EXPLAINER: All the tax cuts, fee hikes and more in 2021

The New Year will ring in a raft of changes, from extension to business help schemes, tax and social security cuts – and a jump in the cost of passports.

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AUSTRALIA enters a brand new decade with not just the hope of putting COVID-19 behind us but the reality of a tax cut, reductions in social security payments and changes to a raft of rules, fees and charges.

In Tasmania, extensions to a series of COVID-19 relief measures for business announced in the state budget come into effect today.

These include these include an extension to the payroll tax rebate for all youth employees for a further 18 months and extending the current payroll tax rebate for apprentices and trainees for a further 12 months.

The Targeted Apprentice and Trainee Grant for Small Business is now extended to any small business who employs an apprentice or trainee until 30 June 2022.

And businesses can take advantage of four hours of free one-on-one coaching support — double the current amount — through the Government’s expansion to the Digital Ready for Business program.

TAX RELIEF

Nationally, most Australians can also expect a tax cut after the federal government brought forward the second stage two of their tax cuts.

The following income brackets can expect these rebates: $21,886 – $45,000: up to $1080; $45,001 – $90,000: $1080; $90,001 – $120,000: up to $2430 and $120,000+: $2430.

The JobKeeper payment will be cut on January 4 from $1200 to $1000 for full-time workers and from $750 to $650 a fortnight for part-time employees. It will be axed completely by March 28, 2021.

While the JobSeeker payment will continue until March 2021, it will be cut from $250 to $150 a fortnight from January 1.

In February, 2021, eligible employers will be able to access the JobMaker Hiring Credit for each new job they create. It will give $200 a week to employers who hire anyone aged 16-30, and $100 a week for any worker aged 30-35.

The government’s pause on Centrelink debt recovery also continues until February, but for those living in Victoria or a bushfire declared area, the pause on repayments will remain in place until people are notified.

Pensioners, disability carers and veterans will receive their second $250 cash payment in March 2021 as part of the government’s support payments.

Commonwealth Seniors Health Card holders and pensioner concession cardholders are also eligible for the payment.

The government’s child care recovery package also continues and includes the relaxation of the activity test for families whose activity level has been impacted by COVID-19. It will be extended to April 4, 2021.

From today, the HomeBuilder program will offer eligible homeowners or first home buyers a $15,000 grant for building contracts for new builds and substantial renovations signed between today and March 31, 2021.

And from today, no one can apply for early access to superannuation. But workers who sign new enterprise agreements made on or after January 1 will get the right to choose their own super fund.

TRAVEL COSTS

Even through Australians still can’t holiday overseas — but they will be gouged more from today for passports as higher prices and new laws come into force.

The Department of Foreign Affairs and Trade confirmed to News Corp passport fees will rise annually on January 1 at the rate of inflation, making a 10-year passport for people aged 16 and over $301, compared to $298 last year.

A five-year passport for people aged under 16 or 75 and over will now cost $2 more at $152.

Emergency and replacement passports will cost $189, which is also $2 extra.

The priority processing fee will now be $220 and the overseas surcharge for adults and children will cost $1 extra at $135 and $66 each.

CHEAPER MEDICINE

In the health sector, two cancer drugs will become cheaper after being added to the Phamaceutical Benefits Scheme.

Darzalex, a drug that treats blood cancer, will cost $41.30 a month or $6.60 with a concession card. It would otherwise cost up to $160,000 per annum.

The drug allows patients with multiple myeloma, which is an incurable cancer of plasma cells found in bone marrow, to go for years before needing further treatment.

Australians living with non-small cell lung cancer will be able to access the drug Tagrisso on the PBS at the same prices. It would otherwise cost $88,000 a year.

Tagrisso is a ‘targeted therapy,’ which works on specific types of cancer cells where a specific mutation is present, to block their growth.

From January 1, families who suffer a stillbirth will receive $3,606.81 regardless of whether this is their first or subsequent stillbirth.

BUSINESS CHANGES

New insolvency regimes will be introduced which involve a new process for small businesses where financially distressed but viable companies can restructure their existing debts and continue to trade, with a faster and lower-cost liquidation process.

In response to the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the government has strengthened unsolicited selling (anti-hawking) provisions to prevent pressure selling, introducing a deferred sales model for add-on insurance products and making the handling and settlement of insurance claims a ‘financial service’.

EDUCATION REFORM

Under the government’s Job-ready Graduates package, changes come into force to

create up to 30,000 new university places and 50,000 new short course places in 2021, and provide more support for students in regional and remote Australia.

Student contribution amounts that must be paid to study law, accounting, administration, economics, commerce, communications, society and culture will increase to $14,500 a year.

Those studying dentistry, medicine and veterinary science will now pay more at $11,300 a year.

Other health, allied health, built environment, computing, engineering, statistics, surveying, science, environmental studies, pathology, visual and performing arts, professional pathway psychology and professional pathway social work courses will cost $7950 a year.

Agriculture, English, mathematics, education, clinical psychology, foreign languages and nursing courses will now cost $3950 a year.

Students already enrolled in these courses will have their contribution amounts grandfathered.

For 2021, the HELP loan limit will be $108,232. Those planning to study medicine, dentistry, or veterinary science, or eligible aviation courses the HELP loan limit will be increased to $155,448.

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Originally published as EXPLAINER: All the tax cuts, fee hikes and more in 2021