UPDATE: Starting January 1, 2026, millions of Australians will experience significant financial shifts as the cost of medicines drops while energy bills are set to rise. The maximum co-payment for prescriptions under the Pharmaceutical Benefits Scheme (PBS) will be reduced from $31.60 to $25, marking the lowest price since 2004 and saving Australians over $200 million annually.
The Albanese government announced these changes, which coincide with the automatic increase of several support payments. Youth Allowance and Austudy payments will see a boost of up to $17.60 every fortnight, while eligible families will receive an additional $26 every two years for children’s dental expenses. Starting January 5, families will also benefit from at least three days of subsidized childcare per week.
In a transformative move for healthcare, a new 24/7 nation-wide telehealth service, 1800MEDICARE, launches today. This service aims to alleviate pressure on emergency departments by providing round-the-clock access to registered nurses for Medicare card holders. Prime Minister Anthony Albanese stated, “There’s a reason the Medicare card is green and gold. We’re cutting the cost of PBS medicines because Australians shouldn’t have to worry about whether they can afford to fill a script.”
However, not all changes are beneficial. Households will soon face the end of Commonwealth energy subsidies by 2026, meaning families will pay the full price for energy bills for the first time in over two years. Economists warn that the end of these subsidies may contribute to prolonged inflation, despite their previous role in lowering the headline consumer price index.
The federal government is also tightening its renewable energy subsidy program. Originally projected to cost $2.3 billion, the scheme for home battery systems has ballooned to a $11.6 billion shortfall due to heightened demand. This is set to cap eligibility and potentially reduce the budget overrun to $4.9 billion.
Consumer advocacy expert Sally Tindall from Canstar highlighted that while the indexation of support payments will be welcomed by many, borrowers should brace for potential interest rate hikes. “If you have a mortgage, know that it might be a bumpy start to the year, with two major banks forecasting an increase to the cash rate in February,” she warned. “The cost of living has started to re-accelerate, impacting everyone, especially those on the lowest incomes.”
Additionally, starting today, a federal mandate requires grocers and petrol stations with annual turnovers exceeding $10 million to accept cash for in-person transactions under $500 between 7 AM and 9 PM. Treasurer Jim Chalmers emphasized, “It will ensure Australians who depend on cash for fuel and groceries aren’t left behind.”
As these changes take effect, Australians are urged to stay informed and prepare for the financial impacts in the coming weeks. The combination of lower medicine costs and rising energy bills could significantly reshape household budgets, making it crucial for families to plan accordingly.
Stay tuned for updates as this situation develops, and consider how these changes may impact you and your loved ones.
