Cant believe we stayed awake to listen to the budget!
Good news though for Family Day Care owners is that GST is not being levied on child care fees!
So what has changed?
A summary of the good, the bad and the ugly of what we think is relevant for Family Day Care in the 2016-2017 Budget:
- The Jobs for Families Package implementation has been delayed by a year to 1 July 2018, as this was dependent on the passing of family tax reforms. This delay allows more time for consultation however the Jobs for Families Package also results in additional funding relief of $1.1billion being lost.
- The Child Care Rebate will be indexed from 1 July 2017, the first time since 2011, providing some relief for families. The Child Care Benefit is already indexed against the Consumer Price Index and updated on 1 July every year.
- The Nanny Pilot program has been extended to 30 June 2018 to provide assistance to more families who are having difficulty in accessing mainstream child care and allowing time to refine the programme based on experience.
- If you operate your Family Day Care business as a company – there is a decrease in tax rate for companies from 28.5% to 27.5%. This has been extended to companies with a turnover of more than $2 million but less then $10 million.
- As an individual Family Day Care Owner or Sole Proprietor the tax discount has been increased to 8 per cent for unincorporated businesses with annual turnover less than $5 million, but this is still capped at $1,000. The 32,5% taxable income band upper limit has also increased from $80,000 to $87,000.
- No change to the depreciation rates. The $20,000 instant asset write off remains.
- Some opportunities exist in terms of the Youth Plan Path- you can assist a job seeker (youth) with a 4-12 week internship in your Family Day Care and receive $1,000 to host them.
- The superannuation concessional cap reduces from $35,000 to $25,000 and from 1 July 2018, the Low Income Superannuation Tax Offset will replace the Low Income Superannuation Contribution. This will continue to support the accumulation of superannuation for low income earners.
Some bad news if you are still studying …
The budget was silent on the withdrawal and cessation of all funding for professional development in early childhood education and care. Some prior announcements (made in 2014) will take effect from 1 July 2016 with professional support funding and vocational training fee assistance programs coming to an end.
What can you do to prepare for your 2016 Family Day Care Tax Return?
We suggest; “Focus on utilising the small business concessions that are available, maximise your family day care tax deductions, contribute to your superannuation fund and join the debate on the Jobs for Families Package!