Money Minute – May 29 2017 Benefits Shake-Up

May 29 2017 – Benefits shake-up

Ross Greenwood: A new report this morning shows that our government is trying to reduce the amount spent on social welfare each year.

Remember, these charts I’ve shown you in the past.

The total amount of money the government spends each year, $464 billion – well, a third of that goes to social welfare and also security.

But of the total $440 billion the government collects in taxes this year, around $204 billion – more than half comes from PAY Taxpayers.

Well, this report from ANU center for Social Research and Methods, for The Australia, shows that the number of net tax paying households, which is getting close to 50-50, is now predicted to rise to 60 per cent by 2020.

Now, a few reason…

A rising incomes pushes then into tax brackets, so they’re paying more tax.

Crackdown on social security; and increasing tax for those with large super fund balances.

Those are a few things.

There is no doubt when it comes to handing out money, as well as welfare, we are an extremely generous nation.

I’ll take you through the Family Tax Benefits.

With the Family Tax Benefit B, you qualify if the primary wage earner has a salary of $100,000 or less.

The Second Family member is key.

If their income is below $5,500 – give or take – they get the maximum benefit of $4,400 a year if the youngest child is under 5, $3186 a year if they’re between 5 and 18.

Now, if your income is higher, the benefit is reduced.

Now, once that second income goes above, say $21,000, or $27,000 –  depending on the age of your kids, you will lose entirely that benefit.

But it’s not all bad.

Family Tax Benefit A is more generous.

The maximum rate, $5493, with kids between 0 and 12. Its $6927 for kids aged between 13 and 19. And $1529 if they are an approved care organisation.

Then there are supplements – energy supplements, multiple birth allowances, rent assistance.

To gain the maximum payment, your income needs to be $51,903 or less.

But even some families with income of more than $200,000 a year, with three kids between 13 and 15 or secondary students between 16 and 19, they still get a sliver of money from the government.

You see what I mean about benefits and generosity?

Karl, Lisa, this is the whole issue of social welfare in Australia – who pays and who does not?

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