Appendix C

Helping households with the cost of living


The spending power of Australian households has increased over the term of this Government, thanks to three years of tax cuts and other benefits which help families to make ends meet. In addition, from 1 July 2011 the Education Tax Refund will be extended to include expenditure on school uniforms and an improved pension work bonus will mean that age pensioners can keep more of their income from work. The maximum rate of Family Tax Benefit Part A will also be raised by up to $4,208 per annum for secondary school students, from 1 January 2012.

Projected improvement in the real disposable incomes and the net tax thresholds of different household types from 2007‑08 to 2011‑12

Table: Projected improvement in the real disposable incomes and the net 
                                    tax thresholds of different household types from 2007‑08 to 2011‑12
  • (a) AWOTE is average weekly ordinary time earnings for full‑time employees.
  • (b) Disposable income is the sum of private income and government cash transfers less net tax paid. Tax estimates in 2011‑12 include the Temporary Flood and Cyclone Reconstruction Levy
  • (c) The net tax threshold is the private income at which taxes paid exceed cash benefits received.
  • (d) The spouses of couples without children are aged 40 years old or more. As such their partners may be eligible for Dependant Spouse Tax Offset.
  • (e) Families with children have two, aged 3 and 8 years. Families spend enough on eligible education expenses to claim the maximum Education Tax Refund in respect of the 8 year old, where eligible.
  • (f) For the calculation of real disposable incomes, younger child is in long day care, two days per week at $5.70 per hour in 2007‑08 and $7.20 per hour in 2011‑12; older child is not in paid care. For the calculation of net tax thresholds, the hours of care are consistent with the income of the second earner.
  • (g) For the calculation of real disposable incomes, younger child is in long day care, four days per week at $5.70 per hour in 2007‑08 and $7.20 per hour in 2011‑12; older child is not in paid care. For the calculation of net tax thresholds, the hours of care are consistent with the income of the second earner.
  • (h) For the calculation of real disposable incomes, younger child is in long day care, five days per week at $5.70 per hour in 2007‑08 and $7.20 per hour in 2011‑12; older child is not in paid care. For the calculation of net tax thresholds, the hours of care are consistent with the income of the second earner.
  • (i) For the calculation of net tax thresholds, income is assumed to be from investments which earns a rate of return equal to the current deeming rates.