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Budgeting & saving

Juggling the family budget

02 June 2017

Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

Juggling the family budget has just got a whole lot harder, thanks to some important announcements in the 2017 Federal Budget. So, how did you fare? Now that all the dust has settled, we take a look at some of these Budget announcements and explain what they mean for you and your family.

Medicare levy

One of the first big changes coming out of this year’s Federal Budget is an increase to the Medicare levy, which will rise from 2.0 per cent to 2.5 per cent from 1 July 2019. This increase is to help ensure that the National Disability Insurance Scheme (NDIS) is properly funded.

So, for every $10,000 of income earned, you can expect to pay an extra $50 in the Medicare levy.

It’s also worth noting that the Medicare levy thresholds for low-income earners will also increase. For singles, it will increase to $21,655, for families it will increase to $36,541 plus $3,356 for each dependant child or student, for single seniors/pensioners it will increase to $34,244, and for senior/pensioner couples, the threshold will increase to $47,670 plus $3,356 for each dependant child or student.

Child Care Subsidy

The Child Care Subsidy, which will replace the Child Care Benefit and Child Care Rebate, will be introduced on 2 July 2018 to help families using approved child care, enabling them to participate in work, study, training or other recognised activities.

The new subsidy will be means tested based on family income and the amount of time the parents are away working (or involved in a recognised activity, like studying), to determine a subsidy of between 50 per cent and 85 per cent of the actual fee, up to an hourly cap depending on the type of child care used. The subsidy will be limited to 36, 72 or 100 hours of care per child per fortnight.

The Child Care Subsidy payments will be paid directly to approved child care service providers on behalf of families, with the families paying the gap between the level of subsidy they receive and the actual fee charged by the service.

However, for families earning $185,000 or higher, an annual cap of $10,000 for assistance per child will apply each year.

Family Tax Benefit

If you’re a parent with dependant children, you’re probably receiving some form of Family Tax Benefit. So, be prepared for changes if you’re in a relatively high income earning household.

From 1 July 2018, the Government will apply a consistent 30 cents in the dollar taper rate to FTB Part A recipients with a household income in excess of the Higher Income Free Area (currently $94,316). By doing so, the Government is ensuring that higher income families are subject to the same income test taper rates.

So, for high income families on $94,000 to $125,000, their FTB Part A will drop, while those under this bracket won’t be affected. Those families over this bracket don’t receive FTB Part A.

The good news in relation to the FTB is the Government will not proceed with an increase to the maximum rate of FTB Part A as previously announced. And it also proposes to maintain the rates of FTB Part A and B at their current levels for two years from 1 July 2017.

And remember, for households earning $80,000 or more, since 1 July last year, they no longer receive the FTB Part A supplement, which is worth up to $726.35 per child.

Temporary Budget Repair levy

If you’re earning over $180,000, the good news is that your tax rate drops back 2 cents in the dollar from 1 July this year, when the Government’s ‘Temporary Budget Repair levy’ ends. That’s worth an extra $200 for every $10,000 of extra income in your back pocket.

Residential rental property

For families with a residential rental property there are tax changes coming. From 1 July 2017, the Government is removing all tax deductions for travel expenses relating to inspecting, maintaining and/or collecting your rent from a residential rental property. And in addition, plant and equipment depreciation on residential properties will be limited to the actual outlay incurred for properties purchased from Budget night.

Higher Education Loan Program

For families with dependant children in higher education programs, there are changes ahead.

From 1 July 2018, the income threshold at which HELP debts must begin to be repaid will lower from $55,874 to $42,000. And the rate at which repayments must be made will increase with a person’s income – from 4 per cent up to 10 per cent for those individuals earning more than $119,881.

First Home Super Saver Scheme

For all aspiring first home buyers, the Government is allowing them to make voluntary contributions to their superannuation by salary sacrificing, and then from 1 July 2018, allow them to withdraw up to $30,000 (less contributions tax plus associated earnings) towards a deposit on their first home.

And it gets better.

Members of a couple can both use this scheme to purchase their first home by pooling their respective deposits together, effectively allowing them to use $60,000 (less contributions tax plus associated earnings) towards buying their first home.


The good news for people over 65 who are looking to downsize their home, the Government is allowing them to top up their existing superannuation with $300,000 from the proceeds of the sale of their house. Better still, a couple can contribute up to $300,000 each from the sale of the same home, making this a $600,000 contribution.

But there’s a lot more to this year’s Budget than outlined here. So, to make sure your are maximising your opportunities from the Government’s announcements, talk to a CERTIFIED FINANCIAL PLANNER® professional, who will help you navigate these and other changes in the 2017 Budget.

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