Changes coming into effect in the new financial year

Sure, the new financial year is never anywhere near as exciting as the New Year itself. But that doesn’t make it a less important date on your calendar.

With a new financial year upon us, here are some of the changes you need to keep abreast of to ensure you keep your monthly budget in check.

Slight tax relief

From July 1, tax relief for low and middle-income earners will come into effect. Those earning up to $37,000 (and taxed at 19%) tax rate will receive a benefit of up to $200.

This will increase incrementally for those earning between $37,000 and $48,000.

The maximum offset of $530 will be available to taxpayers earning between $48,000 and $90,000.

You will receive the benefit as a lump sum on assessment after you lodge your tax return.

The upper threshold for the 32.5% tax bracket will also increase from $87,000 to $90,000. The move is expected to provide an annual tax cut of up to $135 for 3 million people.

New child care package

From July 2, the current Child Care Benefit and Child Care Rebate will be replaced with a single, means-tested benefit: The Child Care Subsidy, which will be paid directly to care services.

Families that complete more than 48 hours of activity each fortnight can earn the maximum 100 hours of subsidised care per fortnight. But just 16 hours’ activity will qualify them for 72 hours of care.

Because of the new focus on means testing, under the new scheme wealthier families will receive less money. More details can be found here.

Online shopping tax

Online GST laws will come into effect. They’ll require businesses with an annual turnover greater than $75,000 to collect GST on low-value imported goods under $1000.

The measure was enough to prompt online retail giant Amazon to announce that they’d stop shipping goods from their overseas sites to addresses in Australia.

Downsize into your Super

If you are 65 years old or older and meet the eligibility requirements, you may be able to make a downsizer contribution (of up to $300,000) into your superannuation from the proceeds of selling your home.

Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps. Also, the downsizer contribution can still be made if an individual has a total super balance greater than $1.6 million.

Comprehensive credit reporting

More data is about to be included in your credit file, giving lenders a better understanding of your finances.

Comprehensive credit reporting (CCR) has been around for a while now, but the Big 4 banks haven’t really jumped onboard. Now they’ve been told by the government to do so, which means sharing 50% of your credit data with credit bureaus.

While research from credit bureau Equifax shows that consumers with CCR data on their credit file will likely see improvements in their credit scores, it’s still going to be important to keep an eye on whether or not your rating goes up or down significantly.

Immunisation requirements

If your children aren’t immunised, and you’re currently receiving the Family Tax Benefit Part A, your payments could be reduced by up to $28.28 per fortnight, per child. Human Services has advised they’ll be contacting parents if their children don’t meet requirements.

Final word

As you can see, some changes spell good news for you and your family, and others – well, not so much.

If you’d like us to help you work out exactly how much your family’s budget will change in 2018/19, then get in touch. We’d be more than happy to help you crunch the numbers!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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