With the launch of the new Australian Taxation Office (ATO) it is clear there is a need to re-think the home care tax credit (HCTC).
There are a number of key points to keep in mind as the ATO takes its first step towards introducing the HCTC: 1.
The HCTB has no cap on how much you can claim.
Under the new system, the maximum tax rate will be 40 per cent on all income above $150,000.
This is a significant change from the current HCT cap which is capped at 12.5 per cent.
The ATO will be looking at ways to reduce this cap to make the HctC work more effectively for the majority of people.
This will include: · Cap relief for families with a low income with higher than average incomes · Reducing the cap on the amount of tax you can reclaim from a qualifying carer, for example, and reducing the cap for carers who claim the HCtB.
The new HCT is limited to a maximum of $250,000 in a year.
This means that the maximum amount you can contribute to the HcT is $250 a year (or $2,000 for couples).
This will be phased out over a three-year period.
However, it is important to note that it is not possible to change the limit, as this will be subject to approval by the Treasury and the Federal Parliament.
The maximum amount that can be contributed is $150 a year for a family of four.
This would be $150 less than the current maximum of about $2.5 million for a couple.
This reduction in the maximum will not apply to people claiming the HCCB, as the new cap will apply to the rest of the HbT (which currently includes the Child Care Rebate).
However, you will not be able to claim the full HCT if you have a disability.
The Government will be consulting with the ACCC on this.
·The HctB will be available to all Australian workers in the early years of the tax year, and will continue to be available until July 1, 2021.
· The Hct will be introduced by the ATo with a one-off payment of $500 to be paid to the carer.
This payment will be automatically withdrawn once the family receives a certificate of eligibility from the ATa.
This benefit will not extend to the spouse of a carer who has obtained a certificate.
· You will be able claim the payment up to $50,000 from the first year of the year you started working as a care worker.
This does not apply if you are an employee or self-employed, and the payment is for a minimum of two years.
The minimum payment will not exceed $50 per week, but it will be increased for everyone in the year starting from July 1 to July 1 of the following year.
The additional payments will be made on a sliding scale to reduce the tax burden for the most financially vulnerable.
This may include people who have no access to financial resources, who have limited income, or are pensioners.
· A new family income threshold of $70,000 will be set for the first two years of eligibility.
This threshold is set to increase by $50 for every additional $50 you earn in the next two years, to a total of $180,000, over a period of four years.
This increase will apply for each of the four years of a four-year entitlement.
The threshold will be indexed to the Consumer Price Index (CPI) to keep it within a reasonable range.
It is possible for people to claim a payment of up to the new threshold in a given year, with a maximum benefit of $90,000 if the HCAB is applied at that time.
The thresholds are set out in the 2018 Budget, and there is also a new $10,000 maximum benefit for people who are claiming a higher-earning spouse or partner, or people on a disability pension.
The government has also announced that all Australians who are self-sufficient (for example, self-funded or on a supplement) will be entitled to the $50 HCT.
However it is unclear whether this will apply on a full-time basis, or if people who earn a full wage (for instance, self employed or in a partnership) will also be entitled.
· For people who self-pay, the Hcb will be replaced by a new system of payments made by the care worker on behalf of the family.
The payments will not include the Hcc, as these payments are for the benefit of the household.
· In the first three years of self-sufficiency, the threshold for a single person with no children will be raised from $70 to $80, and for couples it will rise from $90 to $100. In the