There is a new Bill before the federal parliament that, if passed, will directly impact the pensions of some public servants in Canberra, writes chartered accountant GAIL FREEMAN.

THERE is evidence suggesting that many public servants who were posted overseas and were in receipt of rent-free housing were not paid their correct entitlements on retiring.

This is because the Commonwealth Super Regulations state that rent-free housing should be included in pension calculations, but it was not. The effect of the Bill is to repeal the Regulations retrospectively from July 1,1986.

While I understand some departments have begun paying the increased pensions, there is a case before the Federal Court in which a number of public servants have applied to obtain their entitlements.

Presumably, regardless of the outcome of the case, if the Bill is passed it will impact those public servants currently before the court. As you can imagine this is causing consternation among those affected.

Elsewhere, despite the change of federal government, it’s been quiet on the tax front. So this week I’ll update you with some other important changes.

There is some good news for retirees who are not eligible for Centrelink payments. A Bill has been introduced to widen the eligibility of the Commonwealth Seniors Health Card. If the Bill passes, from September 20 a single person with income of less than $90,000 and a couple with joint income of less than $144,000 will be eligible for the Commonwealth Seniors Health Card. There is no assets test for this card.

The government also introduced a Bill into parliament making a welcome change to claiming self-education expenses. Until June 30, the first $250 of self-education expenses couldn’t be claimed. From July 1, 2022 there will be no need to remove the first $250.

Self-education expenses are defined as a course of education provided by a school, college or other place of education. You cannot claim self-education expenses for a course that is covered by HECS-HELP, usually undergraduate courses.

A recent case before the Administrative Appeals Tribunal stated an army officer was not allowed a deduction for self-education expenses for a law degree. The rationale being that he did not use the degree in his work. Although it assisted him in getting a promotion, it was only one of the relevant factors.

Anyone claiming self-education expenses this year and future years, should ensure there is a sufficient connection between the course and their work.

There has also been a change to the age at which individuals can make a downsizer contribution. Once the Bill receives Royal Assent, people will be able to make downsizer contributions from age 55.

If you are an employer providing cars for your employees, there is some more good news on the Fringe Benefits Tax front. If you provide a zero or low-emissions vehicle that costs less than $84,916 (GST inclusive) after July 1 this year, the vehicle will be exempt
from FBT.

It must be a battery electric vehicle, a hydrogen fuel-cell electric vehicle or a plug-in hybrid vehicle. It does not include a petrol and battery hybrid vehicle. The FBT savings will be significant, so it’s definitely worth looking at suitable vehicles.

If you need advice on any tax matter listed above (or any other tax issue) contact the friendly team at Gail Freeman & Co Pty Ltd on 6295 2844.

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.
Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.