The Budget and how it may affect You
In this article
Electricity Rebate
Changes to HECS-HELP debt
Stage 3 Tax Cuts
Changes to Paid Parental Leave
Superannuation Guarantee increases
Superannuation Personal Contributions
Small Business - Electricity Rebate
Small Business - Instant Asset write off
HECS-HELP debt
The latest Budget (May 2024) has introduced positive changes to the HECS-HELP student debt.
From now on it will be indexed to match whichever is lower out of the Consumer Price Index or the Wage Price Index. This will stop HECS loans growing faster than wages.
The policy will be backdated to June 1 2023, which means last year's 7.1 per cent indexation will be lowered to the Wage Price Index of 3.2 per cent.
This means that if you still have a HECS-HELP debt you will receive a credit on last year’s indexation, and if you recently paid it off you will have that amount subtracted from the other taxes you pay, or get a tax refund. It will be applied automatically, you don't need to do anything.
For more details on HECS-HELP see my full article here
Stage 3 Tax Cuts
With most psychologists in the income bracket of $79,000 to $120,000 the stage 3 Tax Cuts will mean you’ll be paying approximately $1600 -$3000 less income tax than you did last year.
These new tax thresholds will apply from 1 July 2024. You don’t need to do anything. These rates will be automatically applied.
Changes to Paid Parental Leave
Good news for those of you who are planning to start a family, or add another family member in the next couple of years. The government will expand the Paid Parental Leave scheme by adding extra weeks of paid leave and paying super on PPL. The intention is to help close the super gap and make decisions about balancing care and work easier for women.
The Paid Parental Leave scheme provides families up to 20 weeks of payment for a child who was born or adopted from 1 July 2023
From 1 July this year, families will have access to an extra two weeks of leave (22 weeks total), which will increase to 24 weeks from July 2025 and 26 weeks from July 2026.
In addition, subject to the passage of legislation, for babies born or adopted on or after 1 July 2025, eligible parents will receive an additional 12 per cent of their Government-funded Paid Parental Leave as a contribution to their superannuation fund.
Applicants for PPL must meet requirements relating to residency, work and your family income must be below $350,000. You also need to use all 100 days of Parental Leave Pay within 2 years of your child’s birth or adoption.
For more information about the PPL scheme click here
Superannuation
From 1 July 2024 the Super Guarantee will increase to 11.5%. This means that if you are an employee, your employer will put 11.5% of your wage or salary into your superfund.
If you are an employer, you will need to pay this to your staff.
On 1 July 2025 it will increase again to 12%.
You can also contribute more to your own super.
The amount that you can salary sarifice into your superannuation is increasing. The new maximum is $30,000 per year.
The new maximum for post-tax contributions to superannuation is now $120,000.
If you're earning less than $43,445 and you make a contribution of $1,000 to your super, the government will contribute $500.
If your spouse has an income under $37,000 you contribute $3,000 to their super and get an 18% tax offset.
To make your own contributions to your Super, Contact your fund and request the appropriate code Make it clear that the contribution is for yourself and that you intend to claim it as a tax deduction. Use the provided code to transfer the funds electronically.
Some conditions do apply so, if you have any questions about this, don't hesitate to ask.Small Businesses and the Budget
If you have your own psychology business the government is providing some support in this Budget.
An Electricity Rebate of $325 will be automatically applied to your power bill if you meet the definition of a small customer. This definition varies depending which state or territory you are in, with Victoria setting the limit at a usage of only 40 mega Watt Hours (MWH), NSW< QLD and ACT at 100MWH, TAS at 150 MWH and SA and NT at 160 MWH.
There is also an extention of the $20,000 instant asset write off if your annual turnover is less than $10 million. This means that if you purchase an asset that costs under $20,000 and first use it by June 2025 you can claim the full amount in your tax return. This is a good chance to purchase a new computer or ipad and save a little bit on tax . WIth the changes to the tax brackets claiming a tax deduction before the 30th June 2024 gives you more tax savings.
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