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$1,080 tax bonus on cards for 10 million Aussies

·2-min read
Australian money background showing $100, $50 and $20 notes with a shallow depth of field.
(Image: Getty).

As many as 10 million middle- and low-income earners could receive a $1,080 tax offset this year as the Government mulls extending a major tax offset.

The low- and middle-income tax offset was due to end this year, meaning Australians were set to take home less pay in this financial year.

However, according to News Corp reports, the Government will extend the offset into the 2021-22 budget at a cost of around $7 billion.

The offset is delivered to people with taxable incomes between $48,000 and $90,000, and was already extended last year in a bid to mitigate the fallout of the COVID-19 pandemic.

Speaking on Sunrise, Energy and Emissions Reduction Minister Angus Taylor said that while the details of the Budget were up to Treasurer Josh Frydenberg to share, the Government was interested in lower taxes.

“We are a government of lower taxes, not higher taxes,” Taylor said.

“Taxes are a problem for jobs and for investment, so we like to have lower taxes as a government and always will.”

3.4 million taxpayer warning

The reports follow research from Bankwest Curtin Economics Research Centre which found that 3.4 million taxpayers would have lost out if the tax offset was removed.

It found that even with the tax cuts delivered last year, the removal of the offset would mean Australians within that income bracket would be no better off than they were in 2019-20.

A worker earning $80,000 currently has a net income of $63,013, however that would drop to $61,933 without the offset, the research found.

And for people earning $40,000, their net income would fall from $36,113 to $35,663.

The removal of the offset would also impact women more than men, the researchers found. Women would be set to pay an extra $1,506 tax on average over the next three years, while men would pay an extra $1,156.

“The withdrawal of the low and middle income tax offset from 2021-22 will disproportionately affect women, who will face an average increase in taxes paid of $502 per year from 2021-22 to 2023-24, relative to 2020-21,” they said.

“For men, the average annual increase in taxes paid will be lower, at around $385 per year.”

Treasurer Josh Frydenberg will hand down the Federal Budget on 11 May.

Image: Yahoo Finance
Image: Yahoo Finance
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