New Changes to Family Tax

The ATO has provided a summary of many of the tax changes that apply to families from 1 July 2011.

Education Tax Refund – Inclusion of School Uniforms

The Government has changed the education tax refund to include school-approved uniforms (including hats, footwear and sports uniforms approved by a school as its uniform) purchased from 1 July 2011.

Dependent Spouse Tax Offset Phase-out

From 1 July 2011, eligibility for the dependent spouse tax offset will be confined to taxpayers with a dependent spouse born before 1 July 1971.

Taxpayers who maintain an invalid or permanently disabled spouse, support a carer or who are eligible for the zone, overseas forces or the overseas civilian tax offsets are exempt from the new age limit and will still effectively be able to claim the dependent spouse tax offset via an expanded invalid spouse, zone, overseas forces or overseas civilian offset.

Low Income Tax Offset – Changes for Minors

The Government will remove the ability of most minors (children under 18 years of age) to access the low income tax offset to reduce tax payable on their unearned income (for example, distributions from discretionary trusts, dividends, interest, rent, royalties and other income from property).

Medical Expenses

Taxpayers can claim a tax offset of 20% of their net medical expenses over the set threshold, which is $2,060 for the 2011/12 income year (up from $2,000 for the 2010/11 income year).

Paid Parental Leave

Australia's Paid Parental Leave Scheme started on 1 January 2011. Eligible working parents will receive parental leave pay (currently $589.40 a week before tax) for a maximum period of 18 weeks.

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