Budget 2024-25: Individuals & families
This pre-election budget acts as a revitalising force, thoughtfully crafted to alleviate the burden of living costs for all. In this article, we delve into the comprehensive reforms it introduces, such as enduring tax reductions, updated tax brackets for individuals, increased Medicare levy exemptions for those with lower incomes, and energy subsidies aimed at benefiting households.
Furthermore, there have been considerable advancements in bolstering support for students, parents, renters, caregivers, and job seekers. Aimed at fostering financial stability and growth, these measures paint a bright future for the Australian economy. Continue reading to delve into the details of these critical changes and their potential impact on the future.
Interested in understanding how the budget impacts superannuation, investors, or small businesses? Explore our insightful blogs by clicking here:
Confirmation of Personal Income Tax Reductions Effective from 1st July 2024
As previously declared, starting from 1 July 2024, the Government will enact permanent tax reductions for all Australian taxpayers.
Compared to the earlier Stage 3 strategy, the revised reductions expand the tax cut's advantages by targeting individuals earning a taxable income under $150,000, enhancing the plan's focus and inclusivity.
Updated Individual Tax Rates and Thresholds Effective from 2024–25
| 2023 - 24 | 2024 - 25 | ||
| Thresholds ($) | Rates (%) | Thresholds ($) | Rates (%) |
| 0 – 18,200 | Tax free | 0 – 18,200 | Tax free |
| 18,201 – 45,000 | 19 | 18,201 – 45,000 | 16 |
| 45,001 – 120,000 | 32.5 | 45,001 – 135,000 | 30 |
| 120,001 - 180,000 | 37 | 135,001-190,000 | 45 |
Resources
Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024
Increase in Medicare Levy Low-Income Thresholds Effective from 1 July 2023
Starting July 1, 2023, folks with lower incomes will get a break with higher Medicare levy thresholds for singles, families, and seniors and pensioners. So, when you file your taxes for the year ending June 30, 2024, you’ll start to see the difference.
Updated Medicare Levy Low-Income Thresholds
| Medicare low-income threshold | Threshold as at 30 June 2023 | Threshold from 1 July 2023 |
| Singles | $24,276 | $26,000 |
| Families | $40,939 | $43,846 |
| Single - seniors and pensioners | $38,365 | $41,089 |
| Family - seniors and pensioners | $53,406 | $57,198 |
| Family - for each dependent child or student* | $3,760 | $4,027 |
*For each dependent child or student, the family income threshold increases by the stated amount.
The adjustments in the thresholds reflect recent changes in the Consumer Price Index (CPI), ensuring that taxpayers with low incomes will mostly remain exempt from the Medicare levy.
$300 Energy Relief for Households Starting from July 1 2024
Great news - Every household is going to get a $300 credit on their energy bills. It'll be split into automatic payments every three months throughout 2024-25.
Small businesses in need can look forward to a bit of a break with a $325 rebate for energy relief.
At a cost of $3.5 billion over the three-year period from 2023-24, this initiative broadens and prolongs the Energy Bill Relief Fund.
Resources
Media release: New power bill relief
Capping Indexation of HELP Debts that existed on 1 June 2023
The Government has confirmed that starting 1 June 2023, the HELP indexation rate will be capped at the lower value between the Consumer Price Index (CPI) and the Wage Price Index (WPI). This adjustment will affect all existing HELP, VET Student Loans, Australian Apprenticeship Support Loans, and other student support loan accounts that existed on 1 June 2023, ensuring a more equitable cost structure for students.
By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from:
- 7.1% to 3.2% in 2023, and
- 4.7% to around 4% in 2024.
The adjustment addresses a concern for over 3 million Australians burdened by HELP debt, following a surge in the CPI indexation rate to 7.1% last year.
Pending legislative approval, an individual carrying an average HELP debt of $26,500 will benefit from a reduction of approximately $1,200 in their outstanding HELP loans this year.
Estimated indexation for HELP debts
| HELP debt at 30 June 2023 | Total estimated credit for 2023 and 2024* |
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
*The actual credit amount may differ based on individual situations, including repayments made throughout the year. All HELP debts indexed in 2023 and due for indexation on June 1, 2024, will be credited with an indexation allowance.
Resources
Media Release: Cutting student debt for more than three million Australians
Paid Parental Leave to Include Superannuation Starting 1 July 2025
Starting 1 July 2025, superannuation contributions will be applied to Paid Parental Leave payments, as previously announced.
Eligible parents are set to benefit from an extra payment, equivalent to the superannuation guarantee rate of 12% of their Paid Parental Leave (PPL) payments, which will be contributed directly to their superannuation fund.
In addition to the recent adjustments, families were granted an extra two weeks of leave, totaling 22 weeks. This will further extend to 24 weeks starting July 2025 and reach 26 weeks by July 2026, as per the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, which received Royal Assent on 20 March 2024.
Resources
Increasing Commonwealth Rent Assistance Effective from September 20, 2024
Starting 20 September 2024, the maximum rates for Commonwealth rent assistance will see a 10% increase.
Recipients of Centrelink/Department of Veterans Affairs payments and those receiving family tax benefit may also receive rent assistance if they are paying rent or other rent like payments over a minimum fortnightly threshold.
Individuals currently getting some support from Centrelink or the Department of Veterans Affairs or receiving family tax benefits might also be eligible for a little extra help with their rent. If your rent or similar payments are over a certain amount every two weeks, rent assistance could be on the table for you.
The current maximum fortnightly rates are $188.20 for a single person and $177.20 combined for a couple.
The measure will cost $1.9 billion over five years from 2023–24 (and $0.5 billion per year ongoing from 2028–29), and builds on the 15% increase in September 2023, taking the maximum rates over 40% higher than in May 2022.
Improving aged care support
The Government will provide funding of $2.2 billion over the next five years to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety.
This funding includes the release of an additional 24,100 home care packages in 2024-25.
The Government has also agreed to defer the commencement date of the new Aged Care Act to 1 July 2025.
The Government is currently in the middle of considering and implementing changes to the way aged care is funded on the back of the Royal Commission into Aged Care Quality and Safety report released in 2021.
This will likely impact home care and residential care fees in the future. Generally, with past reform we have seen existing residents and home care recipients ‘grandfathered’ under the rules at the time they entered.
Enhanced Flexibility in Carer Payment Options Starting 20 March 2025
At present, eligibility for the Centrelink Carer Payment mandates that caregivers limit their engagement in work, study, or training to no more than 25 hours a week. This stipulation underscores the expectation that to qualify for this payment, caregivers must be dedicated to offering 'constant care' to the care recipient.
Starting on 20 March 2025, the current weekly commitment of 25 hours will be adjusted to a total of 100 hours spread across four weeks.
This limit will no longer capture study, volunteering and travel time so will only apply to employment.
Furthermore:
- Carer Payment recipients exceeding the participation limit or their allowable temporary cessation of care days will have their payments suspended for up to six months, rather than cancelled.
- Recipients will also be able to use single temporary cessation of care days where they exceed the participation limit, rather than the current seven day minimum.
Higher JobSeeker rate for partial capacity to work from 20 September 2024
Starting 20 September 2024, the Government plans to broaden the criteria for receiving the current higher JobSeeker payment rate. This extension will benefit single individuals who have a limited ability to work, ranging from 0 to 14 hours per week.
At present, individuals aged 55 or older who have been receiving JobSeeker payments for nine consecutive months are eligible for an increased payment rate.
| Relationship status | Maximum payment per fortnight |
| Single with no children | $762.70 |
| Single with dependent children | $816.90 |
| Single 55 or older after 9 continuous months of payments | $816.90 |
| Partnered (Each) | $698.30 |
Freezing social security deeming rates until 30 June 2025
When determining Centrelink and Department of Veterans Affairs payments, the actual income from financial investments is not directly assessed. Instead, a deemed rate of return, calculated based on the total value of these investments, is applied. Financial investments commonly considered under this approach include bank accounts, term deposits, shares, and managed funds.
The Government proposes to freeze the deeming rates (shown below) until 1 July 2025:
| Deeming rate | Single | Pensioner Couple |
| 0.25% | Up to $60,400 | Up to $100,200 |
| 2.25% | Amounts over $60,400 | Amounts over $100,200 |
Adjustments to Pharmaceutical Benefits Scheme (PBS) Co-payments Effective from 1 January 2024
The Government is committed to keeping medication costs low by halting the increase in prices through freezing indexation:
- PBS general co-payments will remain unindexed from 1 January 2025 to 31 December 2025, inclusive. Indexation will resume on 1 January 2026.
- The concessional co-payments under the PBS will remain unindexed from January 1, 2025, through December 31, 2029, with indexation set to resume on January 1, 2030.
The optional $1 discount on patient co-payments for subsidised prescriptions will decrease annually by the corresponding notional indexation amount, steadily diminishing from $1 to zero.
Starting 1 January 2024, the cost for the majority of PBS medications will be capped at $31.60, with a reduced rate of $7.70 for concession card holders. The Australian Government will cover the remaining expenses, excluding brand premiums and some specific allowable charges.
Federal, state and territory governments focus on housing
Housing initiatives focus on three critical areas:
01 Private commercial development of future housing supply
The Government has set a bold objective to construct 1.2 million homes by the decade's end. In the 2023-24 Budget, it introduced initiatives to boost investment and the development of housing, with a focus on build-to-rent projects that incorporate affordable housing options. However, the necessary legislation to enact these incentives was only recently made available by the Treasury. Achieving significant investment is challenging without legislation that ensures certainty. To date, no additional initiatives have been disclosed.
02 Support to help ease the path to home ownership for first home buyers
Assistance to simplify the journey towards home ownership for first-time buyers remains a key focus in the 2023-24 Budget, with a significant commitment of $5.5 billion over ten years to the Help to Buy scheme. To date, no additional incentives have been introduced.
03 Crisis and social housing support
The Government has unveiled a $1 billion initiative aimed at providing crisis and transitional housing for women, children escaping domestic violence, and youth. This commitment is in addition to a 15% boost in Commonwealth Rent Assistance as outlined in the 2023-24 Budget.
Budget Allocations to Boost Housing and Support Social Initiatives
As previously stated, a significant portion of the Budget funding is allocated to the States and Territories. This allocation aims to enhance housing stock, expand social housing, and offer crisis accommodation. The new measures introduced are designed to support these goals.
- Allocate $1 billion for states and territories to enhance roads, sewers, energy, water, and community infrastructure.
- The introduction of a transformative $9.3 billion 5-year National Agreement on Social Housing and Homelessness aims to empower states and territories in their fight against homelessness. It will enable the provision of crisis support, alongside the construction and refurbishment of social housing. Notably, this agreement features a significant increase in Commonwealth funding for homelessness, with an annual commitment of $400 million, which will be matched by state and territory contributions.
Resources
Media Release: Multi-billion-dollar investment to build more homes for Australians
Treasury consultation: Build-to-rent tax concessions
Establish a Domestic violence program From mid-2025
The Government has pledged nearly $1 billion over five years to solidify the Leaving Violence Program. This initiative ensures individuals fleeing violence have access to financial aid, safety assessments, and guidance towards supportive services. Eligible participants can receive up to $5,000 in financial assistance, alongside services for risk evaluation and safety strategy development.
Resources
Media Release: Helping women leave a violent partner payment
Superannuation & investors
Expanding CGT regime for foreign residents
CGT regulations effective from 1 July 2025 will expand the foreign resident capital gains tax (CGT) framework by:
- Clarifying and broadening the range of assets subject to CGT for foreign residents.
- Modifying the principal asset test to encompass a 365-day testing period.
- Requiring foreign residents who dispose of shares and other membership interests valued over $20 million to notify the ATO before the transaction is executed.
Under current law, foreign residents must pay Capital Gains Tax (CGT) when they sell assets classified as 'taxable Australian property' (TAP). These rules ensure that non-residents pay Australian CGT when they dispose of assets connected to Australian land or used in business activities within Australia.
Shares in a company and units in a trust can be considered TAP if the taxpayer and certain related parties hold at least a 10% interest in the entity, and more than 50% of the entity's asset value comes from real property in Australia or similar assets.
This measure aims to let Australia tax foreign residents on both direct and indirect sales of assets closely linked to Australian land, aligning their tax treatment with Australian residents.
The new ATO notification process will improve oversight and compliance with the foreign resident CGT withholding rules, where a vendor self-assesses that the sale doesn’t involve TAP. The proposed reforms will also bring Australia’s tax law for foreign resident capital gains closer to OECD standards and international best practices.
The Government will consult on the measure's implementation details, which is expected to increase receipts by $600 million and increase payments by $8 million over five years from 2023–24.
The team
The Trekk Advisory team is here for you, ready to help you make the most of the Budget's opportunities or to navigate any risks. Remember, the details matter, so don't hesitate to reach out if you need our support.
Timeline of initiatives
Measures and start date at a glance
| Budget measures | Application date |
| INDIVIDUALS | |
| Tax cuts have been legislated for all 13.6 million Australian taxpayerss | 2024–25 and later income years |
| Increasing the Medicare levy low income threshold | From 1 July 2023 |
| Indexation on HELP debt to be capped to the lower of either the CPI or the WPI. | 1 June 2023 |
| BUSINESS | |
| Instant asset write-off threshold temporarily increased to $20,000. | From 1 July 2024 until 30 June 2025 |
| Two time‑limited tax incentives to invest in new industries: - Critical Minerals Production Tax Incentive to support downstream refining and processing of Australia’s 31 critical minerals to improve supply chain resilience Hydrogen Production Tax Incentive to producers of renewable hydrogen to support the growth of a competitive hydrogen industry. |
2027–28 to the 2040–41 income years |
| Extension and expansion of the Energy Bill Relief Fund | Funding for three years from 1 July 2024 |
| All households will have $300 credit automatically applied to their electricity bills and around one million small businesses will receive $325 off their bills over 2024–25. | From 1 July 2024 |
| Funding to support small business by: - Improving payment times to small businesses - Supporting mental health and financial wellbeing of small business owners -Ensuring confidence in the franchising sector - Providing small business with better access to justice |
Funding for four years from 2024–25 |
| Proposed changes to the Producer Tax Offset to remove: - The minimum length requirements for content - The above-the-line cap of 20% of total qualifying production expenditure. |
2025–26 income year |
| TAX EXEMPT ENTITIES | |
| Extension of transitional reporting for charities and updates to specifically listed DGRs | Various |
| INTERNATIONAL | |
| Strengthen the foreign resident CGT regime by: - Clarifying and broadening the types of assets on which foreign residents are subject to CGT - Amending the point-in-time principal asset test to a 365-day testing period - Requiring foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed. |
CGT events commencing on or after 1 July 2025 |
| SUPERANNUATION | |
| The Government will pay superannuation on Commonwealth government-funded PPL | Births and adoptions on or after 1 July 2025 |
| Funding to support the progression of the Government’s workplace relations agenda, including: - Pursuing unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024 - Supporting workplaces to implement policy changes such as the introduction of payday superannuation. |
Funding for four years from 2024–25 |
| Funding to support the delivery of Government priorities in the Finance and Treasury portfolio including: - Implement the 2023–24 Budget measure Better Targeted Superannuation Concessions for members of the Commonwealth defined benefit superannuation schemes - SuperStream Gateway Network Governance Body |
Funding over four years from 2024-25 |
| COMPLIANCE | |
| Extend the Tax Avoidance Taskforce | Funding over two years from 1 July 2026 |
| Extend the Personal Income Tax Compliance Program | Funding for one year from 1 July 2027 |
| Extend the Shadow Economy Compliance Program | Funding over two years from 1 July 2026 |
| ATO funding to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems | Funding over four years from 1 July 2024 |
| Funding for the ATO for various matters including: - Requirements of existing and new child care providers (relating to the Child Care Subsidy Program) - Improving the Government’s Digital ID, myGovID and other systems - Data-matching pilot between the Department of Home Affairs and the ATO - Overseeing / operating the secure eInvoicing network |
Various |
| OTHER MEASURES | |
| Funding to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to enhance Australia’s ability to detect and disrupt illicit financing. | Funding over four years from 2024–25 |
| Women’s Budget Statement — various measures that focus on four priorities | Various |
| Funding to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology. | Funding over four years from 2024–25 |
| Funding to implement a social security means test treatment for the military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. | Funding over five years from 2023–24 |
| Funding to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety. | Funding over five years 2023–24 |
| New Aged Care Act — deferred commencement date | 1 July 2025 |
| Social security deeming rates will freeze at their current levels | Until 30 June 2025 |
| Increased flexibility for recipients of Carer Payment —the existing 25 hour per week participation limit will be amended to 100 hours over four weeks. | From 20 March 2025 |
| Commonwealth Rent Assistance maximum rates to be increased by 10% | 20 September 2024 |
| Eligibility for the existing higher rate of JobSeeker payments has been extended | 20 September 2024 |
| GENERAL | |
| Amendments to previously announced measures: - Australian plantation forestry entities are exempt from the new earnings-based test, thin capitalisation rules - Giving the Commissioner a discretion not to use a taxpayer’s refund to offset old tax debts - where the old tax debt was put on hold before 1 January 2017 - Extending income tax exemption to World Rugby and/or related entities in relation to income from Rugby World Cup events for the 2023–24 to 2030–31 income years (incl.) |
|
| Deferring the start date for Tax Integrity — expanding the general anti-avoidance rule in the income tax law | Income years starting on or after the day the amending legislation receives Royal Assent |
| Changing the start dates for certain components of the Streamlining excise administration for fuel and alcohol package | The day after Royal Assent |
| Measures not proceeding: - Denying deductions for payments relating to intangibles held in low- or no-tax jurisdictions measure — announced in the 2022–23 October. - Previous Government’s 2019 –20 Budget measure Black Economy – strengthening the Australian Business Number system. |
|
Disclaimer
This document is provided with the understanding that it does not constitute advice, nor does it imply that the authors or distributors are offering legal or professional guidance. Despite the careful preparation of the information, individuals should not base their actions solely on its contents. Should you need assistance, it is advisable to seek professional counsel.
The information provided in the Budget 2024-25 Updates is intended to serve as a resource, to be used alongside professional expertise and judgement. Responsibility for the application of the Budget 2024-25 Update, including any direct or indirect outcomes resulting from decisions made based on this update, falls to the user. Trekk Advisory Services Pty Ltd, its directors, authors, and anyone else involved in creating and distributing this guide, categorically deny any liability for losses or damages of any kind, whether from contract, tort, or otherwise, arising from the use of the Budget 2024-25 Update or reliance on any information contained within this guide.
