Mature Age Worker Tax Offset gone from July 2014

The Mature Age Worker Tax Offset will be abolished from 1 July 2014, saving the federal government $700 million over 4 years. The MAWTO was first introduced in 2004, to encourage older workers to stay in the workforce.

Ah well, the government is seeking Australians to work longer but at the same time taking away the incentives that encourage older workers to remain in the workforce. Note that the ALP first cut back the number of people eligible for the MAWTO. Since 1 July 2012, the MAWTO has been phased out for individuals born on or after 1 July 1957. The Liberals have simply cast the final blow. From 1 July 2014, the MAWTO will be abolished for everyone.

The maximum MAWTO available is $500, and the ATO automatically calculates this offset based on the information contained in an individual’s tax return. Note that this maximum offset has not been increased since it was introduced in July 2004.

According to the ATO, you must meet ALL of the conditions listed below to be eligible for the MAWTO:

  • be an Australian resident for tax purposes
  • be born before 1 July 1957
  • have received ‘net income from working’ below the upper income threshold ($63,000).

You receive the full $500 offset if your ‘net income from working’ is below $53,000 and more than $10,000.

Note: The offset reduces by 5 cents for every dollar of income above $53,000.

Since the start of the 2009/2010 year, ‘net income from working’ includes reportable employer super contributions (such as salary sacrificed contributions but not Superannuation Guarantee contributions).

According to the ATO website, a person’s ‘net income from working’ includes:

  • salary or wages
  • allowances, earnings, tips and directors fees
  • business and attributed personal services income
  • regular periodic payments from worker’s compensation or sickness or accident insurance
  • net foreign employment income
  • net amount of farm management deposits and withdrawals
  • total reportable fringe benefits amounts
  • reportable employer super contributions.

You need to confirm your eligibility for the MAWTO with the ATO. You can find more information about the MAWTO by clicking on this link.

© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. june sproat says:

    hi Trish ,
    Can you please tell me if I put in the max allowed of$15000 this tax yr as I am 72 yrs old and still working 32 hrs a week if I for some unforseen reason I wanted to draw e,g a $100,ooo for round the world trip what are the tax implications? also is there a max that I am allowed to draw out ? in one yr?Thank you

    • Hi
      Thanks for your comment. If an individual is under the age of 75, but over 65 then they can make up to $150,000 in non-concessional contributions for the 2014/2015 year, subject to meeting a work test (40 hours work in a 30-day period). An individual over the age of 65 can generally access super benefits at any time, and withdrawal of such benefits will be tax-free (except for some members of public service super funds_. For your personal circumstances, I suggest you confirm your position with your accountant.
      Regards
      Trish

  2. Michael Rapson says:

    It’s penny wise and pound foolish. The disencentive to work longer will result in lower tax revenue from employment for the government and will easily extinguish the 700 million in savings. Moreover, it illustrates how little comprehension of the labour market the major parties have. I don’t even know who the employment minister is, if there even is one in the Abbottoir.
    They’re also closing down a host of regional tax offices so mature workers who don’t like using the internet will be further in the dark over tax offsets. Well, they say that a fish rots from its head down, so we could be in murky waters from now on.

  3. Greg Blake says:

    I am wondering if I can claim any tax or other entitlements as I am 67, working full time, still paying a morgage, own every thing else but live on acres.
    Center Link advise that I must sell every thing over 5 acres. I cannot subdivide as I have 89 acres less than the required 100 acres minimum for subdiivision. We do not want to sell as this is our home.

    • Hi Greg
      Thanks for your email. Unfortunately, your question is outside the scope of our website. I suggest you chat to an officer of Centrelink’s FInancial Information Service, or visit an accountant that is familiar with rural issues and Centrelink issues – most country accountants would be dealing with these issues regularly.
      Sorry I couldn’t assist.
      Regards
      Trish

  4. Craig Kelly says:

    Hi,
    You said
    ‘From the start of the 2009/2010 year, ‘net income from working’ includes reportable employer super contributions (such as Superannuation Guarantee and salary sacrificed contributions).’

    I was under the understanding that reportable employer super contribution excluded the 9% SG.

    could you confirm.

    With Thanks,

    Craig Kelly

Leave a Comment

*

Loading...

60 second poll - What is important when choosing a financial adviser? Take part