Legal Alert: Employment Law Cost Changes Commencing 30 June and 1 July 2026

Legal Alert: Employment Law Cost Changes Commencing 30 June and 1 July 2026

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Employment Law Cost Changes Commencing 30 June and 1 July 2026

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3 min read

2 Jul 2026

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    Key Takeaways
  • ࠂ
    Employers need to prepare for several significant employment law changes taking effect from 30 June and 1 July 2026.
  • ࠂ
    Payroll systems, superannuation processes and employee pay rates should be reviewed to ensure they reflect the new legal requirements.
  • ࠂ
    Health and pharmacy employers face award-specific wage increases, while all employers need to comply with new superannuation and minimum wage obligations.
  • ࠂ
    Taking proactive steps now can help minimise the risk of underpayments, penalties and workplace disputes.

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A number of significant employment law cost changes commence from 30 June and 1 July 2026. These reforms affect employer obligations relating to superannuation, minimum wages, modern awards and Paid Parental Leave.

Now is the time to ensure your payroll systems, employment practices and workplace policies are up to date.

30 June 2026 

Wage increases to awards found subject to gender-based undervaluation

As part of the Fair Work Commission's gender undervaluation reforms, the following increases take effect from the first full pay period commencing on or after 30 June 2026:

  • The first of five staged wage increases under Health Professionals and Support Services Award 2020
  • The second of three phases of wage increases under the Pharmacy Industry Award 2020
  • The first of three increases to minimum rates under the Children’s Services Award 2010

Employers should:

  • Review relevant award/s and identify confirm new rates. The Fair Work Ombudsman Pay and Conditions Tool can provide useful guidance: P.A.C.T Pay Calculator - Find your award
  • Review employee classifications and confirm employees are correctly classified
  • Update payroll systems with to reflect minimum award rates

1 July 2026

Payday Super Begins

Superannuation contributions must now be received by an employee's nominated super fund within seven business days of each payday. This replaces the current quarterly payment system.

Employers should:

  • Review payroll and superannuation processes
  • Consider any cashflow impacts of more frequent super payments
  • Ensure payroll systems can meet the new payment deadlines

New Super Calculation Rules

The Super Guarantee will now be calculated using qualifying earnings (QE) rather than ordinary time earnings (OTE).Qualifying earnings include OTE, commissions and certain salary sacrifice amounts.

Employers should:

  • Review payroll systems
  • Review current remuneration arrangements, particularly commission-based or complex arrangements
  • Confirm superannuation is being calculated correctly

Expanded Paid Parental Leave

Eligible families with children born or adopted on or after 1 July 2026 will be entitled to 26 weeks (130 days) of Government-funded Paid Parental Leave, an increase from the previous entitlement of 24 weeks.

Employers should ensure their parental leave policies and employee communications reflect the expanded scheme.

Superannuation on Paid Parental Leave

The Australian Taxation Office will make superannuation contributions of 12% to current and future recipients of government funded paid parental leave, and to those who received government funded paid parental leave in the 2025-26 financial year.

Minimum Wage Increases

From the first full pay period commencing on or after 1 July 2026:

  • The National Minimum Wage increases to $26.44 per hour ($1,004.90 per week)
  • Modern award minimum wages increase by 4.75% 

Employers should also review salary and annualised wage arrangements to ensure employees remain better off overall.

Employers should:

  • Review employee pay rates
  • Update payroll systems
  • Check annualised salary arrangements remain compliant

What Employers Should Do Now

With multiple changes taking effect within a short period, employers should take the opportunity to review their workplace compliance obligations.

Key actions include:

  • Review award classifications and employee pay rates
  • Update payroll systems for the new wage and superannuation requirements
  • Ensure compliance with the new Payday Super regime
  • Review employment contracts and remuneration arrangements where necessary
  • Update parental leave policies and employee communications

Failure to comply with workplace laws can expose employers to underpayment claims, financial penalties and costly workplace disputes.

If you are unsure how these changes affect your business, require assistance reviewing your employment practices or believe you may have failed to comply with one or more of your workplace law obligations, the Employment & Industrial Relations team at Hillhouse Legal Partners can assist.

Please contact Robert Lamb on (07) 3220 1144 or robert@hillhouse.com.au.

Proposed Testamentary Trust Tax Changes: Government Signals Further Change

Proposed Testamentary Trust Tax Changes: Government Signals Further Change

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Proposed Testamentary Trust Tax Changes: Government Signals Further Change

Author: Robert Lamb

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3 min read

23 Jun 2026

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    Key Takeaways
  • ࠂ
    Recent reports indicate the Government intends to revise its proposed testamentary trust tax changes, however the legislation has not yet been introduced or passed by Parliament.
  • ࠂ
    Testamentary trusts remain an important Estate Planning tool, with flexibility continuing to be a key feature of a well-structured Will.
  • ࠂ
    There is no need to make immediate changes based on media reports alone, but if you have concerns about your Estate Plan, now is an appropriate time to seek advice.

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When the Federal Budget was handed down in May, the Government announced a proposal to introduce a minimum 30% tax rate on income from discretionary trusts, including discretionary testamentary trusts established from 1 July 2028.

At the time, we shared in our recent Federal Budget Proposal article that the proposal represented a significant potential change to Estate Planning and that, importantly, the legislation had not yet been introduced or passed by Parliament.

Since then, the Government has indicated it intends to revise the proposal. It has been widely reported that discretionary testamentary trusts established for genuine Estate Planning purposes will no longer be subject to the proposed 30% minimum tax. Instead, the proposed minimum tax is expected to only apply where income from those trusts is distributed to a corporate beneficiary.

While this is welcome news for many Australians, it is important to remember that the proposed legislation has not yet been finalised or passed by Parliament. The detail of the final law, including any exclusions and how they will operate in practice, remains uncertain.

What does this mean for your Estate Plan?

Our advice remains largely unchanged.

Testamentary trusts continue to be an important Estate Planning tool. They can provide significant benefits including:

  • Asset protection
  • Flexibility in administering inheritances
  • Protection for vulnerable beneficiaries, and
  • Tax planning opportunities where appropriate

The recent developments reinforce the importance of building flexibility into Estate Planning rather than reacting to proposals that may ultimately change before becoming law.

Should you change your Will?

For most people, there is no immediate need to amend an existing Will solely because of these announcements.

However, if you have questions about how the proposed changes may affect your Estate Plan, or you are considering updating your Will for other reasons, now is an appropriate time to seek advice.

As the legislation is still being developed, we are not yet able to provide definitive advice on how the final laws will affect individual Estate Plans. Once the legislation is settled, we will be able to provide more specific recommendations where required.

We're here to help

Our Wills & Estates team is here to discuss the proposed changes and answer any questions you may have about your Estate Planning arrangements. To arrange a confidential discussion, please contact Robert Lamb, Tracy Pratt or our Wills & Estates team on (07) 3220 1144 or send our team an email via email@hillhouse.com.au.

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A Judgment Isn’t Enough: Can the Debtor Actually Pay?

A Judgment Isn’t Enough: Can the Debtor Actually Pay?

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A Judgment Isn’t Enough: Can the Debtor Actually Pay?

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3 min read

16 Jun 2026

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    Key Takeaways
  • ࠂ
    A judgment confirms that money is owed, but it does not guarantee payment.
  • ࠂ
    Before commencing, it is important to consider whether the debtor has assets or income that any judgment can be enforced against.
  • ࠂ
    Legal costs are only partly recoverable in most cases, and a costs order will rarely if ever cover all costs incurred.
  • ࠂ
    An effective debt recovery strategy considers both the strength of the claim and the likelihood of recovering the debt and your legal costs.

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Further to our previous article on the options available when chasing an unpaid invoice, one of the most important questions a creditor should ask before commencing legal proceedings is whether the debtor actually has the ability to pay. A successful court outcome is only part of the equation. The real issue is whether the debt can actually and practically be recovered.

Even where a creditor obtain judgment confirming that money is owed, payment is not automatic. If the debtor does not pay voluntarily, further enforcement action may be required to recover the money and your legal costs.

Judgement Is Not Recovery

It is understandable to assume that obtaining judgment means the matter is effectively over. However In reality, a judgment simply confirms that the debt is legally due.

If the debtor has no assets, no income, or no practical source of funds, enforcement may be futile for a host of reasons.

Therefore a strategic and cost-benefit analysis of the question even if we “win” the court case can the money ultimately be obtained should be undertaken before commencing court proceedings. Legal fees, court filing fees, and enforcement costs can quickly outweigh the amount in dispute, particularly if the debtor is potentially insolvent or difficult to locate.

Costs and Commerciality 

Legal costs are another important consideration.

You have to assume you will be out of pocket even if you “win” the case and the person pays.

Even if you are successful in a court case and obtain a costs order, those costs are usually assessed on a standard basis. This generally results in recovery of only about 50–60% of the actual legal fees actually incurred.

An indemnity costs order is more favourable but it is typically reserved for exceptional circumstances where the other party has acted unreasonably, improperly, or in a way that justifies a more significant costs order. Even in those cases, recovery may be closer to 70–80% of actual legal fees, and sometimes more depending on the circumstances.

Accordingly, the existence of a strong claim does not necessarily mean litigation is commercially worthwhile. The likely recovery outcome should always be weighed against the anticipated legal costs.

Assessing the Debtor's Position

Before commencing the debt recovery process or court proceeding, creditors should make reasonable enquiries into the debtor’s financial circumstances. Some practical steps include:

  • Conducting a land title search to determine whether the debtor owns real property;
  • Do a company search (if the debtor is a company) or a bankruptcy search (if the debtor is a natural person)
  • Identifying whether the debtor is employed, which may assist with enforcement through a redirection of earnings
  • Investigating whether any third parties owe money to the debtor, which may support a redirection of debts
  • Considering whether there are other assets, guarantees, or corporate structures that may improve recovery prospects

These enquiries can provide valuable insight into whether legal proceedings are likely to result in a meaningful recovery or whether the better commercial decision is to avoid further costs.

Enforcement After Judgment 

If the debtor still fails to pay after judgment, the law provides a number of enforcement options. These include enforcement warrants for seizure and sale of property, redirection of debts, and redirection of earnings, which can allow part of the debtor’s wages to be paid directly to the creditor.

In practice terms, a creditor may be able to enforce against property, redirect income at source, or recover money owed to the debtor by third parties.

However, all of these options depend on the debtor having assets, income or other recoverable funds available in the first place.

A statutory demand could also be issued against a Company debtor.

A Commercial Decision 

Sometimes the most commercially sensible decision is not to proceed if the debtor has little or no capacity to pay. Where there is no meaningful asset base, no employment, and no identifiable source of recovery, additional litigation may simply increase losses rather than improved the outcome.

That is why debt recovery should always be approached strategically. The key question is not simply whether judgment can be obtained, but whether it is likely to result in actual recovery.

A Measured Recovery Strategy 

A staged approach is often the most effective. Issue a demand first, assess the debtor’s financial position, and then decide whether proceedings are justified.

This approach helps ensure that legal action is supported by sound commercial judgment and that enforcement prospects are considered from the outset.

The law can provide a remedy, but it cannot guarantee payment. For creditors, the ultimate objective is not a judgment on paper, but money in hand.

How We Can Help 

If you are considering legal action to recover debt, our Litigation and Dispute Resolution team can help you assess both the strength of your claim and the practical prospects of recovery. Contact Hillhouse Legal Partners to discuss your circumstances and the most commercially sensible path forward.

Leaving Your Home to a Loved One: Understanding Life Interests and Rights to Reside

Leaving Your Home to a Loved One: Understanding Life Interests and Rights to Reside

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Leaving Your Home to a Loved One: Understanding Life Interests and Rights to Reside

Author: Tracy Pratt

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3 min read

9 Jun 2026

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    Key Takeaways
  • ࠂ
    Understanding the distinction between a life interest and a right to reside under a Will is important, as each arrangement carries different legal rights and obligations.
  • ࠂ
    Life interests and rights to reside can delay the final administration of an estate and should be carefully considered as part of the estate planning process.
  • ࠂ
    An effective estate plan should align with your family's long-term needs while minimising potential legal, financial, and administrative complexities.

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When preparing a Will, many people want to ensure a loved one can continue living in the family home after they pass away while ultimately preserving the property for children or other beneficiaries.

A common way to achieve this is through either a life interest or a right to reside. These arrangements are often used in blended family situations, where a surviving spouse or partner is provided with housing security while the property is ultimately passed to the testator's children or other intended beneficiaries.

Although these terms are sometimes used interchangeably, they have very different legal consequences.

What is a Right to Reside?

A right to reside generally gives a person the personal right to live in a property for a specified period or for the remainder of their life, without receiving any ownership interest in the property.

In most cases, the occupant cannot sell, transfer or rent out the property. The property will usually remain in the name of the executor or trustee of the estate until the right to reside comes to an end.

A right to reside can be an effective option where the intention is simply to provide accommodation without granting broader rights over the property.

What is a Life Interest?

A life interest provides broader rights than a right to reside.

A person who receives a life interest (known as a life tenant) is entitled to use and enjoy the property for the duration of their lifetime. Depending on the terms of the Will, this may include the right to receive rental income from the property or, in some circumstances, the ability to sell the property and reinvest the proceeds.

A life interest can provide greater flexibility while still ensuring the property ultimately passes to the beneficiaries nominated under the Will.

Key Differences

While both arrangements allow a person to occupy a property, the rights and responsibilities attached to each can differ significantly.

Importantly, both a life interest and a right to reside can delay the final administration of an estate for many years. This may affect beneficiaries who are waiting to receive their entitlement and can create ongoing responsibilities for executors and trustees.

There may also be taxation, asset protection and aged care implications that should be carefully considered before either arrangement is included in a Will.

Practical Considerations

Careful drafting is essential to ensure your wishes are clearly expressed and can be effectively carried out.

A Will should address matters such as:

  • Who is responsible for council rates, insurance and utility costs
  • Who is responsible for maintenance and repairs
  • Whether the occupant can rent out the property
  • What happens if the occupant permanently leaves the property
  • What happens if the occupant moves into residential aged care
  • When and how the arrangement comes to an end

Addressing these issues upfront can help avoid uncertainty and minimise the risk of disputes after death.

The Risk of Poor Drafting 

Poorly drafted life interest or right to reside clauses can create significant conflict between the occupant and the residuary beneficiaries.

Disputes often arise regarding responsibility for expenses, maintenance obligations, the extent of the occupant's rights, or when the arrangement should terminate. These disputes can result in unnecessary legal costs, delays and emotional stress for families.

In some cases, Court intervention may be required to determine whether a clause creates a mere right of occupation or a true life interest.

Planning Ahead

A life interest or right to reside can be a valuable estate planning tool when structured appropriately. However, these arrangements should always be considered in the context of your broader estate plan, family circumstances and long-term objectives.

Careful planning and tailored legal advice can help ensure your Will provides certainty for your loved ones while minimising the potential for future disputes.

How Can We Help

If you are considering a life interest or right to reside in your Will, or would like to review your existing estate planning arrangements, our Wills & Estates team can assist. Contact our team at Hillhouse Legal Partners on (07) 3220 1144 to discuss your circumstances and the most appropriate approach for your estate planning needs.

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5 Things to Know About the AML/CTF Reforms from 1 July 2026

5 Things to Know About the AML/CTF Reforms from 1 July 2026

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5 Things to Know About the AML/CTF Reforms from 1 July 2026

Author: Craig Hong 

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3 min read

4 Jun 2026

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    Key Takeaways
  • ࠂ
    From 1 July 2026, professional service providers like Hillhouse Legal Partners will be legally required to verify client identity and conduct additional compliance checks.
  • ࠂ
    Clients may need to provide documents such as photo ID, company or trust records and information about the source of funds for certain transactions.
  • ࠂ
    These checks apply to everyone and are part of a broader effort to help prevent money laundering, fraud and financial crime in Australia.

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From 1 July 2026, major new Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws will change how professional service providers, including law firms like Hillhouse Legal Partners, work with their clients across Australia.

For many people, this will mean providing more identification and information when working with lawyers, accountants, real estate agents and other advisers.

While the process may feel unfamiliar at first, these changes are designed to help protect Australia’s financial system, businesses and communities from criminal activity.

  1. More industries are now captured by the laws

Australia’s AML/CTF laws are expanding to include more industries and professions.

From 1 July 2026, these obligations will apply to businesses including:

  • Law firms like Hillhouse
  • Accounting firms
  • Real estate agencies
  • Trust and company service providers
  • Businesses involved in high-value transactions

These reforms will require firms to:

  • Verify client identity
  • Understand who owns or controls companies and trusts
  • Assess money laundering risks
  • Monitor certain transactions and activities
  • Report suspicious matters to AUSTRAC
  1. Clients will need to provide more information

From 1 July, Hillhouse clients may notice additional checks and requests for information when engaging our team for certain legal services and transactions.

Depending on the work involved, our team may request:

  • A passport or driver licence
  • Proof of address
  • Company, trust or SMSF documentation
  • Information about ownership or control of entities
  • Source of funds information for certain transactions

These checks will become a standard legal requirement across many industries and services.

Importantly, businesses and professional advisers, including law firms, may not be able to provide some services if the required information is not supplied.

  1. The laws are designed to target financial crime

AUSTRAC estimates more than $68 billion of crime-related money is laundered through Australia every year.

The reforms are designed to:

  • Help prevent organised crime and fraud
  • Reduce financial abuse and illegal activity
  • Protect businesses and consumers
  • Bring Australia in line with global AML standards

These laws are not aimed at everyday Australians doing the wrong thing.

They are designed to stop criminals from using legitimate businesses and professional services to move illegal money through the economy.

  1. The checks apply to everyone

Under the new laws, firms like Hillhouse will need to understand who they are acting for and assess whether certain transactions or arrangements present higher risks.

For example, where companies or trusts are involved, firms may need to identify the individuals who ultimately own or control those structures.

This does not mean there is a problem with a client or transaction.

The law requires firms to apply consistent checks across their client base.

  1. Hillhouse is preparing now to support clients

At Hillhouse Legal Partners, our team has been preparing for these reforms for some time to ensure we are ready to support our clients well before the changes commence.

Our focus is on making the process as practical, secure and straightforward as possible.

Hillhouse clients can expect:

  • Clear communication about what is required
  • Secure handling of personal information
  • Streamlined systems and processes
  • Support and guidance throughout the process

We understand these changes may raise questions for clients and businesses alike.

The Hillhouse team is here to help clients understand what the new obligations mean and how they may affect future transactions and engagements.

While the additional checks may feel like another layer of administration, they form part of a much broader effort to help protect Australia’s financial system and reduce financial crime.

For further guidance and information please visit www.austrac.gov.au.

If you have any questions please reach out to us at email@hillhouse.com.au

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