As the end of the financial year approaches, several important policy changes are set to take effect on July 1, potentially impacting your finances. Here’s a detailed look at what’s changing and how it could affect your wallet.
Tax Cuts for Australians
Starting July 1, many Australians will notice a boost in their take-home pay due to new tax cuts. These tax brackets are now in place:
- Earn up to $18,200: no tax
- $18,201–$45,000: 16% tax rate
- $45,001–$135,000: 30% tax rate
- $135,001–$190,000: 37% tax rate
- Above $190,000: 45% tax rate
These tax cuts apply to income earned from July 1, meaning they won’t affect your current tax return but will impact future earnings.
Increase in Minimum Wage
More than 20% of Australian workers will benefit from a 3.75% increase in minimum and award wages. The national minimum wage will rise to $24.10 per hour. For a standard 38-hour work week, this translates to $913.91 weekly, an increase of around $33.
Adjustments to Social Services Payments
From July 1, several social services payments will increase due to the regular indexation to match inflation and changes in the Consumer Price Index. Key adjustments include:
- Family Tax Benefit A and B
- Newborn Supplement
- Multiple Birth Allowance
- Stillborn Baby Payment
- Essential Medical Equipment Payment
Additionally, there will be increases in income and asset thresholds for pensioners and a 10% boost in Rent Assistance payments.
Superannuation Contributions
Employers will increase superannuation contributions, with the minimum super guarantee rising to 11.5% of earnings. The concessional contributions cap will increase to $30,000, and the non-concessional contributions cap will rise to $120,000, allowing Australians to save more for retirement without additional tax burdens.
Energy Relief Credits
Australians will receive a $300 energy rebate as part of the federal budget’s measures to alleviate cost pressures. This rebate will be credited to power bills quarterly, providing $75 off each of the next four quarterly bills. This national rebate complements state-specific measures, such as Queensland’s $1,000 energy rebate.
Extension of Parental Leave
Parental Leave Pay will be extended from 20 weeks to 22 weeks for children born or entering care after July 1. As these payments are based on the national minimum wage, they will also see a slight increase due to the wage rise.
These financial changes are designed to provide relief and benefits across various segments of the Australian community, including families, workers, business owners, and retirees. Stay informed and take advantage of these updates to maximize your financial well-being.