Budget Aims To Help Ease The Costs Of Living
As promised in the days leading up to the Budget the Government has provided some key initiatives aimed at softening the recent increases in the cost of living.
One-Off Cost Of Living Tax Offset
The Government has announced a one-off increase to the low and middle-income tax offset (LMITO) to raise it from $1,080 to $1,500 for the 2021-22 financial year. An increase of $420.
This payment is claimed in your income tax return if you are eligible for the payment. You need to check the table below to see how much payment you are entitled to.
Currently, the Low and Middle Income Tax Offset is available to eligible individuals who are earning less than $126,000, with different tax brackets incurring different offset rates.
| Taxable Income | Tax Relief (including LMITO) |
|---|---|
| Up To $37,000 | Up to $675 |
| $37,001 to $48,000 | $675 to $1,500 |
| $48,001 to $90,000 | $1,500 |
| $90,001 to $125,999 | $420 to $1,500 |
One-Off Income Support Payment For Individuals
The Government will provide a one‑off, income tax‑exempt payment of $250 to approximately 6 million eligible people.
This payment will be paid automatically to all eligible pensioners, welfare recipients, veterans and eligible concession card holders in April 2022. This could result in eligible individuals earning more than $500 when combined with other existing indexation agreements on other support payments (such as the Age Pensions, Disability Support Pension and Carer Payment).
More Affordable Child Care Continues
The Government is committing $279 million in COVID‑19 support, $6.9 million in business continuity payments and support for services through Special Circumstances Grants in the Community Childcare Fund. As yet it is unclear as to the impact this will have on individual households.
Fuel Excise Cut In Half
Among the Federal Government’s announcements was the temporary action to cut fuel excise (the tax paid on fuel) to reduce this pressure on household budgets.
The fuel excise will be reduced by 50 per cent for 6 months, dropping the current excise on petrol and diesel from 44.2 cents per litre to 22.1 cents per litre. This should lead to an equivalent drop in the price of fuel.
