Money

Money Matters with Effie Zahos: The big financial changes coming on July 1

Everything you need to know.
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There are significant changes that could have a real impact on your finances come end of financial year on July 1. Here are the big five you should know about.

1. Changes to super

The thresholds that restrict how much extra you’re able to put into your superannuation are about to increase. From July 1, concessional (pre-tax) contribution caps will increase from $27,500 to $30,000 per financial year.

Concessional super contributions include the compulsory super guarantee payments that your boss puts in, any payments you may make under a salary sacrifice agreement and any voluntary super contributions you make and claim a deduction on.

These are all taxed at a lower rate of 15%, meaning come July 1, if you earn over $45,000 you can add to your retirement fund in a tax-effective way.
Meanwhile, non-concessional caps – made from after-tax contributions – are set to rise from $110,000 to $120,000. This is great if you’re wanting to place larger sums into super and particularly good if you’re heading into retirement.

Across the board, employees will be receiving more in their super accounts, with the superannuation guarantee increasing to 11.5%. For someone on a base salary of $98,000, contributions will increase from $10,780 to $11,270.

Super hack

Boost your super by signing up to a cashback service provider. Grow My Money, for example, allows you to direct any cashbacks you earn from shopping into your super fund.

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2. Electricity prices

Good news could be on the way for your power bills, with the country’s energy regulators pointing towards lower electricity costs in three states. The Australian Energy Regulator and Victoria’s Essential Services Commission have released drafts on the maximum price retailers can charge customers – the “default market offer”. So chances are you could be putting more back in your pocket come July

Compared to the year just gone, most residential customers are set to see a reduction of up to 7.1% annually and up to 9.7% for small businesses. Residents on default market offers in NSW could save around $54, while in Victoria your yearly bills on a default offer could drop by around $112. In SA those paying default power prices could see bills decrease by around $57. Those in South-East Queensland aren’t as lucky, expected to see a slight increase of 2.7%, which equates to around $53.

Tasmania, ACT, WA and NT are left out of the drafts as they’re guided by their respective regulators. At time of press the final determinations will have been handed down, but we’re told to expect little change.

Energy hack

You could score up to $200 by switching energy or gas providers. Typically, you’ll get this as a credit off your first bill. Cashback offers shouldn’t sway your decisions but if there are no switching fees they could be an easy way to cash in.

3. Help to Buy program

If you’re struggling to pull together enough for a home loan, the federal government’s proposed Help to Buy program could help you get into the market sooner. There’s still no official start date but it’s set to kick off once the bill passes in the new financial year.

The program enables you to ‘co-buy’ a home with the government. You need a minimum deposit of only 2% of the home value while the government contributes up to 40% of the equity. This means a mortgage could be as little as 58% of the property purchase. No fees or interest is charged on the government’s contribution, you avoid paying lender’s mortgage insurance and your home loan repayments would be lower.

While you wouldn’t need to pay rent on the stake owned by the government, if you sold your home before that equity was bought back the government would also have a share in the profit based on the amount of equity it owned.

Property hack

Most states and territories have their own versions of Shared Equity programs. If you’re keen on the idea, it may be worth checking out one of these.

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4. Paid Parental Leave

Families welcoming kids into their lives this year can look forward to extra Paid Parental Leave (PPL). The government’s scheme is being expanded to 26 weeks, increasing incrementally up to 2026.
If your child is born or adopted on or after July 1, parents will be able to access a total of 22 weeks, two more weeks than last year. The PPL rate remains the same, matching the national minimum wage of $882.75 per week.

The 22 weeks is only provided to both parents if their total income is below $350,000, otherwise it must be allocated to one parent earning below $168,865. If you’re single, it’s the same deal – you must be on less than $350,000 per year to access payments.

Then in the 2025-26 financial year the government will pay superannuation on PPL, coinciding with the compulsory contributions rate increasing to 12%.

Money hack

To check if you’re eligible for the Child Care Subsidy or other assistance, use the Payment and Service Finder at centrelink.gov.au

5. Stage 3 Tax Cuts

The Federal Government has announced it will deliver tax cuts to Australian taxpayers. The Coalition’s original plans have been revised to favour lower and middle-income earners. If you are currently earning between $50,000 and $130,000 you are the biggest winner, as you will receive a larger tax cut than you would have under the original plan. For example, if you earn $80,000 a year you will now receive a cut of $1679, as opposed to $875. In comparison, if you’re on $200,000 a year you will get a cut of $4529, less than the original estimated cut of $9075.

Tax hack

Use the ATO app’s myDeductions tool for an easy way to keep records in one place.

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