Breaking down the 2023 Federal Budget: Insights for individuals

There are a number of tax and super measures announced in the 2023 Federal Budget that may affect you.

We have summarised the Budget updates below:

Medicare levy thresholds

If you’re single, the Medicare levy low-income threshold for 2022–23 is $24,276 ($23,365 for 2021–22).

For families, the threshold is $40,939 ($39,402 for 2021–22) and increases by $3,760 for each dependent child or student.

Seniors and pensioners eligible for the senior Australians and pensioners tax offset (SAPTO) have different thresholds: $38,365 for singles and $53,406 for families, with the same increase for dependents.

Lump sum in arrears – Medicare levy exemption

Starting from July 1, 2024, certain lump sum payments in arrears will be exempt from the Medicare levy.

This exemption benefits low-income taxpayers who receive lump sum payments, such as compensation for underpaid wages.

Tax measures

The income tax rates for the 2022–23 and 2023–24 income years remain unchanged.

The rates are as follows:

  • Up to $18,200: No tax
  • $18,201–$45,000: 19%
  • $45,001–$120,000: 32.5%
  • $120,001–$180,000: 37%
  • $180,001 and over: 45%

Stage 3 tax cuts will be implemented from 2024–25, simplifying the rates.

The Low and Middle Income Tax Offset was not extended by the Government. This means individuals who received up to $1,500 in extra tax refunds last year will not receive them again in 2023.


Increased tax on super earnings: The Budget confirmed the Government’s intention to apply an additional 15% tax on total superannuation balances above $3 million from 1 July 2025. If your super member balance is less than $3 million, then this won’t affect you. If it is more than $3 million from 1 July 2025, then your super will be taxed 30% on its earnings, up from the current rate of 15%.


Income support payment base rates will be increased by $40 per fortnight from 20 September 2023.

Expanded eligibility for JobSeeker

The minimum age for which older people qualify for the higher JobSeeker payment rate will be reduced from 60 to 55 years.

Energy price relief

The $1.5 Billion Energy Bill Relief Fund will deliver $500 rebates to 5 million low-income households.

Single parent payment increase

An estimated 57,000 single parents will also be able to claim the Single Parent welfare payment benefit from September 2023, with the Government lifting the eligibility age for the youngest child in a family from 8 to 14 years.

PAYG instalment uplift

If you pay PAYG instalments towards next year’s tax, the Government bases these payments on last year’s tax increased by GDP “uplift”. The Government was happy to announce this GDP uplift for 2024 is only 6% and not the legislated 12%. You may need to plan for higher PAYG instalment payments in 2024.

New deductible donations

The Government has announced additional organizations eligible to receive tax-deductible donations for specified periods.

Examples include The Voice No Case Committee, Justice Reform Initiative Limited, Susan McKinnon Charitable Foundation Ltd, Transparency International Australia, and more.

Taxpayers can claim an income tax deduction for donations of $2 or more to eligible DGRs.

Speak with our KMT advisers if you need assistance with your tax and superannuation.

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances and get professional advice from a qualified accountant at KMT Partners.