Federal Budget 2014/15 - Health & Education
$7 fee for going to the doctor
Effective: 1 July 2015
Perhaps one of the most heated debates concerning the Federal Budget has been around the introduction of co-payments and increased prescription costs. The concern is that these costs will impact low income families and individuals the most, either preventing them from seeking out medical care or forcing them to hospital instead.
The key points of these changes include:
- A patient contribution of $7 will apply for visiting a doctor, out of hospital pathology and diagnostic imaging services. Concession cardholders and children under 16 will not pay the fee until they reach 10 visits in a year.
- $5 of the $7 fee for will go into the Medical Research Future Fund (see below). The fund will provide an ongoing funding stream for medical research.
A new Low Gap Incentive will replace bulk billing incentives for providers of these services. The Low Gap Incentive will be paid to providers where they provide services to patients with concession cards or children under 16 years of age and only charge the $7 patient contribution - for the first 10 services in a year, or where they charge no patient contribution - for additional services in that year.
Pharmaceutical Benefits Scheme (PBS)
Effective: 1 January 2015
The level of co-payments for medicines on the PBS will increase from 1 January 2015:
- General payments - Co-payments will increase by $5 to $42.70 (from $37.70)
- Concession patients - Co-payments will increase by 8o cents to $6.90 (from $6.10).
The PBS safety net threshold will also increase from 1 January 2015.
- General safety net threshold – increase by 10% each year for 4 years
- Concessional safety net threshold – increase by "the cost of two prescriptions each year."
It's important to note that these increases are in addition to the existing annual indexation for co-payments and the safety net thresholds.
Medical Research Future Fund
Effective: 1 January 2015 MRFF / 1 July 2015 funding
The Medical Research Future Fund (MRFF) will provide a sustained funding stream for medical research, with payments from the MRFF expected to reach around $1.0 billion per year from 2022/2023.
The Government will provide $276.2 million over three years from 1 July 2015 in net earnings from the MRFF to fund critical medical research in the medium to long term.
Universities able to set their own fees
Effective: 14 May 2014 for 1 January 2016
The cost of tertiary education will go up with Universities and other educational providers able to provide their own fee structure (or 'contribution' structure as they call it).
The current caps on student contributions that higher education providers are able to charge will be removed from 1 January 2016 for students who accept an offer to commence a course from 14 May 2014.
Higher education providers will be responsible for setting their own course fees. In line with this change, the Government is cutting back funding through the Commonwealth Grant Scheme for higher education courses at diploma, advanced diploma, associate degree and bachelor degree level (where the higher education provider is registered with the Tertiary Education Quality and Standards Agency and the course has been accredited).
In addition, the Government will reduce research training scheme funding from 1 January 2016 and allow higher education providers to charge student contributions for higher degrees by research (including doctoral and masters degrees).
Removing the loan fee for FEE-HELP
The Government will remove the 25% loan fee applied to FEE-HELP loans for fee-paying undergraduate courses and 20% loan fee applied to VET FEE-HELP loans for eligible full fee-paying students in higher level vocational education and training courses.
Changes to student loan programs
Effective: From 2015/2016
The HECS-HELP benefit that was intended to provide an incentive for graduates of particular courses to take up related occupations or work in specified locations will end from 2015/2016.
Income threshold change
While the Higher Education Loan Programme (HELP) will continue, the income threshold for payment of HELP debts commencing in 2016/2017 will reduce. A new minimum threshold will be established for the repayment of HELP debts, set at 90% of the minimum threshold that would otherwise have applied in 2016/2017. The new minimum threshold is currently estimated to be $50,638 in 2016/2017. A new repayment rate of 2% of repayment income will be applied to debtors with incomes above the new minimum threshold.
Plus, annual indexation applied to HELP debts will be adjusted from the CPI to a rate equivalent to the yields on 10 year bonds issued by the Australian Government, capped at 6.0% per annum, from 1 June 2016.
Trade support loans
The Trade Support Loans Programme provides loans to apprentices undertaking a Certificate III or IV qualification that leads to an occupation on the National Skills Needs List.
The loans will be provided at concessional interest rates and capped at $8,000 in the first year of the apprenticeship, $6,000 in the second, $4,000 in the third and $2,000 in the fourth. Tradies will need to start repaying loans once their income exceeds $53,345 in 2014/2015.
The Government has also flagged that it is considering letting the private sector administer the loans from 2015/2016.
For more information about how the Federal Budget affects health and education, please contact us on 02 9957 4033 or via our contact form
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Last updated May 2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.