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The budget shake-ups you should know before 1 July

5 min read
19 Jun 2019

With 1 July just around the corner, Aussies have mere weeks to get informed on upcoming changes that could impact their hip pockets.

The new financial year will bring a raft of shake-ups including new fees, laws and benefits that could see consumers claw back money in certain areas but pay more in others.

So, it’s crucial for consumers to not become complacent but rather proactive in understanding these changes.

Comparethemarket.com.au breaks down some of the important budget shake-ups that may impact Aussies come 1 July:

  1. Every year, eligible lower-income earners with private health insurance cover, who haven’t already claimed upfront through lower premiums, can claim their government private health insurance rebate as a tax offset through their tax return. The standard rebate for a family (under 65) earning under $180,000 a year is 25.05% of their private health insurance premium.[1] On the other hand, singles making over $90,000 annually and families on a combined income of $180,000, could be slugged with the Medicare Levy Surcharge as an additional 1-1.5% tax applied to your income if they have not held private hospital coverage for the taa year.[2]
  2. Winter is coming but energy customers could save an average of $171 in South Australia, $181 in NSW and $118 in south-east Queensland, when default market offers (DMOs) come into effect on 1 July.[3] A Victorian Default Offer (VDO) could also see consumers potentially saving from $310 to $450 annually[4]. These offers will put a price cap on what energy providers can charge for electricity to residential customers and small businesses previously on standing offers. On top of that, more than 3.9 million Aussies could receive one-off payments of $75 (for singles) and $125 (for couples) to help pay their energy bills, with the extra money deposited before 1 July.[5]
  3. From 1 July, new ‘Protecting Your Super’ laws will come into effect, when Aussies with multiple low-balance super accounts, otherwise known as “ghost” super accounts, with a balance of $6,000 or less, will have their fees capped at 3%. For those workers under 25 who have one of these accounts, they may stand to lose their default life insurance, unless they opt-in to keep their cover.[6] On the other end, retirees aged 65-74 with less than $300,000 in their next egg will get an extra year after retirement to make contributions without having to meet the work test requirements of being gainfully employed for at least 40 hours in a 30 day period.[7]
  4. University graduates will begin repaying their student debt earlier starting from 1 July, when the HELP repayment threshold will be lowered to $45,881 from $51,957. Students who fall into the minimum repayment threshold will have to pay back their debt at a rate of one percent a year.[8] Considering that a 2nd year assisting nurse/midwife in NSW could earn as little as $46,274 annually, that’s $462 a year in student loan repayments.[9]
  5. National Disability Insurance Scheme (NDIS) participants could benefit from better quality care with prices for some service providers increasing on 1 July, as part of the $850 million budget boost invested into the industry in 2019-20[10]. Therapists will get paid almost $11 per hour more, while price limits for physiotherapy services in NSW, QLD, VIC and the ACT will increase to $190/hr and $210/hr for psychology services[11]. Over a quarter of a million Australians with disabilities are expected to get access to more innovative support services[12].

Comparethemarket.com.au money expert Rod Attrill says: “Consumers need to keep their ear to the ground for any industry changes that could tighten their purse strings or provide relief in the next few months. Ignoring upcoming changes could cost you big in the long run.” Attrill said.

“These changes may impact Aussies directly or affect their families, that’s why before tax time, it’s important to compare financial products and plans to review and see if they are still providing you value or if there may be a better deal out there.”

“Lastly, don’t leave your tax planning until the last minute, a little preparation can go a long way to maximising your tax benefits.”

 

[1] Private Health- Australian Government Private Health Insurance Rebate (May 2019): https://www.privatehealth.gov.au/health_insurance/surcharges_incentives/insurance_rebate.htm

[2] Private Health- Medicare Levy Surcharge (June 2019): https://www.privatehealth.gov.au/health_insurance/surcharges_incentives/medicare_levy.htm

[3] Australian Energy Regulator- AER issues Default Market Offer decision (April 2019): https://www.aer.gov.au/news-release/aer-issues-default-market-offer-decision

[4] Electricity and gas retail markets review implementation 2018 (Victorian Default Offer) https://www.esc.vic.gov.au/electricity-and-gas/inquiries-studies-and-reviews/electricity-and-gas-retail-markets-review-implementation-2018/electricity-and-gas-retail-markets-review-implementation-2018-victorian-default-offer

[5] Australian Government Treasury- One-off energy payment to help 3.9 million Australians with their next energy bill (March 2019): http://jaf.ministers.treasury.gov.au/media-release/056-2019/

[6]   Australian Parliament of Australia- Treasury Laws Amendment (Protecting Your Superannuation Package) Bill  (October 2018): https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1819a/19bd032

[7] Q Super-The work test exemption for new retirees (April 2019): https://qsuper.qld.gov.au/news-hub/articles/2019/04/02/09/37/the-work-test-exemption-for-new-retirees

[8] Australian Government Department of Education and Training- Higher Education Loan Program (HELP) changes – Sustainability Act (August 2018): https://www.education.gov.au/higher-education-loan-program-help-changes-sustainability-act

[9] New South Wales Department of Health-Public Health System Nurses’ and Midwives’ (State) Award 2018: https://www.health.nsw.gov.au/careers/conditions/awards/nurses.pdf

[10] National Disability Insurance Scheme- A quarter of a million Australians now benefitting from NDIS (March 2019): https://www.ndis.gov.au/news/1241-quarter-million-australians-now-benefitting-ndis

[11] NDIS Pricing review of therapy services https://www.ndis.gov.au/providers/price-guides-and-information/pricing-review-therapy-services

[12] National Disability Insurance Scheme- A quarter of a million Australians now benefitting from NDIS (March 2019): https://www.ndis.gov.au/news/1241-quarter-million-australians-now-benefitting-ndis

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Written by Megan Birot

Megan considers herself a savvy saver. She aims to make finance fun and inspire people to make decisions best suited to their budget and lifestyle. Her number one tip is: “saving doesn’t have to be boring, get creative and reap the rewards.” Megan has a background in journalism and particularly loves to write about health and money. She hopes to one day pen a best-selling book but the topic is a well-guarded secret.

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