Flood Levy and Schoolkids’ Bonus
With the 2012 tax season now in full swing, we’ve already fielded questions on the many various changes to the 2011-2012 individual tax return. Below we discuss two major changes you should be aware of – and don’t worry, they are quite simple!
What is the flood levy? Do I have to pay it?
A one-time charge paid by taxpayers in 2012, the flood levy helps communities affected by natural disasters. The levy funds reconstruction of essential infrastructure.
Anyone who earned more than $50,000 in 2011-2012 financial year will pay 0.5 cents for each dollar earned over $50,000 plus 1 cent for each dollar over $100,000.
- “I earned $47,000.” You do not need to pay the flood levy because your income is below $50,000.
- “I earned $60,000.” You will pay 0.5 cents per dollar earned over $50,000, ($10,000 X $0.005 = $50).
- “I earned more than $100,000.” You’ll pay $250 plus 1 cent for every dollar earned over $100,000.
Those who were affected by a declared natural disaster are exempt from paying the levy. This includes those who were affected by the Brisbane Floods, the Northern NSW floods and the Western Queensland floods.
If you’re unsure whether you should be exempt from paying the flood levy, simply send your accountant a message using the “my messages” tool from the top grey toolbar of your online tax return.
Education Tax Refund
The education tax refund is now the ‘Schoolkids Bonus’, paid directly to families through a family payments system.
Starting in January 2013, these changes mean families don’t have to wait until tax time to claim the education tax refund. Eligible parents (currently receiving Family Tax Benefit A) will receive $410 for primary school students and $820 for secondary school students annually, split into two equal instalments paid in January and July each year.
The government recognises that families have already incurred bills for the current school year. Therefore they paid the full Education Tax Refund for 2011/2012 as a lump sum in June 2012. This means families receive their full entitlement ahead of time.
This also means that the Education Tax Refund section was removed from this year’s tax return – it is no longer necessary.