29561 (2024). Hon Barbara Edmonds to the Minister of Finance

29561 (2024). Hon Barbara Edmonds to the Minister of Finance: Are some people worse off in terms of nominal income as a consequence of Budget 2024?

Hon Nicola Willis: Corrected reply: The Treasury advises that a household receiving part-year beneficiary income, and little or no other taxable income, could receive a slightly lower end-of-year tax refund than they otherwise would have. Weekly benefit payments are not affected. The issue with some people receiving slightly lower end-of-year refunds arises, ultimately, from the fact that benefits are paid net of tax, and the interaction of this with the income tax scale. Treasury’s latest estimate, based on the Household Economic Survey, is that there could be 5,000 households in this category, receiving an average taxable household income of around $23,000 a year, including from benefits, and an average disposable household income of around $41,000. This estimate depends crucially on the household’s circumstances on the date of the Survey interview, which may not be representative of its circumstances over the whole tax year. The average impact is a smaller year-end tax refund equivalent to around $2 per fortnight. Is it likely also that some some of those individuals will also face lower tax obligations in future years as a result of our tax package. I was advised by the Treasury that it was unlikely this outcome could be avoided by designing the package differently. I would also note that households in this category could be in unusual circumstances that are unlikely to be experienced on an ongoing basis. In addition, a very small number of households, thought to be fewer than 200, could receive an average of $8 less per fortnight as they will now be eligible for abated Working for Families tax credits rather than the independent earner tax credit. This is an existing issue with Working for Families and the Government has sought advice with a view to ensuring households are not unfairly disadvantaged.