The new financial year has officially begun, bringing with it a plethora of changes for Australians. As of July 1, new rules have come into effect that will impact nearly everyone, from individuals | / Australian Taxation Office individual taxpayers to families, and retirees.
Among these changes are significant one-time adjustments, such as the stage 3 tax cuts and a $300 energy bill relief. Additionally, there are annual updates, such as Centrelink’s regular indexation of payments.
In the following overview, we will delve into the major changes and explore how they may impact your financial situation.
Tax
All Australians will experience a change in their weekly pay as the stage 3 tax cuts, which were the focal point of the government’s federal budget, come into effect.
The changes will include:
– Reducing the 19% tax rate to 16% for incomes between $18,200 and $45,000
– Lowering the 32.5% tax rate to 30% for incomes between $45,000 and $135,000
– Maintaining the 37% tax rate but raising the threshold from $120,000 to $135,000
– Keeping the 45% tax rate but increasing the threshold from $180,000 to $190,000
You do not need to take any action to receive the tax cut. Employers will automatically adjust the amount of tax deducted from your pay.
Centrelink
Recipients of family payments, such as the Family Tax Benefit, Newborn Supplement, and Multiple Birth Allowance, can expect to receive higher payments due to regular indexation.
Those receiving the Age Pensioners, Disability Support Pension, and Carer Payment will also benefit from increases in their income and asset thresholds. This means they will be able to earn more income and hold more assets before their payments are impacted.
Additionally, deeming thresholds will be adjusted to account for inflation. Deeming rates will remain unchanged for another year, with a lower bracket of 0.25 percent and a higher bracket of 2.25 percent.
Furthermore, individuals receiving Rent Assistance payments will see a 10 percent increase in their payments.
Wages
The Fair Work Commission has decided to increase the minimum wage and award wages by 3.75 percent. This change will affect approximately 2.6 million workers across the country.
As a result of this decision, the minimum wage will rise to $24.10 per hour or $915.90 per week for those working a standard 38-hour week. This adjustment aims to provide fair compensation for workers and ensure they can meet their basic needs.
Superannuation
The super guaranteed rate is set to increase from 11 percent to 11.5 percent, meaning that your employer will be contributing a higher percentage of your pay towards your retirement savings.
It is estimated that the average Australian will receive an additional $340 in their superannuation fund each year.
Furthermore, the general concessional contributions cap will be raised from $27,500 to $30,000 for all individuals. This cap represents the maximum amount of before-tax contributions that can be made to your superannuation fund annually without incurring additional taxes.
Additionally, the non-concessional contributions cap, which is the maximum amount of after-tax contributions that can be made without facing extra taxes, will increase from $110,000 to $120,000.
Electricity rebates
Starting July 1, households will receive a $300 energy rebate automatically applied to their bills.
Additionally, the Australian Energy Regulator has announced upcoming changes to power prices. Most households and small businesses on standard retail plans can expect to see price reductions.
Depending on their region, households may experience power price changes / Essential Services Commission ranging from 1 to 6 percent. In Victoria, residential customers will see an average reduction of 6 percent.
Parental leave pay
The parental leave pay / Services Australia program is set to be extended to 22 weeks, an increase from the current 20 weeks. Payments will be made at the national minimum wage rate. The duration of leave that parents can claim will gradually increase by two weeks until it reaches a total of 26 weeks by July 2026.
It is important to note that this extended leave period will be shared between both parents. Currently, two weeks of leave are specifically allocated for the second parent who is not utilizing most of the leave.
Furthermore, income limits for receiving paid parental leave will also be adjusted to account for inflation through indexation.
Medicare
The thresholds for the medicate levy surcharge / Australian Taxation Office are set to increase, imposing a penalty on individuals who earn above a certain amount and do not possess private health insurance. The surcharge can amount to up to 1.5% of your income.
As of now, singles earning over $97,000 and families earning above $194,000 without health insurance will be required to pay the surcharge. These thresholds have been raised from $93,000 and $186,000, respectively.
Health Insurance
The thresholds for the private health insurance rebate are set to increase, offering potential savings of up to $770. This rebate, provided by the government, aims to assist in covering the costs of health insurance premiums.
Individuals earning up to $97,000 and families earning up to $194,000 will now qualify for the highest rebate of 24.608 percent, an increase from the previous thresholds of $93,000 and $186,000.
As income levels rise, the rebate percentage decreases. Individuals can now earn up to $151,000 and families up to $302,000 while still being eligible for a rebate, up from the previous thresholds of $144,000 and $288,000.
Passports
Australian travelers will now have additional opportunities to fast-track. As revealed in the budget, Australians will have the option to pay $100 to have their application processed within five business days. This new expedited service complements the existing $252 fast-track option, which guarantees processing within two days.
Furthermore, there will be an increase in passport prices, with the fee for a 10-year passport rising from $346 to $397.90. This price adjustment represents an approximate $50 increase.
NBN price changes
Today, NBN prices are increasing due to wholesale price hikes ranging from $2.22 to $2.52 per month. The specific increase will vary depending on your service provider, with companies such as Telstra, Optus, Aussie Broadband, Dodo, Superloop, iPrimus, and Exetel adjusting their plans.
For instance, Telstra is raising the cost of its NBN 25 plan by $4 per month and its NBN 50 plan by $5 per month. Surprisingly, the price of its NBN 250 plan is decreasing by $5 per month, while the NBN 1000 plan is decreasing by $20 per month.