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.