Federal Budget 2024/25 – An update for members

On Tuesday 14 May 2024, Treasurer Jim Chalmers handed down the Federal Budget for the 2024/25 financial year.

This year’s Federal Budget was focused on carefully managing the ongoing inflation challenge, providing much-needed cost of living relief for Australians, and making investments for a better and more prosperous future. 

Super-related announcements

Paid Parental Leave (PPL) scheme

The headline inclusion was the previously-announced measure to pay superannuation on the Commonwealth Government Funded Paid Parental Leave (PPL) scheme.

The government has committed to $1.1 billion in super contributions for paid parental leave over four years, and an ongoing cost of $600 million a year thereafter. For the parents of babies born or adopted on or after 1 July 2025, this means they would receive super payments at the SG rate (12%) to their super account. It’s an important step to reduce the impact of career breaks on Australians’ superannuation balances, narrow the gender super gap, and help parents achieve a more confident retirement.

Support to government agencies to detect fraud and recover unpaid super

The Australian Taxation Office (ATO) will be supported to bolster its defenses to detect, prevent and mitigate fraud against the tax and superannuation sector. And further, recalibrate efforts to pursue unpaid super entitlements owed by employers in liquidation or bankruptcy.

Increase in deeming rates frozen for 12-months

Retirees would also benefit from a further 12-month freeze in deeming rate increases,  the upper rate paused since 1 July 2022 at 2.25 per cent. The deeming rate is the figure used to estimate how much financial investments are earning, and how much government entitlements pensioners are eligible for. The budget measure will enable retirees to benefit from increases in interest rates and returns, without reductions to their Age Pension entitlement.

Other key announcements

• A tax cut for all Australian taxpayers
  All Aussie taxpayers will keep more of their pay from 1 July, with the well-foreshadowed stage-three tax cuts coming into play. On average, taxpayers will save $1888 in the coming financial year, or $36 a week. You can get an estimate on how much you might save here.
   
• Energy bill relief
  The government would provide energy bill relief of $3.5 billion to Australian households, with more than 10 million due to receive a total rebate of $300.
   
• More support for low-income renters 
  Commonwealth Rent Assistance is due to increase by 10 per cent from 20 September 2024, with individuals on rent assistance receiving an extra $18.80 on average per fortnight, or $25.06 for families with children.
   
• Increase to Medicare Levy low-income thresholds for 2023-24 
  This means more than one million low-income taxpayers will continue to be exempt from the Medicare Levy, or otherwise pay a reduced levy rate.
   
• Changes to HECS debt  
  Indexation of HECS debt will now be based on either inflation levels or the wage-price index, whichever is lower – with $3 billion in student debt waived.
   
• Cost of medicines frozen 
  There will be a one year cap of $31.60 for prescriptions on the Pharmaceutical Benefits Scheme, with pensionsers and concession card holders benefiting from a 5-year cost cap of $7.70.
   
• Wage boost for care workers
  The government would also provide funding toward wage increases for aged care and early childhood education workers, following imminent Fair Work Commission award wage decisions.
   
• Future Made in Australia plan
  In an effort to boost Australia’s manufactuing capabilities and private sector invetment to key industries, the government has announced a $22.7 billion Future Made in Australia plan.
   
• Changes to JobSeeker
  Aussies with a partial capacity to work up to 14 hours per week will be eligible for the higher rate of JobSeeker payments from 20 September 2024.
   
• Measures to increase housing 
  A total of $6.2 billion for new housing, with $1.9 billion in loans dedicated for 40,000 new social and affordable homes. The government will also work with universities to increase student  accomodation availability. 

We’re here for you

If the current climate is leaving you questioning how to get ahead financially we’re here to help. Through your CareSuper membership you have access to financial planners who can provide super specific advice over the phone, at no extra cost to you.* They can help with strategies to save you tax and help you understand if you’re on track for retirement.

Or, if you would like a review of your whole financial situation, you have access to a team of comprehensive financial planners, with commission-free costs communicated up front.^  We'll consider your spouse, any assets you have outside super, your debts and your financial goals to give you peace of mind and set you up for a confident future.

To speak with someone give us a call on 1300 360 149.

Where to find out more about the budget

Interested in finding out the key announcements for employers? Find out more here.  

For more information and to view all the measures that were announced in this year’s Budget, visit budget.gov.au.
 

^*Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766. 
^{^}Advice is provided by one of our financial planners, who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.