The new financial year is just around the corner, meaning new rules are on the way that could cost you.
The new financial year
A string of massive changes is approaching in concurrence with the new financial year. It kicks off on July 1, a critical mid-year milestone, bringing with it many significant changes such as new laws and regulations, fees, benefits, and taxes.
What you need to know before July 1, 2022…
Cash boost for 1.4 million families
Over 1.4 million Australian families will get a welcome increase in family payments from July 1 to ease the cost of living pressures.
Under the change, the Family Tax Benefit (Part A and B) Centrelink payments will rise, with households with a child under 13 years of age getting an increase to the Family Tax Benefit Part A by up to $204.40 over 2022-23.
For those with a child aged 13 and above, the payment will reach a maximum of $255.50, while those entitled to Family Tax Benefit Part B will see an increase of up to $164.25 per year for families with the youngest child under five.
Families on Family Tax Benefit Part B with a youngest child aged five to 18 will receive up to $116.80 per year.
Centrelink shake-up
A massive Centrelink overhaul is coming, meaning significant changes ahead for those on the JobSeeker program.
From July 1, recipients who are required to complete the process of mutual obligations to receive welfare payments will move to a points-based activation system (PBAS).
Those affected will have to receive 100 points and do a minimum of five job searches monthly to secure payment.
A list of over 30 tasks and activities each carries a points value. For example, attending a job interview is worth 20 points and completing a job application is worth five.
The PBAS replaces the current system, where job seekers must apply for 20 jobs per month.
Power costs to surge
Most Australian families will see their electricity costs rise next month after the energy industry watchdog jacked up prices by hundreds of dollars a year.
The Australian Energy Regulator (AER) will pass on sizeable increases to the benchmark power price, meaning bills will escalate by 18.3% in NSW, 12.6% in Queensland, and 9.5% in South Australia in July.
Comparison site Finder urged Aussies to shop energy providers before July 1 to avoid electricity bill shock.
There are two different types of energy plans on the market. Those offer fixed rates for a certain period (such as 12 months) or others with variable rates.
If you are averse to switching electricity plans often in search of the cheapest variable rates, you will likely benefit from a fixed-rate plan instead.
Super changes
From July 1, the percentage rate for the Super Guarantee will increase from 10% to 10.5%, which means employers will need to contribute extra cash to their employees’ super accounts.
As of July 1, the $450 monthly minimum wage threshold to qualify for employer Super Guarantee contributions will also be scrapped. Instead, all workers, excluding under-18s working less than 30 hours per week, must receive super payments, no matter how little they earn.
In the new financial year those aged 60 and over can deposit contributions up to $300,000 per person or $600,000 per couple into their super account using the “downsizer measure” as long as they are eligible.
Major governmental changes in the new financial year
In the wake of Labor’s election win, from July 1, a range of departmental and administrative changes will come into effect.
From that date, a new Department of Employment and Workplace Relations will deliver the government’s workplace relations, jobs, skills, and training plan.
Australia’s government will also create a new Department of Climate Change, Energy, the Environment and Water. In addition, the government will change the name of the Department of Health to the Department of Health and Aged Care. The Department of Infrastructure, Transport, Regional Development, and Communications will change to the Department of Infrastructure, Transport, Regional Development, Communications, and the Arts.
The Department of Finance will acquire responsibility for data policy, including the Digital Transformation Agency and deregulation. Also, the Department of Home Affairs will obtain responsibility for natural disaster response and mitigation, including the National Recovery and Resilience Agency.
Australia’s Attorney General’s portfolio will also procure criminal law enforcement and policy responsibility, including the Australian Federal Police.
Free medication
From July, the government will lower the PBS Safety Net threshold for concession card holders to $244.80.
Subsequently, concession card holders will receive their PBS medicines at no charge once they reach the lowered threshold.
Car prices jump in the new financial year
Adjustments to the Luxury Car Tax threshold mean that next month, the threshold for fuel-efficient vehicles will be increased by 6.% to $84,916.
For all other vehicles, it’s up by 3.9% to $71,849.
Childcare relief
So-called “combined families”, where both members of the couple get the Child Care Subsidy for different children in their family, will automatically be paid the higher subsidy from July.
The government will pay back any higher subsidy these families were eligible for between March 7 and July 2022.
Telstra customers squeezed
In July, Telstra’s mobile plan prices will increase in line with the Consumer Price Index.
That means the cost of primary and essential plans will rise by $3 per month, while premium plans will jump by $4.
However, the telco noted more hikes could be looming, stating that “plan pricing will include an annual review and may increase annually”.
Vogue Advisory Group – helping you start the new financial year the right way
If you require financial advice for the new financial year, please contact us, and one of our licensed financial advisors will assist you.
