KEY HIGHLIGHTS
- Major money changes hit ATO, Centrelink, Medicare and super from 1 January 2026
- Cheaper medicines, higher Centrelink payments and tighter tax compliance ahead
- Some Aussies gain instantly, others need to prepare now to avoid surprises
A stack of quiet but powerful money changes kick in on the same day — affecting Centrelink payments, healthcare costs, tax compliance and super rules.
For most Aussies, this isn’t about paperwork.
It’s about weekly cash flow, pharmacy bills, and what lands in your super account.
Centrelink Payments Get a New Year Boost
If you’re a student, trainee or carer, January usually means one thing: indexation.
Centrelink adjusts several payments at the start of the calendar year to keep up with inflation — especially essentials like rent, food and transport.
This applies automatically. No forms. No calls.
Who benefits most?
- Youth Allowance (students & job seekers under 25)
- Austudy
- Carer Allowance
For students living away from home, the increase may not sound massive — but every extra dollar helps when rent and groceries keep climbing.
January 2026
| Category | 2025 Rate / Rule | From 1 Jan 2026 | What It Means |
|---|---|---|---|
| PBS co-payment (general) | A$31.60 | A$25.00 | Cheaper medicines instantly |
| Youth Allowance (away) | A$670.30 | A$684.20 (est.) | Automatic rise |
| Carer Allowance | A$159.30 | A$162.60 (est.) | Automatic rise |
| Medicare Safety Net | A$2,600.00 | A$2,699.10 | Threshold reset |
| Super Guarantee | 12% | 12% | No increase |
| Low tax bracket | 16% | Prep for 15% (July) | Withholding check |
Cheaper Medicines Start From New Year’s Day
This one hits fast — and helps almost everyone.
From 1 January 2026, the maximum PBS co-payment for general patients drops to A$25.00.
That’s the lowest it’s been in nearly 20 years.
If you or someone in your household takes regular medication, the savings add up quickly.
Two scripts a month?
You’re looking at over A$150 saved per year.
No action needed. The lower price applies automatically at the pharmacy.
Medicare Safety Net Resets (And Why It Matters)
Medicare Safety Net thresholds reset every calendar year.
Once you hit the threshold, Medicare covers a higher share of out-of-hospital costs like:
- Specialist visits
- Scans and diagnostic tests
From January 1, the new indexed threshold applies, meaning:
- Families hit support more predictably
- Big medical years become slightly less painful
Tip: start tracking out-of-pocket costs early if you expect high medical bills in 2026.
ATO Tightens the Screws Ahead of Payday Super
Super payments aren’t changing yet — but enforcement is.
The 12% Super Guarantee stays locked in for 2026.
No increase. No decrease.
But the ATO is using January as a compliance starting line.
What’s happening?
- Businesses are being pushed to prepare for Payday Super (mandatory from July 2026)
- Payroll systems are under closer review
- Undeclared income and side-hustles are firmly on the radar
If you’re a small business owner, January is the month to audit your payroll software.
Waiting until July could be expensive.
High-Balance Super Gets Extra Attention
If your total super balance exceeds A$3 million, 2026 is a key planning year.
The government’s Better Targeted Superannuation Concessions are edging closer.
This introduces an extra 15% tax on earnings tied to balances above A$3 million.
While calculated on a financial-year basis, asset values around January 2026 matter for future planning.
Most Aussies won’t be affected — but for those who are, this is not something to ignore.
Big Business Rule Changes (Indirect, But Important)
From January 1, Australia’s merger rules change.
Large corporate acquisitions now require mandatory ACCC approval — no more voluntary notifications.
This targets:
- Supermarkets
- Digital platforms
- Market-dominating players
You won’t feel this immediately, but the goal is simple:
less market power, fewer sneaky price hikes over time.
What You Should Do Before January Ends
- Centrelink recipients: Check MyGov details are up to date
- Regular pharmacy users: Expect lower PBS prices automatically
- Medical households: Track expenses from Day 1
- Small businesses: Upgrade payroll systems now
- High-balance super holders: Review strategy early
No need to panic.
But doing nothing could cost you later.
Frequently Asked Questions
Do I need to apply for Centrelink increases in January?
No. Centrelink indexation is automatic. As long as your reporting is current, the higher rates apply from your first payment after 1 January 2026.
How much will cheaper PBS medicines save me?
The maximum price drops A$6.60 per script. Two monthly prescriptions could save A$150+ per year.
Is the Super Guarantee increasing again in 2026?
No. The Super Guarantee reached 12% in July 2025 and stays at that level throughout 2026.
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