Archive for May 14th, 2014

The 2014/15 Federal Budget: Salary Packaging Update

The Abbott coalition government handed down its first budget last night and, while it contained a range of measures designed to increase revenue and cut spending, it did not include any changes detrimental to the salary packaging opportunities available to Australian employees.

In fact salary packaging looks to be business as usual given the following:

  • the Statutory Formula Method for valuing car fringe benefits was left unchanged and so new vehicle packages will continue to have access to a concessional 20% valuation rate; and
  • the increase of the Superannuation Concessional Contributions Cap for employees under 50 from $25,000 to $30,000 will go ahead as planned from 1 July 2014 – opening up additional ‘room’ for superannuation packaging and assisting all employees to maximize their retirement benefits.

And the news was positive for employees of not-for-profit and Public Hospital employers:

  • it appears that there will be no erosion in the Threshold “Cap” benefit due to the planned increase to the FBT rate;
  • no changes have been made to any other salary packaging benefits typically available for employees of not-for-profit and Public Hospital employers

The budget did however contain a range of staffing changes to federal government employers which will result in movement of employees between federal departments and sadly, some employees leaving the system.  But Smartsalary is experienced in managing these changes and is committed to ensuring a seamless transition for any affected employees.

Overall it was a budget with minimal changes to salary packaging, and we will keep you posted with any further developments.


Deven Billimoria
Chief Executive Officer
Smartgroup

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