The 2021 Federal Budget was announced on Tuesday night.

Our team have analysed the detail to identify what issues may impact our clients. The following is a summary of the key issues.

Over the next month and as the legislation is adopted, we will provide further detail.


Self-Education Expense Deductions

The first $250 of expenses relating to prescribed course education is currently not deductible. This is due to change in an effort to reduce compliance costs for individuals claiming self-education expenses. The change will come into effect following the date of assent of the relevant legislation.

Tax Residency Rules

The Government has announced a new framework for determining individual tax residency following a recommendation by the Board of Taxation. The new ‘bright line test’ is simply that a person who is physically present in Australia for 183 days or more in an income year, will be an Australian tax resident.

The new framework will apply from the first financial year after legislation receives Royal Assent.

Maximum Releasable Amount Under First Home Super Saver Scheme (FHSSS) Increased

The FHSSS scheme allows first home buyers to access some of their superannuation to put towards a deposit for their new home. Currently the maximum amount of contributions that can be released from superannuation is $30,000 and the proposal is to increase it to $50,000.

This increase will apply from the start of the first financial year after Royal Assent, expected to occur by 1 July 2022.


Extension to The Temporary Full Expensing Measures i.e. ‘instant asset write off’

The budget announcement included a 12-month extension to the temporary full expensing measures until 30 June 2023. This allows eligible businesses with aggregated turnover or income less than $5 billion are entitled to a deduction for eligible depreciating assets acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.

Extension to The Temporary Loss Carry-Back

The temporary loss carry-back offset will be extended by one year, allowing eligible companies with aggregated turnover of $5 billion or less to offset tax losses in the 2022-23 income year against profits made in or after the 2018–19 income year.

Expanding the Boosting Apprenticeship Commencements (BAC) Wage Subsidy

The BAC wage subsidy will be expanded by:

  • uncapping the number of eligible places  (currently capped at 100,000 places); and
  • increasing the duration of the subsidy to 12 months from the date an apprentice or trainee commences with their employer.

The subsidy will now be available from 5 October 2020 to 31 March 2022 and eligible businesses of any size will be reimbursed up to 50% of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.

Increasing Wage Subsidies Available Through jobactive, Transition to Work and ParentsNext

As part of the 2021–22 Federal Budget, the Government announced it was increasing current wage subsidies available through jobactive, Transition to Work and ParentsNext to all businesses to $10,000 from 1 July 2021. This includes subsidies for young people, parents and the long-term unemployed.

2021 Storms and Floods – Tax Treatment of Qualifying Grants

The Government has announced that income tax exemption will be provided for qualifying grants made to primary producers and small businesses affected by the storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021 will be non-assessable non-exempt income for tax purposes.

These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000.


SG still to increase from 9.5% to 10%

The super guarantee rate will still change from 9.5% to 10% on 1 July 2021, and then gradually increase to 12% by 2025.

Removing the SG threshold

Under the current rules, employees earning less than $450 a month are not required to be paid the superannuation guarantee by their employer.

The Government is proposing to remove the $450 per month minimum income threshold which determines whether employees have to be paid the superannuation guarantee by their employer.

This measure will take effect from the first financial year after the proposed legislation receives Royal Assent. The government expects to have removed this exemption category before 1 July 2022.

Repealing the Work Test

Currently individuals aged 67-74 years are restricted from making certain contributions unless they are working at least 40 hours in a 30-day consecutive period. From 1 July 2022, this work test will be removed. The measure will allow individuals to make non-concessional superannuation contributions and receive salary sacrifice contributions, even if they are not working.

Individuals in this age bracket wishing to make personal tax-deductible contributions will still have to satisfy the work test.

Extending the Bring Forward Age to 74

From 1 July 2022, under the bring forward rule, eligible individuals are able to make up to 3 years’ worth of non-concessional contributions to superannuation in a single year without having to pay extra tax (subject to amount of funds in superannuation).

The Government proposes to allow anyone (no work test required) to use the bring forward rules right up until 74 if they meet the usual eligibility criteria.

Lowering the Eligible Age for Downsizer Contributions

Introduced to allow anyone who meets the eligibility criteria to make a “downsizer” contribution – a one-off, post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home, provided that the home has been held for at least 10 years.

From 1 July 2022, the Government is proposing to reduce the eligibility age for making a downsizer contribution from 65 to 60 years of age.

Introducing a No Negative Equity Guarantee for Pension Loans Scheme (PLS)

From 1 July 2022, the Government plans to introduce a ‘No Negative Equity Guarantee’ for PLS loans to bring them in line with private sector reverse mortgages. This new measure will:

  • allow participants in the scheme to access up to 2 lump sum advances in any 12-month period, up to a total value of 50% of the maximum annual rate of the age pension
  • borrowers will not have to repay more than the market value of their property.

Relaxing Residency Requirements for Self-Managed Superannuation Funds (SMSFs)

The Government has announced that it will ease the residency tests for SMSFs by:

    • Abolishing the active member test from 1 July 2022
    • extending the central management and control test safe harbour from 2 to 5 years from 1 July 2022.

The Government announced in the budget that it expects the enactment of legislation to be prior to 1 July 2022.

If you would like to find out further information regarding any of these issues, please do not hesitate to give our office a call.

– Ian Hogbin & James Davis

Posted 13.05.2021

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.

What Our Clients Say

Outstanding service, sorted out my complicated setup and gave me peace of mind.I had great experience with HQB, no problems at all.Thank you
07:22 21 Apr 22
Great service! Came recommended through a friend! Would definitely recommend.
steve hanley
steve hanley
23:20 16 Mar 22
I was referred to James & the HQB team around 2016. James has been fantastic - always available when advice is sought, explains options clearly and moves quickly when I request documents in most unreasonable timeframes. It's also comforting dealing with someone who has local knowledge is very much part of the community. I have no hesitation recommending him and the team!
06:49 07 Feb 22
I have been with HQB since ACSM was long ago i cannot remember. Their service has always been good and this has been elevated to excellent since James Davis took over my account. He is super sharp, good at listening and prompt in response to enquiries. I recommend HQB.
Paula Fursman
Paula Fursman
22:54 01 Feb 22
I met James Davis from HQB about 6 - 7 years ago when we were looking for an accountant that would suit our needs better and provide the advice that would steer us into the future.At the time I sat in front of James and fired so many questions, scenarios, future plans etc and James did not bat an eyelid. There was no let me get back to you on that one, or good questions I will check the current legislation, it was a variety of questions that led to us setting up a structure that has allowed us to grow with absolute confidence we are structured appropriately.This relationship has grown from strength to strength and i would have no hesitate to refer anyone to HQB as I am confident they will have the exact same experience and get the advice they need when they need it.Thanks for the amazing service guys and quality advice.
Daniel McCarthy
Daniel McCarthy
03:12 31 Jan 22
I found the team relaxed but very professional. All work was conducted in a correct and timely manner. Communications from Brad and this team are of a high standard and they follow up.You get great prompt service at what seem to be standard industry charges
Darryl Tebbutt
Darryl Tebbutt
05:58 07 Jan 22
HQB accountants are the best. They have pointed things out to me that my previous accountant didn't. They got me set up and straightened out all my accounts to ensure I was complying with with regulators. I now know my accounts are in good order. Would recommend to those who like to sleep at night knowing someone has got your back!
Paula Berti-Duncan
Paula Berti-Duncan
00:53 29 Nov 21
James Davis and the team are great to work with.We are very happy with the service and value.THANK YOU
Philip Wilson
Philip Wilson
02:57 23 Nov 21
As a business owner, I love using HQB for my accounting maters. It makes life much easier. They are professional and supportive, allowing me to focus on the business.
Adrian Betts
Adrian Betts
21:30 18 Nov 21
HQB are the best accountants I have worked with in more than thirty years of business. We transitioned from a small one person accountant to a large accountancy firm, where we got lost amongst the bigger businesses with deeper pockets and louder voices, and charged like there was no tomorrow. HQB is the perfect middle ground where we get excellent and up-t0-date advice but treated and cared for as an SME with growth potential. The personal service is amazing. The advice we get even better. VERY HIGHLY RECOMMEND!
Sales Rider
Sales Rider
23:57 15 Nov 21
Have been dealing with James and his team for the past few years.Always a quick response with a helpful answer.You definitely have my YES vote in business.Thanks for the assistance
Robert Brunnekreef
Robert Brunnekreef
09:19 15 Nov 21
HQB is an excellent accounting firm, we have worked together for over 20 years now. I cannot recommend them more highly and James Davis offers a very personal and professional service, second to none. Great communicators and are always available promptly with support and advise.
Dan Maher
Dan Maher
01:05 15 Nov 21
Have been working with James from HQB for the last couple of years - and only have good things to say. Very responsive, offers support where needed and hangs back in other areas that we can manage ourselves. Best accountant we have worked with - makes it a breeze, which is what you want when working on the paperwork.
Kevin Doye
Kevin Doye
00:42 15 Nov 21
Great service, nice and easy to deal with, fast on jobs. 5-star business for sure!
Felix Wong
Felix Wong
00:39 15 Nov 21
James and the team at HQB are always helpful in what has been a very busy approx 2 years in Covid conds, well done!!
Richard Welch
Richard Welch
23:47 14 Nov 21
Ian and his team are the best. Thanks HQB.
todd armstrong
todd armstrong
05:07 08 Nov 21
I'm really enjoying the personalised touch and service I'm receiving from Ian and Siarn. Always prompt, professional and happy to answer my silly questions and help me stay informed. I've been a client of Bill's and HQB for about 20 years. Since Bills retirement he passed me on to Ian and the quality of the service just seems to keep getting better. HQB comes highly recommended by me.
Trent Allen
Trent Allen
03:43 25 Jun 20
We highly recommend the team at HQB. We are a Sydney based business, and we find the team highly professional, responsive, and just a pleasure to deal with. They are very proactive and we feel as though we are a valued client. Well done to Brad Sheaves and team HQB !
Alastair Fysh
Alastair Fysh
04:31 25 May 20
HQB accountants have been an asset to our business. They have made Job Keeper a breeze and kept our business strong. They respond to emails quickly. They have been terrific value for us as they have brought knowledge and expertise that I don't have even if I had the time to do my accounting. They have taken the time to understand my business and structure our finances accordingly.
Kyle Maloney
Kyle Maloney
06:19 22 May 20
Amazing service from James (& Brianna), going well above his responsibilities to his clients. Cannot recommend James highly enough. HQB a highly professional and responsive accounting firm. Incredibly quick at responding, yes, often after hours, which is more than we would ever expect from any professional. I am continually recommending James to friends and family. Many thanks James. Kind regards, Lyn (& Jeff) Green
Jeff Green
Jeff Green
01:02 17 May 20
James became our Accountant last year and he has handled all our entities swiftly and pro actively. We are incredibly impressed with him and HQB and feel very comfortable in their hands to manage our Business. James is always prompt in replying and sometimes out of hours and his handling of our recent predicament with COVID 19 has helped us manage our Business successfully through this trying time. Thank you James and the team at HQB. We will always recommend you highly,.
Pandora Colledge
Pandora Colledge
01:36 15 May 20

Get In Touch

Call us on (02) 6652 2333 or enquire below

    Your Name (required)

    Your Email (required)


    Your Message


    Days left until the new financial year. Get your tax sorted today. Click here to get started.