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Technical update: 2023 Budget changes, CPI and AWOTE (Voss v2)
22 April 2022
Release overview
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2023 Budget changes
The 2023 Budget announcement on 30 March 2022 proposed several legislative changes impacting Pathfinder that have now been passed and received Royal assent. Listed below are the relevant changes which have been implemented into the Pathfinder model.
Extension of the minimum pension drawdown rate reductions
The halving of the minimum pension payment for account-based pensions will be extended to 2022/23, then return to normal in 2023/24, as announced by the Governor-General on 31 March 2022 in the Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022.
Increase to LAMITO
The low and middle income tax offset has been increased by $420 for 2021/22 onwards (until it is due to expire in 2022/23), as per Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022: Chapter 6.
This means that the base amount is now $675, with the full amount being $1500. Previously, the base amount was $255 while the full amount was $1080.
Increase to Medicare levy thresholds
The Medicare levy low-income thresholds for singles, families and seniors and pensioners have been indexed by CPI for 2021/22, in accordance with Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022: Chapter 1.
Pathfinder will automatically index future years' thresholds by our projected CPI figures.
Medicare thresholds for 2022 onwards | ||
Item | Current value | New value |
Individual income threshold $ | 23,226 | 23,365 |
Individual phase-in limit $ | 29,032 | 29,206 |
Individual income threshold $ (if eligible for senior Australian offset) | 36,705 | 36,925 |
Individual phase-in limit $ (if eligible for senior Australian offset) | 45,881 | 46,156 |
Family income threshold $ | 39,167 | 39,402 |
Family phase-in limit $ | 48,958 | 49,253 |
Family income threshold $ (if eligible for senior Australian offset) | 51,094 | 51,401 |
Family phase-in limit $ (if eligible for senior Australian offset) | 63,867 | 64,251 |
Income threshold increase by $/dependent | 3,597 | 3,619 |
Phase-in limit increase by $/dependent | 4,496 | 4,524 |
CPI and AWOTE
Our assumptions for the future values of CPI and AWOTE have been updated, based on the projections of the RBA and Treasury.
Item | Current value | New value |
|---|---|---|
CPI | 2022 onwards: 2.5 | 2022: 4 2023: 3 2026 onwards: 2.5 |
AWOTE | 2022 onwards: 3.0 | 2022: 2.75 2023 and 2024: 3.25 2025 onwards: 3.5 |
Note that users' custom organisation assumptions from 2022 onwards will continue to apply, and are not affected by this change.
Notes for existing users
Please refresh your results for active cases
If you have any existing cases in progress, please refresh your results by clicking the Start Solve button for any scenarios where you created results on or before the release date of 22 April 2022. This will ensure that all your scenarios are consistent. Note that the numbers in your results may change when you re-solve, but it is better to be consistent across scenarios. If you are unsure when your results were created, see How to check when your results were created.
For the updated assumptions, any cases you started before the release date will continue with the previous assumptions. Any cases you create after the release date will have the new assumptions.