Need to know: All the changes taking place 1 July
It's a new financial year, and a whole host of changes are set to kick in and impact your budget. Here's a rundown.
Energy
Regulators have increased the default market offer (DMO), so average energy prices will increase by as much as 18.3% in New South Wales, 12.6% in southeast Queensland, and 9.5% in South Australia.
This could raise the average annual energy bill by as much as $369 per year – review the average energy bill increase in your area.
Centrelink
More than 1.4 million Australian families will get an increase to family payments from 1 July.
- Family Tax Benefit (Part A and B) Centrelink payments will rise.
- Households with a child under the age of 13 will get an increase to FTB Part A by up to $204.40 over 2022–23. If the child is aged 13 and above, the payment will reach a maximum of $255.50.
- Those who are entitled to FTB Part B will see an increase of up to $164.25 per year, for families with a youngest child under 5.
- If your youngest child is aged 5 to 18, you'll receive up to $116.80 more per year.
In changes to childcare subsidies, "combined families" – which is where both members of the couple get the Child Care Subsidy for different children in their family – will automatically be paid the higher subsidy.
Finder money expert Sarah Megginson speaks to 7News about cost of living increases (and how to beat them)
Home loans
Technically, this change isn't happening on 1 July.
But on Tuesday 5 July, the Reserve Bank is due to meet, and economists are widely expecting them to increase the cash rate by another 0.5%. A further 0.5% increase is forecast in August.
A homeowner with an average $610,000 loan will see their monthly repayments increase by a massive $351 a month, equivalent to $4,214 a year if their rate were to increase by 100 basis points (e.g. from 2.5% to 3.5%).
Interest rates are rising as property prices fall, but as our home loans expert Richard Whitten explains, you may not be as screwed as you think.
Mobile phone plans
Telstra's mobile plans will be increasing by up to $4 a month in line with the Consumer Price Index, costing customers up to an extra $48 a year.
From August, Optus will also start charging customers to access Optus Sport, which has until now been free on all postpaid plans.
Eligible Optus customers will need to pay an extra $6.99 per month, or $83.88 per year, on top of their mobile plan. For everyone else, the price will be $24.99 per month or $199 per year.
Mobile plan price changes: Telstra customers to pay more, but as Finder's Dylan Crismale asks, is it worth it?
Tax time
Over 10 million Aussies are now eligible for a one-off $420 cost of living tax offset when you file your 2022 tax return. When combined with the low and middle income tax offset (LMITO), eligible Aussies will receive up to $1,500 for singles and $3,000 for a dual income household.
FY22 company tax for base rate entities will be reduced to 25% (currently 26%).
The easy $1,600 tax deduction many of us can claim this year.
Superannuation
Finally, some good news!
The Superannuation Guarantee increased from 10% to 10.5% on 1 July, so your retirement fund is set to get slightly healthier. The $450 monthly minimum wage threshold to qualify for employer contributions will also be scrapped.
Furthermore, from July those aged 60 who meet the ATO's downsizing eligibility criteria and over are able to make contributions of up to $300,000 per person ($600,000 per couple) into their super account.
Other changes:
- Minimum wage: Following a decision by the Fair Work Commission to raise wages by 5.2%, Australia's minimum wage has officially increased to $21.38 an hour. This equates to a $40 per week pay rise, from $772.60 to $812.60, for millions of Australians.
- Medication: The PBS Safety Net threshold will be lowered to $244.80 for concession card holders, which means they will receive their PBS medicines for free when they reach this lowered threshold. For general patients, the threshold is $1,457.10.
- Luxury car tax: The threshold for fuel-efficient vehicles has increased by 6.6% to $84,916. For all other vehicles it's up by 3.9% to $71,849.
- Student loans: These are indexed each year in line with CPI. This year's indexation is set at 3.9%, and will impact Higher Education Loan Program (HELP – formerly HECS), VET Student Loan (VSL) and other eligible student loan programs.
Finder is hosting a totally free online masterclass next week to break down everything that's happening this new financial year, and how it impacts you. Register here!
