Low Income Tax Offsett
10 May 2011
Professor Michael Dirkis says the Federal Government's boost to low income workers could leave many with a new tax debt.
According to reports, the government will bring forward almost $1.37 billion in annual tax breaks to the lowest-paid in the community in tonight's budget.
Instead of waiting until the end of the financial year to get their Low Income Tax Offsett, worth up to $1500, low-income earners will receive 70 per cent of the payment as a weekly tax cut.
Speaking to The Australian, Professor Dirkis says the change could leave some of the 6.5 million workers who receive the rebate with a tax debt when it started cutting out once annual earnings topped $30,000.
"Effectively, by giving some money now, if your circumstances improve you could end up with the situation of having to pay that back at tax time, the same sort of risk that used to exist when the Family Tax Benefit was introduced."
Contact: Greg Sherington
Phone: +61 2 9351 0202