LOW and middle-income earners are expected to benefit most from changes to tax and welfare payments starting this week.
From today low-paid workers will get an extra $17.10 a week as a result of the national wage decision. About 1.4 million workers get the extra 2.9 per cent, likely to flow on to others.
The tax-free threshold will jump from $6000 to $18,200.
New tax scales will give every worker earning up to $80,000 a tax cut – typically worth $300 a year. No one will pay more tax.
Other carbon tax compensation measures will permanently boost pensions and family tax benefits by 1.7 per cent. Worth up to $338 a year for single pensioners and up to $110 a child for families that receive Family Tax Benefit A, some of the increases have been paid up front. The rest will be paid fortnightly from next March. Families receiving Tax Benefit A will also get an extra $300 a child a year.
In Victoria first home buyers will enjoy a 20 per cent cut in stamp duty worth $5794 on the median-priced $565,000 home. The cut replaces the state-based boost to the first home buyer’s grant that expired last week. The $7000 Commonwealth first home buyer’s grant will remain in place.
Banks will be prevented from sending out unsolicited offers of higher credit card limits and will be required to use credit card payments to clear the highest interest debt from this week. Switching between banks will mean signing one form once.
People earning more than $97,000 who choose not to take out private health insurance will be hit with a Medicare levy surcharge of 1.25 to 1.5 per cent instead of the present 1 per cent. Those earning up to $83,000 will get a smaller private health insurance rebate. Those earning more than $129,000 will lose the rebate.
The Baillieu government yesterday announced the state’s average WorkCover premium would fall from 1.338 per cent of employer’s remuneration to 1.289 per cent.
Treasurer Kim Wells said this would benefit almost 60 per cent of Victorian businesses, saving them $57 million a year.
He said Victoria had the lowest premiums in the country and the lowest rate of workplace injury, death and illness.
With REID SEXTON
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