Key legal changes from 1 July 2025
The new financial year is just around the corner, bringing several important legal changes from 1 July that all Australians should know about.
Here’s what you need to know…
Minimum wage is increasing
The Fair Work Commission (FWC) announced a 3.75% increase to the Australian minimum wage.
From 1 July 2025, the new minimum wage will be $24.95 per hour. This is an increase from $24.10 and should give individuals around an extra $32 per week.
Over 2.6 million workers will benefit from the change, which is particularly for those in retail, hospitality and care sectors.
The Government hopes this decision will help more Australians keep up with the rise in living costs.
Increase to superannuation contributions from your employer
The superannuation guarantee is increasing from 11.5% to 12% on 1 July 2025.
This means, your employer will need to contribute more into your fund each time they pay your super guarantee.
The Government will keep the super guarantee at this rate, with no more legislated increases to come.
Threshold for tax-free retirement super increases
The amount of money that can be transferred to a tax-free retirement account will increase to $2 million on 1 July 2025.
Advisers eagerly await the December release of inflation statistics each year because the transfer balance cap is indexed to the Consumer Price Index (CPI) published at that time.
If inflation goes up, the general transfer balance cap is indexed in increments of $100,000 at the start of the financial year.
In December 2024, the inflation rate triggered an increase in the cap from $1.9 million to $2 million.
The complexity with the transfer balance cap is that each person has an individual transfer balance cap. If you have started a retirement income stream, any increase only applies to your unused transfer balance cap.
Paid Parental Leave increase
From 1 July 2025, parents will receive more government-funded parental leave. Any parent who has birthed or adopted their child will now receive 120 days of paid parental leave, up from 110. This is roughly 24 weeks of leave, meaning more time with your newborn.
The Federal Government aims to give parents 26 weeks of leave by 2026.
This leave is flexible and you can choose to take it at any time before your child turns 2 years old.
Income and asset tests for the age pension
The threshold for the existing income and asset tests will increase to 2.4%. The Government uses this test which determines whether someone can receive the paid age pension in Australia.
Specific income test changes:
- Singles can now earn up to $218 per fortnight. This is an increase of $6 where the individual can still receive the full pension.
- For couples, the limit has gone up by $8 to $380 per fortnight.
- The new maximum income threshold is $3,844.40 per fortnight.
Specific asset test changes:
- Single homeowners can now have up to $321,500 in assets (up from $314,000)
- Couples can have up to $481,500 (previously $470,000).
- For non-homeowners, the new limit is $579,500 for singles (up from $566,000) and $739,500 for couples (up from $722,000).
Immigration and Visas
From 1 July 2025, significant updates will affect Australia’s skilled immigration process. One change is the new Core Skills Occupation List will replace the existing Skilled Occupation List.
Additionally, the income thresholds for skilled visas will increase by 4.6% as part of annual indexation. From 1 July:
- The Core Skills Income Threshold and Temporary Skilled Migration Income Threshold will rise from $73,150 to $76,515.
- The Specialist Skills Income Threshold will increase to $141,210.
These higher thresholds apply only to new visa applications and nominations lodged from 1 July 2025 onwards. If you have submitted a visa application before this date, you will not be affected.
Boost to Centrelink payments
Families will receive a 2.4% increase to their Centrelink payments in 2025.
This will benefit around 2.4 million Australians who are currently receiving Centrelink payments such as:
- Age Pension
- Disability Support Pension
- Carer Payment
- Family Tax Benefit A & B
- Newborn Supplement
- Multiple Birth Allowance
- Paid Parental Leave
Source: Australian Business Journal
New road rules for Australian drivers
Starting 1 July, drivers will need to slow down to 40km/h when passing:
- Roadside workers, or
- Any stationary or slow-moving vehicles (travelling at 10km/h or less) with flashing lights.
This rule used to apply only to emergency and police vehicles. But, it will now also cover vehicles like tow trucks, roadside assistance, and incident response vehicles.
The start of the new financial year will bring a range of important legal changes for Australians. Please make sure you review your circumstances to see how these changes might impact you. Reach out to our team if you need tailored guidance.
You can be better prepared for the 2025-26 year ahead!
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your advisor.
