Budget 2024-25: Individuals & Families
Budget 2024-25 Article Quicklinks
Personal Income Tax Cuts Confirmed
From: 1 July 2024
As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024. Relative to the previous Stage 3 plan, the redesigned cuts broaden the benefits of the tax cut by focusing on individuals with taxable income below $150,000.
For rates, see Personal income tax rates from 1 July 2024.
Resources:
Medicare Levy Low-Income Thresholds Increase
From: 1 July 2023
The Medicare levy low-income thresholds will be increased for singles, families, seniors, and pensioners from 1 July 2023.
| Medicare Low-Income Threshold | As of June 30, 2023 | From July 1, 2023 |
|---|---|---|
| Singles | $24,276 | $26,000 |
| Families | $40,939 | $43,846 |
| Single - Seniors and Pensioners | $38,365 | $41,089 |
| Family - Seniors and Pensioners | $53,406 | $57,198 |
| Family - for Each Dependent Child or Student | $3,760 | $4,027 |
The increases to the thresholds take account of recent movements in the CPI so that low-income taxpayers generally continue to be exempt from paying the Medicare levy.
$300 Energy Relief for Households
From: 1 July 2024
Households will receive a credit of $300 on their energy bills credited as automatic quarterly installments across 2024-25. Energy relief will also be provided to eligible small businesses in the form of a $325 rebate.
Costing $3.5bn over three years from 2023-24, the measure extends and expands the Energy Bill Relief Fund.
Resources:
Capping Indexation of HELP Debts
From: Loan accounts that existed on 1 June 2023
As previously announced, the Government will cap the HELP indexation rate to be the lower of either the CPI or the Wage Price Index (WPI) with effect from 1 June 2023. The change will apply to all HELP, VET Student Loans, Australian Apprenticeship Support Loans and other student support loan accounts that existed on 1 June 2023.
By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from:
From 7.1% to 3.2% in 2023
From 4.7% to around 4% in 2024
This change addresses an issue encountered by over 3 million Australians with a HELP debt when the CPI indexation rate spiked to 7.1% last year.
Individuals with an average HELP debt of $26,500 can expect around $1,200 to be wiped from their outstanding HELP loans this year, pending the passage of legislation.
Estimated Indexation for HELP Debts
| HELP Debt at June 30, 2023 | Total Estimated Credit for 2023 and 2024* |
|---|---|
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on June 1, 2024, will receive an indexation credit.
Resources:
Media Release: Cutting Student Debt for More Than Three Million Australians
Superannuation on Paid Parental Leave
Starting from July 1, 2025, superannuation will be paid on Paid Parental Leave (PPL) payments, as previously announced.
Eligible parents will receive an additional payment based on the superannuation guarantee, which is equivalent to 12% of their PPL payments. This contribution will be made to their superannuation fund.
This payment is an addition to the changes that have extended families' leave duration. Initially, families were provided with an extra two weeks of leave, totaling 22 weeks. This will increase to 24 weeks from July 2025 and further to 26 weeks from July 2026. (Refer to the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, with Royal Assent on March 20, 2024).
Resources:
Media Release: Paying Super on Government Paid Parental Leave to Enhance Economic Security and Gender Equality
Increasing Commonwealth Rent Assistance
From: September 20, 2024
The Commonwealth rent assistance maximum rates will increase by 10% from 20 September 2024.
Recipients of Centrelink/Department of Veterans Affairs payments and those receiving family tax benefit may qualify for rent assistance if they are paying rent or similar payments above a minimum fortnightly threshold.
The current maximum fortnightly rates are $188.20 for a single person and $177.20 combined for a couple.
This measure will cost $1.9 billion over five years from 2023–24 and $0.5 billion per year ongoing from 2028–29. It builds on the 15% increase in September 2023, taking the maximum rates over 40% higher than in May 2022.
Improving Aged Care Support
The Government will allocate funding of $2.2 billion over the next five years to implement key aged care reforms and continue implementing recommendations from the Royal Commission into Aged Care Quality and Safety.
This funding includes the release of an additional 24,100 home care packages in 2024-25.
The commencement date of the new Aged Care Act will be deferred to July 1, 2025.
Changes to the way aged care is funded are currently being considered and implemented following the release of the Royal Commission into Aged Care Quality and Safety report in 2021. These changes are likely to impact home care and residential care fees in the future. Typically, existing residents and home care recipients are 'grandfathered' under the rules at the time they entered.
Increased Flexibility for Carer Payment
Date: March 20, 2025
Currently, to receive the Centrelink Carer Payment, the care giver is required to not be involved in work, study or training for more than 25 hours per week. This is to reflect the requirement that to receive this payment the care giver should be providing the care recipient with ‘constant care’.
From 20 March 2025, the existing 25 hours per week will be amended to 100 hours over four weeks.
This limit will no longer capture study, volunteering and travel time so will only apply to employment.
In addition:
Carer Payment recipients exceeding the participation limit or their allowable temporary cessation of care days will have their payments suspended for up to six months, rather than cancelled.
Recipients will also be able to use single temporary cessation of care days where they exceed the participation limit, rather than the current seven-day minimum.
Higher JobSeeker Rate for Partial Capacity to Work
Date: September 20, 2024
The Government will extend eligibility for the existing higher rate of JobSeeker payment to single recipients with a partial capacity to work (zero to 14 hours per week) from 20 September 2024.
Currently, individuals on JobSeeker payments aged 55 or over, who have been on the payment for nine continuous months, receive a higher rate of payment. These rates are as follows:
| Relationship Status | Maximum Payment per Fortnight |
|---|---|
| Single with no children | $762.70 |
| Single with dependent children | $816.90 |
| Single 55 or older after 9 continuous months of payments | $816.90 |
| Partnered (Each) | $698.30 |
Freezing Social Security Deeming Rates
Date: 12 months until 30 June 2025
When calculating Centrelink and Department of Veterans affairs payments, rather than assessing the actual income from financial investments, a deemed rate of return based on the total value of these investments is assumed. Some common examples of financial investments include bank accounts, term deposits, shares and managed funds.
The Government proposes to freeze the deeming rates (shown below) until 1 July 2025:
| Deeming Rate | Single | Pensioner Couple |
|---|---|---|
| 0.25% | Up to $60,400 | Up to $100,200 |
| 2.25% | Amounts over $60,400 | Amounts over $100,200 |
Pharmaceutical Benefits Scheme co-payments
From: 1 January 2024
The Government will ensure that the cost of medicines remains low by freezing indexation:
PBS general co-payments to not be indexed between 1 January 2025 and 31 December 2025 (inclusive), with indexation resuming on 1 January 2026
PBS concessional co-payments to not be indexed between 1 January 2025 and 31 December 2029 (inclusive), with indexation resuming on 1 January 2030
The $1 optional discount available on patient co-payments for subsidised prescriptions will be reduced each year by the relevant notional indexation amount until the $1 discount has been reduced from $1 to zero.
From 1 January 2024, you may pay up to $31.60 for most PBS medicines, or $7.70 if you have a concession card. The Australian Government pays the remaining cost (with the exception of brand premiums and certain other allowable charges).
Federal, state and territory governments focus on housing
Housing Initiatives Address Three Key Areas:
Private Commercial Development of Future Housing Supply:
The Government has set an ambitious goal of building 1.2 million homes by the end of the decade.
The 2023-24 Budget announced new measures to encourage investment and development of housing, particularly build-to-rent developments that include affordable housing. However, the draft legislation enabling the announced incentives has only recently been released by Treasury, affecting certainty for large-scale investment.
No new measures have been announced to date.
Support for First Home Buyers:
The 2023-24 Budget emphasized support to ease the path to home ownership for first home buyers, committing $5.5 billion over a decade to the Help to Buy scheme.
No new incentives have been announced to date.
Crisis and Social Housing Support:
The Government has announced $1 billion directed towards crisis and transitional accommodation for women and children fleeing domestic violence, as well as for youth. This measure is on top of the 15% increase to Commonwealth Rent Assistance in the 2023-24 Budget.
Budget Funding Allocation:
Much of the Budget funding flows to the States and Territories to increase housing stock, social housing, and provide crisis accommodation.
New measures include:
$1 billion for states and territories to build roads, sewers, energy, water, and community infrastructure.
Introduction of a new $9.3 billion 5-year National Agreement on Social Housing and Homelessness, aimed at combating homelessness, providing crisis support, and building and repairing social housing. This includes a doubling of Commonwealth homelessness funding to $400 million annually, matched by states and territories.
Resources:
Media Release: Multi-billion-dollar investment to build more homes for Australians
Treasury Consultation: Build-to-Rent Tax Concessions
Domestic Violence
Date: From mid-2025
As previously announced, the Government has committed almost $1bn over 5 years to permanently establish the Leaving Violence Program – so those escaping violence can receive financial support, safety assessments and referrals to support pathways. Those eligible will be able to access up to $5,000 in financial support along with referral services, risk assessments and safety planning.
Resources:
Media Release: Helping Women Leave a Violent Partner Payment