How Will the Australian 2014 Budget Affect You?
The 2014 Australian budget is one of the toughest in decades. Among those expected to lose out in the the 2014 budget at the sick, unemployed, wealthy, families, students and pensioners. So how will this budget affect your family and your life?
2014 Australian Budget Infographic
University students are predicted to be some of the biggest losers in this budget. The repayment threshold on FEE-HELP debts has been lowered to $50,638 meaning more students will start repaying FEE-HELP debts sooner. Interest on FEE-HELP debts has also increased to 6%, and will now be pegged to the Government’s bond rate equivalent rather than inflation. Universities and TAFEs will be able to set their own tuition fees from January 1, 2016, which is predicted to lead to higher course costs for students. On the upside, financial support will be available for students studying Diploma and Bachelor degrees.
Apprentices stand to gain from this budget with the introduction of new concessional Trade Support Loans. This will allow apprentices to borrow up to $20,000 over the course of 4 years.
Under 30 job seekers will not be eligible for Newstart allowance payments for six months. After six months, job seekers will need to work 25 hours per week in a “Work for the Dole” scheme in order to receive income support for six months. At the end of this period, they will again lose access to Newstart payments for six months and this cycle will start over. Student benefits may kick in for people studying or training.
High Income Earners
People on incomes over $180,000 will have to pay a 2% levy on their income for three years, starting 2014-2015.
Seniors & pensioners are expected to be heavily affected by the 2014 Australian budget. Pensions will now be indexed to inflation rather than wage growth, most likely meaning pensions will grow at a slower rate.
Doctors visits will now cost $7 (previously free) for the first 10 visits each year. The income threshold tests for Commonwealth Senior Health Card will be indexed from September 2014, and untaxed superannuation income will be included in that test.
Income threshold tests to be eligible for a pension will undergo major changes, while the pension age will be gradually increased to 70 by 2035. On the other hand, the family home will continue to be excluded from asset tests for the pension.
In welcome news for many people living with a disability, the National Disability Insurance Scheme is expected to go ahead, with large scale rollout in July 2019. People under the age of 35 on a Disability Support Pension may find themselves have to face tougher eligibility requirements that may affect their ability to receive the pension.
Many family benefits have been cut. Family Tax Benefits Part A & B have been reduced, while eligibility for Part B has been tightened. The school kids bonus has been abolished, as has the dependent spouse tax offset.
It will now cost $7 per visit to the doctor, however children under the age of 16 will be able to go for free after their first 10 visits of the year. Finally, there is a new income cap of $100,000 on the paid parental leave scheme.
Motorists will enjoy $11.6 billion in transport infrastructure upgrades and roads have been named a priority in this budget.
Businesses will benefit from a 1.5% cut to the company tax rate from July 1, 2015. The top 3000 firms, however, will pay a 1.5% tax which will fund the parental leave scheme.
Businesses will also be eligible to receive a variety of incentive payments to encourage them to employ people over 50 or who have been long term unemployed and haven’t yet got a job after 6 months on the “Work for the Dole” scheme.