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 four years' worth of tax cuts and other benefits to help families and pensioners to make ends meet. In addition, a Schoolkids Bonus will replace the Education Tax Refund and be paid directly to eligible recipients as a guaranteed payment rather than a tax refund. A new Supplementary Allowance will help the unemployed, young Australians and parents with young children to help them meet the costs of essential bills with the first payment commencing in March 2013.

Estimated improvement in the real disposable incomes and net tax thresholds of different household types
from 2007-08 to 2012-13 (a)

Table: Estimated improvement in the real disposable incomes and net tax thresholds of different household types from 2007-08 to 2012-13
  • (a)The average weekly ordinary time earnings (AWOTE) for full-time employees is used as the average wage.
    Disposable income is the sum of private income and government cash transfers less net tax paid.
    The net tax threshold is the private income above which taxes paid exceed cash benefits received.
    Families with children have two children, aged 3 and 8 years.
    Families hold Private Health Insurance cover.
  • (b)Inclusive of the Clean Energy Advances which are paid to assist households with the impact of the carbon price in 2012—13.
  • (c)The spouses of single income couples without children are 60 years old. Consequently, their partners may be eligible for the Dependant Spouse Tax Offset.
  • (d)The hourly rate of child care is $5.70 per hour in 2007—08 and $7.30 per hour in 2012—13. For the calculation of real disposable incomes, the younger child is in long day care for 2 days, 4 days and 5 days per week for families earning 100% & 33%, 100% & 67% and 167% & 100%, respectively. For the calculation of net tax thresholds, the hours of care are consistent with the income of the second earner. The older child is not in care.
  • (e)In calculating net tax thresholds, income is assumed to be from investments which earn a rate of return, equal to the current deeming rates. The calculations include the effects of the assets test.