On July 1, a number of significant updates in Centrelink payments Increases into effect, affecting millions of Australians. Individuals and families receiving government assistance will benefit from an increase in their payments, providing some relief in the face of ongoing cost-of-living challenges. From increases in family benefits to adjustments in the minimum wage and pension eligibility, let’s take a closer look at the changes and what they mean for those affected.
Overview of the Centrelink Payment Increase.
Starting July 1, 2.4 million Australians’ Centrelink payments will increase by 2.4%. This increase affects a variety of payments, including JobSeeker, Youth Allowance, Austudy, ABSTUDY Living Allowance, Parenting Payment, Special Benefit, Age Pension, Disability Support Pension, Carer Payments, and Family Tax Benefit.
The goal of these changes is to help recipients keep up with rising living costs, preventing those who rely on government assistance from falling behind financially. The increase is based on a standard indexation process that ensures payments reflect economic changes, particularly inflation and living expenses.
Breakdown of Key Changes
1. The Family Tax Benefit (FTB) increases.
For families with children, the Family Tax Benefit will increase:
- FTB Part A (Children Under 13): The maximum payment will be $227 per fortnight.
- FTB Part A (children over 13): The payment rises to $295.82 per fortnight.
These increases are intended to help families cover the rising costs of raising children, including school supplies, medical bills, and general living expenses.
2. PPL (Paid Parental Leave) Changes
The Paid Parental Leave scheme will be expanded beginning July 1 to provide better support for birthing parents and primary carers. This shift is especially significant because most primary carers, usually women, have traditionally retired with lower superannuation balances than their male counterparts.
Superannuation accrual: For the first time, superannuation will be credited to Services Australia’s Paid Parental Leave.
Extended Paid Leave: Beginning July 1, the paid leave for parents of children born or adopted will be 24 weeks, an increase of 10 days. By 2026, this will increase to 26 weeks.
This initiative is part of the Albanese government’s efforts to close the gender superannuation gap and improve financial security for parents.
3. Minimum Wage Increase
In line with ongoing efforts to adjust wages in Australia, the minimum wage will increase by 3.5%:
The new minimum wage is $948 per week (or $24.95 per hour for a 38-hour workweek), up from $915.90 last year (or $24.10 per hour).
This increase is intended to provide relief to workers earning less than the award wage, allowing them to keep up with inflation and rising living costs.
4. Superannuation Guarantee Increase
Australians who make mandatory employer contributions to superannuation will benefit from a 12% increase in the guarantee rate. This increase will allow employees to save more for retirement, giving them a more secure financial future.
However, the maximum super contribution base will be reduced by $2,570, limiting the amount of super that can be contributed by high earners.
5. Age Pension Eligibility and Increases
The Age Pension eligibility thresholds for Australians aged 67 and up are rising, allowing more people to receive a full or partial pension.
Some part-time pensioners may now be eligible for full pensions.
Former asset-tested part-pensioner couples can receive an increase of $34.50 per fortnight, while singles will receive an additional $22.50.
This change is intended to ensure that pension recipients do not fall behind as asset values and living costs rise.
6. Skilled Visa Worker Pay Rises
Those seeking to work in Australia on skilled visas will also see some benefits. The income thresholds for skilled visa workers will increase by 4.6 percent:
The Specialised Skills Income Threshold will increase from $135,000 to $141,210.
The Core Skills Income Threshold and the Temporary Skilled Migration Income Threshold will increase from $73,150 to $76,515.
These increases will help skilled workers receive fair compensation for their expertise, potentially attracting more talent to Australia’s workforce.
7. Student Cost of Living Relief
For students in South Australia, the government has introduced a measure to reduce transportation costs:
The MetroCard for students will now cost $10 (down from $28.60), making it more affordable for students to commute.
Furthermore, students completing mandatory placements for teaching, nursing, midwifery, or social work courses will no longer work for free. They will now receive a weekly allowance of $331.65. 8. Payroll Tax and Business Relief
In some states, businesses will receive tax breaks:
Victoria will raise the payroll tax-free threshold to $1 million.
In the Northern Territory, the payroll tax-free threshold will increase to $2.5 million.
These changes are intended to help businesses in these states by lowering their payroll tax burden, promoting business growth, and sustainability.
9. Solar Battery Rebate
Starting July 1, Australian households, businesses, and community organisations can receive a 30% discount on the purchase and installation of solar batteries, promoting renewable energy investments.
This policy is part of the government’s efforts to reduce carbon emissions and expand access to renewable energy.
What does this mean for you?
These changes provide a mixed bag of benefits and challenges. On the one hand, families, pensioners, and parents benefit financially from increased payments and extended leave options. On the other hand, certain services such as power bills, waste collection fees, and postage costs will rise, putting a strain on your budget.
The overarching goal of these changes is to keep Australians on track with the economy by assisting them in dealing with rising living costs, supporting parents and workers, and encouraging long-term sustainability in retirement savings.
If you fall into any of the categories affected by these changes, it’s critical to assess your financial situation and plan accordingly, whether that means taking advantage of increased payments, understanding new eligibility criteria, or adjusting your savings strategy.
Final Review
As of July 1, 2025, Australians’ financial landscapes will undergo significant changes. While some of these changes provide relief, others necessitate more planning. Whether you’re a pensioner, a parent, a student, or a worker, these changes will help you keep up with rising living costs, making the future a little more manageable.
Anyone affected by these changes should keep track of new thresholds, payment increases, and relief opportunities to ensure they get the most out of the support available.
