July tax cuts
Taxpayers will be paying less tax from 1 July.
Under changes announced by the PM last month, the lowest tax bracket rate will be reduced from 19 to 16 per cent for earnings under $45,000. The 37 per cent tax rate will be retained for those earning between $135,000 and $190,000. The top income tax bracket of 45 per cent will kick in for earnings over $190,000.
That means people on incomes under $45,000 will get a tax cut of up to $804 a year. A worker on the average full-time salary of $73,000 a year will receive a tax cut of about $1500. A worker earning $100,000 a year will gain a tax cut of $2100 a year.
Deeming rate freeze set to end
Centrelink’s deeming rate freeze will come to an end on 1 July with experts predicting an initial ‘modest’ rise.
In July 2022, the federal government announced a freeze on social security deeming rates for two years to help pensioners ‘keep more in their pockets’. It froze the lower deeming rate at 0.25 per cent and the upper rate at 2.25 per cent.
The lower deeming rate applied to financial investments up to the threshold amounts of $60,400 for singles and $100,200 for couples. The upper deeming rate applied to financial assets above those thresholds.
The interest rate was 0.35 per cent when the deeming rates were frozen. The cash rate is now about 4.35 per cent.
In addition to the tax cuts, about 1.2 million Australians will get a bigger exemption from the Medicare levy with the government changing the thresholds above which taxpayers are required to pay the 2 per cent levy.
Currently, single people who earn less than $24,276 do not have to pay the levy. After that, the levy phases in gradually. The 2 per cent levy is paid by anyone earning more than $30,345.
Those thresholds rise to $26,000 and $32,500 respectively.
Different thresholds apply to some seniors, pensioners and families. Those would also increase by 7.1 per cent.
Single pensioners will be $272.40 better off per year and a single person earning $30,000 will be $172.40 better off.
Medicare rebate thresholds
The thresholds for the Medicare Safety Net are increasing to keep in line with inflation.
Once your gap expenses reach the threshold in a calendar year, Medicare will reimburse you 100 per cent of the Medicare Benefits Schedule (MBS) fee instead of 85 per cent.
Also, the Extended Medicare Safety Net has changed. This assists people who incur out-of-pocket costs for Medicare-eligible out-of-hospital services. Once they’ve paid over the threshold, Medicare will pay up to 80 per cent of any future out-of-pocket costs for out-of-hospital Medicare services for the rest of the calendar year.
The original threshold has gone up by $28.70.
For concession card holders, the extended threshold went up by $41.50. It has gone up by $130.30 for non-concessional individuals and families.
See the new thresholds here.
PBS medication costs increase
You’re paying more for medications on the Pharmaceutical Benefits Scheme (PBS).
Last year, the maximum cost of most general prescriptions under the PBS was $30 for general patients on Medicare and $7.30 for concession card holders.
That has gone up by $1.60 for general patients, who now pay up to $31.60. Concession card holders pay up to an extra 40 cents, with the maximum being $7.70.
On 20 March 2024, new payments and thresholds for the Age Pension will take effect. The pension is adjusted twice a year in line with inflation.
Work Bonus Bank increase
The maximum Work Bonus Income Bank amount that can be accrued was permanently increased from $7800 per year to $11,800 per year and took effect from 1 January.
Pensioners over Age Pension age accrue any unused part of the $300 fortnightly Work Bonus in a Work Bonus income bank. The income bank amount offsets future income from work that would otherwise be assessable under the pension income test.
From 1 July 2024, the Super Guarantee will increase to 11.5 per cent. It will increase to 12 per cent in 2025.
Energy bill relief
The federal government is partnering with state and territory governments to provide up to $3 billion in electricity bill relief for eligible households through the Energy Bill Relief Fund. The states and territories administer the rebates. Review your eligibility and check to ensure you’re receiving these savings.
Cooking with gas
New homes built in Victoria are now banned from connecting to natural gas.
The ban was billed by the state government as a cost-of-living measure that could save households up to $1000 on their annual energy bills while reducing household emissions.
To encourage new and existing homeowners and renters to go all-electric, households can access $1400 solar panel rebates and interest-free loans of $8800 for household batteries.
Victorian households and businesses are also eligible for gas-to-electric rebates to upgrade heating and cooling and hot water heaters.
$200 to help beat ‘bin tax’
Brisbane households can access a $200 rebate when they install insinkerators and waste dehydrators to help residents avoid the state government’s controversial ‘bin tax.
The Towards Zero Waste strategy contains a suite of measures aimed at helping households reduce the amount of waste they send to landfill.
Do you know of any other services or rebates that retirees should be aware of? Share them in the comments section below.