Employees who keep a close eye on their finances will have noticed several changes that came into effect at the start of the new financial year.
While not all support workers will be impacted by all the changes introduced on July 1, they are worth being aware of in the event you could be impacted by the tax changes, should your circumstances change in the future.
The first of these concerns a rise in the national minimum wage. Effective on July 1, the national minimum wage has risen to $23.23 per hour, up from $21.38. On a 38-hour week for a full-time employee, this equates to a $70.20 increase to $882.80 per week, up from $812.60.
Casual employees who are entitled to the national minimum wage must receive a minimum of $29.04 per hour, which includes their 25 percent casual loading.
The loss of the LMITO
Another change that took effect this financial year is the withdrawal of the low and middle-income tax offset (LMITO).
Introduced as part of the federal budget for 2018/19, the aim of the LMITO was to provide some relief to anyone earning up to $126,000, with the greatest benefit of $1,500 going to those taking home between $48,000 and $90,000 in 2021/22.
The LITO to remain
But while the offset will no longer be available from the 2022/23 tax year (1 July 2022 – 30 June 2023), its sister tax offset, the LITO remains unchanged.
The LITO is a tax offset available to Australian residents who earn less than $66,667 per year and reduces the amount of tax payable by a maximum of $700 for individuals who earn less than $37,500 per year and a minimum offset of $255 for those earning between $45,001 and $66,667.
In further good news, the proportion of wages that employers must contribute to their workers’ retirement savings has also gone up.
Dubbed the superannuation guarantee, the payment has increased from 10.5 percent to 11 percent, effective July 1.
It will continue to rise by 0.5 percent on July 1 each year until it reaches 12 percent in 2025.
The amount employees can claim when working from home has also increased.
The fixed-rate method for calculating your deduction for working-from-home expenses has been revised to 67 cents per work hour, up from 52 cents per hour.
Eligibility of first home owner schemes expanded
There is also good news for support workers looking to purchase their first home, with the federal government expanding the eligibility criteria for its Home Guarantee Scheme.
Incorporating the First Home Guarantee and Regional First Home Guarantee, the changes introduced on July 1 mean friends, siblings and other family members will be able to make a joint application.
Previously, the First Home Guarantee and Regional First Home Guarantee schemes were restricted to married and single people and those in de facto relationships.
Age pension eligibility increase
In what is sure to be unhappy news for many, the age at which you are eligible to claim the age pension has increased.
From July 1, Australians will have to wait until you turn 67, an increase from the current 66 years and six months.
The Fair Work Ombudsman provides education, assistance, advice and guidance to employers and employees on pay, leave and other entitlements. To obtain advice in this area contact the Fair Work Infoline on 13 13 94. A free interpreter service is also available.