The start of a new financial year brings along various changes that will impact almost everyone, from families and workers to business owners and retirees. As your trusted Accountant, Attune Advisory is here to provide you with a comprehensive breakdown of the significant changes taking effect from July 1, 2023.
Here's our snapshot:
- National Minimum Wage Increase: Effective from July 1, Australia's minimum wage will be $23.23 per hour, reflecting a 5.75% increase in award wages and an 8.6% increase in the minimum wage. This translates to $882.80 per week based on a 38-hour work week.
- Farewell to LMITO (Low and Middle-Income Tax Offset): The temporary tax cut known as LMITO, or "lamington,"will no longer be available for the 2022-23 income year. LMITO provided tax relief to individuals earning up to $126,000, with the maximum benefit of $1500 going to those earning between $48,000 and $90,000 in 2021-22.
- Superannuation Increase: The superannuation guarantee, which is the portion of wages employers must contribute to their employees' retirement savings, will increase from 10.5% to11% from July 1. This increase will continue by 0.5% each year on July 1 until it reaches 12% in 2025. Additionally, the temporary reduction on minimum super drawdown rates for retirees will end. This measure, introduced during theCOVID-19 pandemic, allowed retirees to withdraw only 50% of age-based minimums if they chose to do so.
- Revised Method for Calculating Working from Home Expenses: The fixed rate method for calculating deductions for working from home expenses has been revised. From July 1, the fixed rate method will be67 cents per work hour, up from the previous rate of 52 cents per hour. The actual cost method, requiring detailed record-keeping of private and work-related expenses, remains an alternative option.
- Expanded Eligibility for First Home Owner Schemes: The federal government's Home Guarantee Scheme, including theFirst Home Guarantee, Regional First Home Guarantee, and Family Home Guarantee, will have expanded eligibility criteria. Starting July 1, friends, siblings, and other family members can jointly apply for the First Home Guarantee andRegional First Home Guarantee. These schemes will also be available to non-first home buyers who have not owned a property in the past 10 years.
- Enhanced Child Care Subsidy: Families earning less than $530,000 will be eligible for an increased childcare subsidy from July 10. Higher subsidy rates will apply to families with one child in care earning less than $530,000 in household income, with even higher rates for second and additional children in care. The subsidy increase will also extend to outside school hours care.
- Extended Paid Parental Leave: New parents can now claim up to 20 weeks of paid parental leave, and partnered couples have the option to split the leave between them. For single parents at the time of their claim, the full 20 weeks of paid parental leave is accessible. The current arrangement offers parents 18 weeks of paid parental leave and two weeks of secondary carer leave, both paid at the minimum wage.
- Age Pension Eligibility Age Increased: As of July 1, the age at which Australians can become eligible for the age pension will increase to 67 years, up from the current age of 66 years and six months.However, you can submit your claim in the 13 weeks leading up to your AgePension age.
- TSMIT (Temporary Skilled Migration Income Threshold) Increase: From July 1, the TSMIT will rise from $53,900 to$70,000. The TSMIT represents the minimum salary that must be paid to a sponsored employee to obtain a temporary skilled visa in Australia.
As the new financial year unfolds, it's essential to stay informed about these changes to effectively plan and manage your financial affairs moving forward. At Attune Advisory, we are here to support and guide you through these updates with tailored advice specifically for your circumstances. If you have any questions or would like help with tax planning, superannuation, or other financial matters, reach out to the team on 1300 866113 or send us an email.We are dedicated to helping you navigate these changes and achieve your financial goals.
