Australia’s new financial year, beginning on July 1, brings several significant changes that will impact the country’s workforce, families, and households.
These updates span across superannuation contributions, the minimum wage, parental leave, tax debts, Centrelink payments, and electricity bills. Below is an overview of what these changes mean for you.
Increase in Superannuation Contributions
The government’s push to increase superannuation contributions continues. As of July 1, your employer will be required to pay 12% of your salary into your superannuation fund, up from the current 11.5%.
This increase marks the final step in a series of gradual hikes that began in 2021, which saw a 0.5% increase every year.
For example, if you’re earning $100,000 annually, this extra $500 per year will go directly into your super account. Over the span of a 30-year career, this could potentially add over $47,000 to your retirement savings.
Additionally, the transfer balance cap (the amount of super you can transfer into the retirement phase) will rise from $1.9 million to $2 million.
However, the maximum super contribution base will decrease, from $65,070 to $62,500, which could affect higher-earning individuals.
National Minimum Wage Boosted to Nearly $25 per Hour
The Fair Work Commission recently announced a 3.5% increase in the national minimum wage, effective July 1.
Currently set at $24.10 per hour, the new rate will be $24.90, translating to $948 per 38-hour week or $49,296 annually. This wage increase aims to support workers amidst rising living costs.
Paid Parental Leave Extension
Starting July 1, Paid Parental Leave (PPL) will be extended to 24 weeks, up from the current 22 weeks. If your child is born after July 1, 2025, you’ll be eligible for the extended leave.
Another significant change is that superannuation contributions will now be paid on PPL. This means that parents receiving Paid Parental Leave will also see 12% of their payments directed to their superannuation account.
Tax Debts and Deductibility
A key change to be aware of from July 1 is the inability to claim deductions for interest on overdue tax debts.
The General Interest Charge (GIC) and Shortfall Interest Charge (SIC), applied to unpaid tax debts, will no longer be tax-deductible. This move is expected to generate an additional $500 million in tax revenue by 2026-2027.
Centrelink Payments and Threshold Adjustments
In line with regular indexation, several Centrelink payments will rise starting July 1, helping recipients keep up with inflation and the increasing cost of living. This includes increases in payments for:
- Family Tax Benefit A and B
- Multiple Birth Allowance
- Newborn Supplement
For approximately 2.4 million Australians, this increase will range between $4.48 and $48. In addition, income and asset thresholds will rise for those receiving the Age Pension, Disability Support Pension, and Carer Payment.
Electricity Bills Set to Rise
Energy prices are expected to rise in the new financial year, with major companies such as AGL announcing price hikes:
- 13.5% increase in NSW
- 7.8% increase in South Australia
- 7.5% increase in Queensland
- 6.8% increase in Victoria
For NSW residents, this could mean an additional $300 on their annual energy bill. However, the government will introduce a $150 energy rebate, distributed in two installments of $75 each over the next two quarters of 2025.
Medicare Levy Surcharge Threshold Increase
From July 1, the Medicare Levy Surcharge (MLC) thresholds will rise. This surcharge applies to individuals who earn above a certain income and do not have private health insurance. The new thresholds are:
- $101,000 for singles (up from $97,000)
- $202,000 for families (up from $194,000)
Those who fall into these income brackets and lack private hospital insurance will be subject to the surcharge.
The upcoming changes starting July 1, 2025, will have far-reaching effects on Australian workers, families, and residents.
From a boost in the minimum wage to an increase in superannuation contributions and changes to Centrelink benefits, these updates are designed to help Australians manage the rising cost of living and plan for the future.
However, electricity prices are expected to rise, adding to household expenses. Be prepared for these updates and adjust accordingly.
FAQs
When will the minimum wage increase take effect?
The national minimum wage will rise on July 1, 2025, to $24.90 per hour.
How much will my superannuation contributions increase?
The superannuation contribution rate will increase from 11.5% to 12% of your salary starting July 1, 2025.
Will Centrelink payments increase?
Yes, Centrelink payments for various benefits will increase by 2.4% starting July 1, to help recipients keep up with inflation.