The new financial year is here — which means a raft of changes is set to impact Australians’ home budgets.
From July 1, millions of Australians will receive a weekly pay increase of about $47 as minimum and award wages are bumped up to catch up with rising inflation and cost of living expenses.
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The Fair Work Commission last month announced the rise in its annual wage review, revealing the national minimum wage and the minimum awards rate would increase by 5.75 per cent — or about $46.70 per 38-hour week.
Wages will lift to about $22.61 per hour or $859.32 per week, according to the Fair Work Commission.
In announcing the decision, Fair Work Commission president Adam Hatcher said the panel heavily considered inflation and the “very unusual” combination of low unemployment, falling real wages and high inflation in Australia.
“We have placed significant weight on the impact of the current rate of inflation on the ability of modern award-reliant employees, especially the low-paid, to meet their basic financial needs,” he said.
Hatcher said the decision struck a balance between helping the lowest-paid Australians while not resulting in a “wage-price spiral”.
“As the total wages of modern award-reliant workers constitute a limited proportion of the national wage bill, we are confident that the increase we have determined will make only a modest contribution to total wages growth in 2023-2024, and will consequently not cause or contribute to any wage-price spiral,” he said.
“We acknowledge that this increase will not maintain the real value of modern award minimum wages, nor reverse the reduction in real value which has occurred over recent years.
“However, the level of wage increase we have determined is what we consider the most that can reasonably be justified in the current economic circumstances.”
Pension changes
Meanwhile, thousands of senior Australians are set to benefit from changes to the aged pension.
The new rules include raising the pension age, as well as the threshold for payments.
The government announced the measure to encourage more seniors to continue working and ease Australia’s labour shortage.
“Age pensioners are struggling to make ends meet,” Retirement Essentials chief customer officer James Coyle said.
Coyle said the threshold changes would allow more people to qualify for the age pension and allow those on the pension to get more.
“At a time of cost-of-living crisis, they will be very welcomed.”
Australians born on or after January 1, 1957, will have to reach 67 years of age before becoming eligible for the pension as part of the new rules.
The changes mean singles can earn $204 a fortnight and couples $360 a fortnight before losing their full pension.
Single homeowners can also have about $301,750 worth of assets before their full pension payment is reduced, while single non-homeowners can have $543,000.
Home-owning couples on a full pension can have $451,500 worth of assets before going onto a part payment, or $693,500 for non-homeowner couples.
People who were previously ineligible for pension payments may now qualify for a part payment, with the income threshold for singles raised to $2332 per fortnight, and $3568 for couples.
Single homeowners can also have $656,500 of assets before being ruled out for a payment, and couples $986,500.
For non-homeowners, singles can have $898,500 in assets and couples $1,228,500.
For people already on full pensions, their payment will remain the same, but Coyle said this group of older Australians are also struggling.
“This is positive because it makes people a little bit better off, but it’s not a lot,” he said.
“At a time of cost-of-living crisis, particularly for single renters, they really struggle. I’d like to see more incentives for senior Australians to remain in the workforce.”
Homebuyer help
Tens of thousands of hopeful home buyers can secure a property with a smaller deposit by locking down a spot on the latest home guarantee scheme.
From Saturday, there will be 50,000 new places available for buyers hoping to jump on the property ladder with a smaller deposit, as the government guarantees a chunk of the loan.
The scheme is also being expanded to a broader cohort.
For the first-home guarantee, which allows buyers to save up a deposit of as little as 5 per cent — with the remaining 15 per cent guaranteed by the government — friends, siblings and other family members will soon be able to lodge joint applications.
In the past, only married or de-facto relationships, as well as single applicants, were permitted to apply for the 35,000 annual places.
Plus, home buyers who have owned a property at some point but not in the past decade will be allowed to apply.
These same expanded criteria will be applied to the regional first-home buyer scheme, which has 10,000 new places each year and is reserved for those living outside major cities.
The family home guarantee scheme will also be expanded to borrowers who are single legal guardians of children.
Another 5000 places will be available on July 1, which will allow single parents and guardians to secure a loan with a 2 per cent deposit.
Changes to social and affordable housing financing will also kick in at the start of the new financial year.
The National Housing Finance and Investment Corporation’s liability cap will be lifted from $5.5 billion to $7.5 billion.
By opening an extra $2 billion in low-cost and long-term finance, about 7000 more new social and affordable homes are expected to be built.
Budget promises
The start of the new financial year will also bring a 15 per cent pay rise for aged care workers, cheaper childcare and changes to paid parental leave.
The policies promised in the last federal budget will come into effect, including electricity bill relief for some households and a small business incentive to help eligible companies become more energy efficient.
Eligibility for the first home guarantee and regional first home guarantee will now include any two borrowers beyond married and de facto couples.
It will also apply to non-first home buyers who have not owned a property in Australia in the previous 10 years.
Treasurer Jim Chalmers said many Australians were doing it tough and the measures were designed to help.
“The suite of policies, which will start to roll out from Saturday, will make a real difference in the lives of millions of hardworking Australians while delivering an economic dividend and laying the foundations for future growth,” he said.
“Key policies like energy price relief will directly reduce inflation, while others like cheaper childcare and enhanced paid parental leave will boost the capacity of our economy.”
The aged care pay rise will benefit more than 250,000 workers and means nurses on an award wage can earn an extra $10,000 a year while personal care workers can earn an extra $7000 a year.
Five million households will be eligible for up to $500 in power price relief while one million small businesses will be able to access up to $650.
About 1.2 million families will pay less for childcare and existing parental leave and dad and partner pay will be combined into a single 20-week scheme which is expected to benefit 180,000 families a year.
Education Minister Jason Clare said the changes would help businesses trying to maintain staff and parents, particularly mums, who wanted to get back into the workforce.
Social Services Minister Amanda Rishworth said the more flexible parental payments would promote shared care, but there was more work to be done.
She flagged additional legislation in coming months will provide families with an extra six weeks of paid parental leave by 2026.
– with AAP
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