---
title: 2013-2014 Federal Budget
description: Summary of 2013/2014 Federal Budget affecting to SMEs and Individuals
---

[Quantum House Business News](https://blog.quantumhouse.com.au/information-centre/business-news)

# [2013-2014 Federal Budget](https://blog.quantumhouse.com.au/information-centre/business-news/20132014-federal-budget-highlight-affecting-to-smes-and-individuals)

 Written by [Ben Youn](https://blog.quantumhouse.com.au/information-centre/business-news/author/ben-youn) | 06/06/2013 6:13:40 AM

On 14 May 2013, the Federal Government released its 2013/2014 Budget. While many of the significant changes announced in the Budget focus on large companies and multi-nationals there were some changes affecting small to medium businesses and individual taxpayers. The key changes announced in the Budget are summarised below:

**Abolition of Net Medical Expenses Tax Offset** For most taxpayers, the net medical expenses tax offset (NMETO) will be abolished from 1 July 2013 and taxpayers will no longer be eligible to claim a 20% tax offset for net medical expenses. There will be a transitional period for taxpayers who claimed the NMETO for the 2012/2013 income year. They will continue to be eligible for the NMETO in the 2013/2014 income year provided they satisfy the existing rules. Similarly, those who claim the NMETO in 2013/2014 will continue to be eligible for the offset in 2014/2015. Taxpayers can still claim NMETO for medical expenses relating to disability aids, attendant care or aged care expenses until 30 June 2019.

**Medicare Levy increase** – As previously announced, the Medicare Levy will increase from 1.5% to 2% from 1 July 2014 to fund DisabilityCare Australia. This measure has passed Parliament and is awaiting Royal Assent.

**Cap on self education expenses** – As previously announced, deductions for work related self education expenses will be capped to a maximum annual deduction of $2,000 starting from 1 July 2014.

**Income tax cuts deferred** – The income tax cuts which would have increased the tax free threshold to $19,400 have been deferred.

**ATO funding to target trusts** – The ATO will receive more funding to target taxpayers who may be using trust structures to avoid or evade tax.

**Increased contributions cap for over 50s** – As previously announced, a higher contributions cap will apply to individuals over 60 from 1 July 2013 and to individuals over 50 from 1 July 2014. These increased caps will now apply to all individuals and not limited to individuals with super balances under $500,000.

**Tax exemption on earnings supporting income streams** – The Budget confirmed the income tax exemption for earnings supporting income streams will be capped to the first $100,000 from 1 July 2014. As a transitional measure, there will be special rates that will apply capital gains made from assets purchase before 1 July 2014.

**Baby bonus abolished** – From 1 March 2014, the Baby Bonus will be replaced by an increase to FTB Part A of $2,000.

[View full post](https://blog.quantumhouse.com.au/information-centre/business-news/20132014-federal-budget-highlight-affecting-to-smes-and-individuals)

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