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Practice Compliance Guideline PCG 2023/1 sets out the ATO’s compliance approach to claiming a tax deduction for additional running expenses incurred while working from home. Tax payers who work from home have a choice between two methods – claiming actual expenses or alternatively using a fixed-rate method outlined in the PCG.

The fixed-rate method allows work from home taxpayers who meet certain criteria to claim a deduction at a fixed rate for each hour worked from home during the year to cover additional energy, internet, mobile and home phone expense and stationery and computer consumables.

The ATO has updated the PCG to set a new rate when using the fixed-rate method. From 1 July 2024 the fixed rate is 70 cents for each hour worked from home during the income year.  Previously it was 67 cents per hour.

Taxpayers can still choose to claim actual expenses instead of using the fixed rate method. 

The ATO reminded SMSF trustees to lodge their SMSF annual return for the 2023-24 financial year.   If they use a tax agent, they may have until 15 May 2025 to lodge the return,  this date can be confirmed by their tax agent.

The Government has registered a legislative instrument Social Security (Waiver of Debts – Legacy Product Conversions) Specification 2025  to provide social security debt relief for any debts that may arise due to people commuting legacy pensions under new rules that apply from 7 December 2024. However,  a disallowance period applies to this legislative instrument, meaning it doesn't officially commence until it is tabled and a further 15 sitting days pass of the next parliament. Due to the election process, the next Parliament is not expected to sit until July 2025 at the earliest.

Despite the uncertainties, it is FirstTech’s understanding that these debt-waiver provisions are intended to apply from the same time legacy pension commutations commenced on 7 December.  We await confirmation of this from Centrelink, as well as details of their administrative treatment of these rules prior to the commencement date.