Have you heard about a bunch of benefits people are getting from Tuesday night's federal budget?
In case you missed it, Treasurer Jim Chalmers spoke about a few measures that could put extra money in your pocket, including:
- A $300 energy bill rebate for every household
- The stage 3 tax cuts
- Changes to student debt
From all the chatter about this, it might sound like you'll be getting a cash payment from the government in the coming days.
But it doesn't work like that.
So don't expect a cheque in the mail or money transferred directly into your bank account.
Here's what you need to know about rebates, credits and tax cuts.
How do I get the $300 energy rebate?
It'll automatically be taken off your power bill.
But your next bill won't be $300 cheaper, because the rebate is being applied quarterly.
Who is eligible for the $300 rebate?
The rebate will be credited to every Australian household's power bill.
The word "household" is key here.
The rebate will only be applied to each household — not every person who lives in that household.
It's not a $300 payment that every person will receive individually.
What are the stage 3 tax cuts?
When you hear someone talking about "stage 3 tax cuts", they're referring to changes to Australia's tax brackets and taxation rates.
And these changes will result in a saving for all Australians who earn above the tax-free threshold — because it'll mean paying slightly less tax.
You can use the calculator below to work out how much you'll save in tax under the changes:
But it's important to remember that you won't be getting this money as a separate payment.
How will I get my tax-cut money?
From July 1, the Australian Taxation Office will take less money from the take-home pay of all taxpayers.
That means you'll keep more of the money you earn.
In most cases, you don't have to do anything to receive the tax cut, it will happen automatically.
What are the new tax brackets?
These will be the new tax brackets as of July 1:
- Earn up to $18,200 – pay no tax
- Pay a 16 per cent tax rate on each dollar earned between $18,201–$45,000
- Pay a 30 per cent tax rate on each dollar earned between $45,001–$135,000
- Pay a 37 per cent tax rate on each dollar earned between $135,001–$190,000
- Pay a 45 per cent tax rate on each dollar earned above $190,000
Will I get a HECS refund?
The federal government says it is back-dating changes to student debt indexation to last year.
Back then, the indexation rate was 7.1 per cent.
But under these changes, it'll be lowered to 3.2 per cent.
If you've still got a HECS debt, the difference will be taken off your current debt.
And if you completely paid off your debt last year, you'll either get that difference back in your tax refund or it'll be subtracted from whatever you owe the ATO after filing your tax forms.
Editor’s note (15/05/2024): An earlier version of this story incorrectly stated the tax cuts would be applied either through taxpayers paying a reduced debt to the ATO or receiving an increased refund at the end of this financial year. This is not the case. The tax relief will be applied through all taxpayers receiving more of their take-home pay each payday ie the ATO taking less tax from July 1 this year.
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