO will be withdrawn at a rate of 5 cents per dollar between taxable incomes of $37,500 and $45,000. The LITO will then be withdrawn at a rate of 1.5 cents per dollar between taxable incomes of $45,000 and $66,667.

Individual tax rates for residents

2020–21; 2021–22; 2022–23; 2023–24 tax thresholds

Taxable income

Rate (%)

Tax on this income

$0 – $18,200



$18,201 – $45,000


19c for each $1 over $18,200

$45,001 – $120,000


$5,092 plus 32.5c for each $1 over $45,000

$120,001 – $180,000


$29,467 plus 37c for each $1 over $120,000

$180,001 +


$51,667 plus 45c for each $1 over $180,000


Unintended superannuation accounts erode members’ balances through unnecessary fees and insurance premiums. For the first time, Australians will automatically keep their superannuation fund when they change employers. “Stapling” the super fund to the employee will ensure that their super follows them when they change jobs, stopping the creation of unintended multiple accounts.

Commencing 1 July 2021, the Your Future, Your Super package will improve the superannuation system by:

  • Having your superannuation follow you; preventing the creation of unintended multiple superannuation accounts when employees change jobs.
  • Making it easier to choose a better fund; members will have access to a new interactive online YourSuper comparison tool which will encourage funds to compete harder for members’ savings.
  • Holding funds to account for underperformance; to protect members from poor outcomes and encourage funds to lower costs the Government will require superannuation products to meet an annual objective performance test. Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.
  • Increasing transparency and accountability; the Government will increase trustee accountability by strengthening their obligations to ensure trustees only act in the best financial interests of members. The Government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of Annual Members’ Meetings.


First home buyers

An additional 10,000 first home buyers will be able to purchase a new home sooner under the extension to the First Home Loan Deposit Scheme. The additional 10,000 places will be provided in 2020-21. This will allow first home buyers to secure a loan to build a new home or purchase a newly built dwelling with a deposit of as little as 5%, with the Government guaranteeing up to 15% of a loan.

Boost for housing supply

The Government will increase its guarantee of the National Housing Finance and Investment Corporation (NHFIC) by $1 billion, enabling NHFIC to increase its bond issuance into the wholesale capital market.

Exempting granny flat arrangements from CGT

A targeted capital gains tax (CGT) exemption for granny flat arrangements will be provided where there is a formal written agreement. The exemption will apply to arrangements with older Australians or those with a disability.

This measure arises from concerns that the current CGT rules impede the creation of formal and legally enforceable granny flat arrangements. It’s aimed at removing these CGT impediments and reducing the risk of abuse to vulnerable older Australians. However, the proposed measures will only apply to agreements that are entered into because of family relationships or other personal ties, and will not apply to commercial rental arrangements.


The Government has invested $3.2 billion in personal protective equipment (PPE) and it is also providing

$112 million for the continuation of Medicare-rebated telehealth services for GP, allied health and specialist consultations to ensure ongoing access to essential health services.

It is providing an additional $746.3 million to support senior Australians in aged care, workers and providers to respond to the COVID-19 pandemic. This includes $245 million for a COVID-19 Support Payment to assist providers with additional costs and $205.1 million for the Workforce Retention Bonus Payment for frontline aged care workers.

Further support for older Australians who wish to stay at home for longer will be provided through $1.6 billion for an additional 23,000 home care packages across all package levels.

Additional funding will provide access to an extra 10 Medicare-subsidised psychological therapy sessions for people with a mental health care plan.

Funding for the National Disability Insurance Scheme (NDIS) has been guaranteed, as the Government is providing a further $3.9 billion to the NDIS.

Funding of $102 million over four years from 2020- 21 for veteran mental health and well-being initiatives includes:

  • $94.3 million to improve mental health outcomes and ensure high-quality care for our older veterans and their families by increasing fees paid to mental health, social work and community nursing providers
  • $7.4 million to expand Open Arms counselling services and the Coordinated Veterans’ Care program.

The Government will invest $453 million to extend the National Partnership Agreement on Universal Access to Early Childhood Education until the end of 2021.

In 2020-21, it will pay approximately $9 billion in the means-tested Child Care Subsidy payments. 