New rules kicked in from July 1– and almost all Australians will be affected. Here’s what you need to know.
Wages up 3.5%
Good news for Australian workers with the minimum wage rising 3.5%.
It takes the new national minimum wage to $18.93 per hour or $719.20 per week – a weekly increase of $24.30. However, the increase only applies if you’re paid according to the national minimum wage or under an award.
Changes to childcare subsidies
The new Child Care Subsidy replaces the Child Care Benefit and Child Care Rebate, and families earning $186,958 or less will have no cap on the amount of Child Care Subsidy they can claim.
Your personal details don’t automatically rollover from the old system to the new. If you haven’t already made the transition, you’ll need to complete an online assessment using your Centrelink online account through myGov.
Sunday penalty rates down
Not such great news if you work in the fast food, hospitality, pharmacy or retail industries. Sunday penalty rates have fallen.
The Fair Work Ombudsman (FWO) website sets out the changes, which vary between industries and also depending on whether you’re permanent or casual.
The cut to penalty rates makes it even more important to be sure you’re being paid for the right hours. The FWO’s Record My Hours app could be a handy tool to check you’re not being shortchanged.
Tax savings kick in
Plenty of Australians will pocket a tax saving of $200 to $530 this financial year thanks to the new low and middle income tax offset available to people earning up to $125,333 a year. The downside? This is an offset not a tax cut so you’ll only see the savings when you lodge your 2018/19 tax return.
If you earn more than $87,000 annually, expect a small boost to your pay packet immediately with the 37% personal tax rate now kicking in at $90,000 – up from $87,000.
Online shopping no longer tax-free
Clothing, electronics and furniture purchased from overseas retailers now attract the 10% GST. Until now, goods purchased online from overseas retailers were GST-exempt if the total order value was below $A1000.
The new online tax will only be collected from self-declaring overseas retailers with a turnover of more than $A75,000, so it’s hard to see how the Australian Tax Office will enforce this.
Nonetheless, Amazon US has already responded by saying it will no longer ship to Australia (you can still buy from Amazon.com.au).
On the plus side, the new system helps to create a more level playing field for Australian retailers.
Sell your home, grow your super
If you’re 65 or over and thinking about downsizing, you can now use the proceeds from the sale of your home to grow your super.
Downsizer contributions don’t count towards after-tax contribution limits, and while they are capped at $300,000 per owner, a couple who own their home jointly could add an extra $600,000 to their super this way. You must have owned your home for at least 10 years.
Think carefully before taking the leap to downsize. Unlike your family home, downsizer contributions are not exempt from Centrelink assets test, and age pension entitlement could be affected.
Good money management can now boost you credit score
Comprehensive credit reporting (CCR) kicked in on July 1, meaning lenders will see both positive and negative details of your financial history when you apply for credit.
It’s a good incentive to keep paying bills on time as you could be rewarded with a higher credit score and potentially, a better deal from lenders.