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Explainer
Cash boosts, wages, superannuation and power costs: How you might be impacted on 1 July
New laws and changes are set to come into effect on 1 July - including new policies for childcare, power bills and tax offsets - which will impact millions of Australians.
Published 27 June 2022 4:44pm
By Emma Kellaway
Source: SBS News
Image: The start of the financial year means a number of changes.
Key Points
- The end of the financial year is looming, which means a raft of changes is on the way on 1 July, including a minimum wage increase, a $450 cost of living tax offset and more.
- From 1 July, more than 10 million Australians will receive a one-off $420 cost of living tax offset.
The end of the financial year is looming, which means a raft of changes is on the way on 1 July, including a minimum wage increase, a $450 cost of living tax offset and more. Here’s how you might be impacted in the new financial year.
Minimum wage to rise
Australia's 2.7 million low-income workers around the country will receive a pay rise. The Fair Work Commission ruled on 15 June that the national minimum wage will increase by 5.2 per cent, as rising inflation puts pressure on people's home budgets.
The new wage will be $21.38 per hour up from $20.33 per hour, amounting to a weekly pay increase of $40 per week based on a 38-hour week for a full-time employee.
Cost of living tax offset
From 1 July, more than 10 million Australians will receive a one-off $420 cost of living tax offset.
The offset is a reduction to an individual's taxable pay, and will be added to the existing low and middle income tax offset.
This takes the base amount from between $255 and $1,080 to between $675 and $1,500 for those who earned a taxable income of less than $126,000 in the 2021-22 financial year.
Childcare subsidy increase
Families with more than one child aged five years or younger will receive a higher rate of the Child Care Subsidy (CSS) for their second and subsequent children.
For most families, the higher rate started in March, but so-called “combined families” - where both members of the couple get the CSS for different children - won’t receive the rate increase until early July.
Families who were eligible for a higher rate between 7 March and July 2022 will be back paid.
Changes to super
Changes to who is eligible for super will see the $450 per month eligibility threshold scrapped, meaning employers will be eligible to pay the super guarantee rate regardless of how much workers earn.
The super guarantee rate will also increase from 10 per cent to 10.5 per cent, meaning employers will need to use the new rate to calculate super payments for all pay periods on or after 1 July, even for work done before that date.
From 1 July if you are aged 60 or older, you may be eligible to make a downsizer contribution - from the proceeds of the sale (or part sale) of your home - of up to $300,000 to a complying superannuation fund.
Previously, you had to be 65 years or older to make the downsizer contribution.
The current work test used before any super contributions are accepted will be abolished for people aged between 67 and 74 years old.
The current work test requires people to be employed for at least 40 hours in a consecutive 30-day period before any super contributions are accepted.
A surge in power costs
Households across Australia will be hit by higher power bills come July after the Australian Energy Regulator (AER) announced in May it would be raising the maximum amount retailers can charge households and businesses on default offers in some states.
As a response to significant rises in wholesale electricity costs over the past year, the regulator will increase default market offer (DMO) price caps by more than $220 per year in NSW, more than $160 in Queensland, and more than $120 in South Australia.
Changes for businesses
Award changes for workers in the social, community, home care and disability services industries will see a change in the minimum number of hours for which an employee must be paid.
For casual home care workers, the minimum payment hours will increase from one to two hours, and three hours for part-time workers except for when they are doing disability services work.
The high-income threshold for unfair dismissal will increase on 1 July to $162,000, up from $158,000, according to The Fair Work Commission.
The maximum amount of compensation that can be ordered by the Fair Work Commission in an unfair dismissal case will also increase to $81,000 for dismissals occurring on or after 1 July - an increase of $2,000 from the previous year.
The high-income threshold for unfair dismissal will increase on 2 July to $162,000, up from $158,000. Source: Moment RF / Traceydee Photography/Getty Images
JobSeeker overhaul
Those on the JobSeeker Program who currently need to apply for 20 jobs every month to receive payment will be moved onto a points-based activation system (PBAS).
Those impacted will have to receive 100 points and do a minimum of five job searches per month to receive payment. The list of over 30 tasks and activities each carries their own points value. Attending a job interview is worth 20 points and completing a job application is worth five points.
Jobseekers who currently need to apply for 20 jobs a month to receive their Centrelink payment will be moved to a points system from 1 July. Credit: Quinn Rooney/Getty Images
Major governmental changes
Following the swearing-in of the new Labor government ministry in May, a string of departmental and administrative changes will take effect at the start of the financial year.
A new Department of Employment and Workplace Relations will be created to implement and administer the government’s workplace relations, jobs, skills and training agenda.
There will be a new Department of Climate Change, Energy, the Environment and Water to deliver the government’s climate change and energy agenda.
The Department of Health will be renamed to include Aged Care, and the Department of Infrastructure, Transport, Regional Development and Communications will be renamed to include the Arts.
