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Family Tax Credit

Balanced against the changes to the tax thresholds are changes to the Family Tax Credit. The abatement threshold will decrease from $36,350 a year to $35,000 and the abatement rate will increase from 22.5 cents to 25 cents in the dollar. So if you receive the Family Tax Credit, the amount of Family Tax Credit you receive will start to decrease sooner and by more as your earnings increase.

The Family Tax Credit itself will increase for the first child under 16 by $9 a week, and for the other children under 16 by between $18 and $27 a week each.

Independent Earner Tax Credit

The Family Incomes Package gets rid of the Independent Earner Tax Credit (IETC). Less than a third of eligible people actually claim it during the year and increasing the $14,000 tax threshold to $22,000 largely compensates those who were receiving the IETC.

For some middle income earners, the combination of the new tax thresholds and disappearance of the IETC results in an annual tax saving equivalent to the value of a flat white and big brekkie for two or a couple of mid-size grocery runs, depending on whose calculator you use.

Housing Assistance

After staying at the same levels for the last decade the Accommodation Supplement will increase. The Supplement assists beneficiaries, pensioners and lower income working families to meet rental, board or mortgage payments. For smaller households it will increase by $25 to $75 a week and for larger households by $40 to $80 a week. Increases will be geared to recognise where people live in areas where housing costs have increased most.

Students who receive the Accommodation Benefit will see this increase by up to $20 a week.