The 2024/25 Federal Budget has been delivered by Treasurer Jim Chalmers. Here is a summary of the key announcements for individuals.
Tax cuts
The tax cuts that were announced prior to the Federal Budget will take effect from July 1. All taxpayers will receive a tax cut due to changes in marginal tax rates. The average cut per taxpayer is $36 per week (or $1,888).
You can read more about the tax cuts here, as well as how you can take advantage of them before June 30 here.
Energy rebates
All Australian households will receive a $300 energy rebate. This rebate will be applied quarterly and automatically credited to customer bills from July 1 (i.e., $75 per quarter). There is no need to formally apply for the rebate.
Superannuation guarantee on government-funded paid parental leave
From 1 July 2025, eligible recipients of government-funded paid parental leave will also receive the compulsory superannuation guarantee payment in their super fund. The super guarantee is scheduled to increase to 12% of ordinary time earnings on the same date.
An estimated 180,000 people will receive this super guarantee on top of their government-funded paid parental leave.
Changes to student debt indexing
The annual indexing of student loans on government-funded programs like the Higher Education Contribution Scheme (HECS) will now be capped to be the lower of the consumer price index (CPI) or the wage price index.
This change will be backdated to apply to all loans from 1 July 2023 onwards, which will reduce the student debt that more than 3 million Australians currently owe. Student debts were previously indexed to the CPI and it has been higher than the wage price index in recent years due to the Australian economy’s high inflation issues.
Freeze on social security deeming rates extended
The freeze on social security deeming rates for people on government payments like the Age Pension will be extended until 30 June 2025. The lower deeming rate will stay at 0.25%, while the upper rate will stay at 2.25%.
This freeze will allow people like those receiving the Age Pension to earn more money from their investments before their Age Pension entitlement is affected.
Cap on the cost of PBS prescription medicines
Prescribed medications on the Pharmaceutical Benefits Scheme (PBS) will be capped at $31.60 for the 2024/25 financial year. You can view the full list of PBS medications here.
In addition, the current $7.70 price cap on PBS medications for pensioners and concession card holders will be frozen for the next five years (i.e., until 30 June 2029).
Additional Home Care Packages
An additional 24,100 Home Care Packages will be made available in 2024/25 to enable eligible older Australians to continue living in their own homes for longer rather than being forced to move into nursing homes.
Important superannuation changes for the 2024/25 financial year
Although not part of this year’s Federal Budget, previously announced and important superannuation changes that are scheduled to begin for individuals on July 1, 2024, include:
- An increase to the compulsory super guarantee (from 11% to 11.5%).
- An increase to both the concessional and non-concessional super contribution caps.
You can read more about these superannuation changes here.
If you would like to discuss any of the information above further, please contact your accountant or advisor on 03 8419 9800.
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