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Tuesday, 11 February 1986
Page: 78

(Question No. 169)


Senator Maguire asked the Minister representing the Treasurer, upon notice, on 27 March 1985:

(1) How much private weekly income can (a) a single pensioner; (b) a married pensioner couple (per person); (c) a single unemployment benefit recipient; and (d) a married unemployment benefit recipient, earn before their total weekly income (pension or benefit plus private or earned income) is subject to income taxation.

(2) If the respective amounts for (1) (a), (b), (c) and (d) above differ, why is this the case.

(3) If the amounts of private or earned income differ, does the Government plan to take appropriate measures to obtain some standardisation in the treatment of different categories of social welfare recipients.


Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

(1) The following table shows the maximum level of private income which could have been derived in 1984-85 before being subject to income tax.

Single

Married

$ p.w.

$ p.w.

Age pension...

14.80

30.00

(a)

34.90

(b)

Unemployment benefit (no children)...

10.90

(c)

0.90

(d)

(a) Per person; assumes spouse has no other income.

(b) Per person; assumes spouse has equal amount of other income.

(c) Over 18 years of age.

(d) Person receiving unemployment benefits; assumes spouse has no other income.

(2) The taxation arrangements are designed to ease the tax burden on people wholly or largely dependent on pensions or benefits and reflect differences in the levels of pension or benefit paid to different categories of person according to need. The amounts referred to in part (1) consequently differ among categories of recipients for a variety of reasons, including:

(i) the rate of the pension or benefit (e.g. the rate of unemployment benefit for a single adult without dependants is lower than the rate of the single age pension);

(ii) for married pensioner couples a separate statutory entitlement to pensions is available for each partner, with the result that the married rate of payment is split between the spouses; payments to beneficiary couples, however, are combined and made payable only to the person claiming benefit;

(iii) whether they have children (e.g. an unemployed married couple with children could claim a maximum dependent spouse rebate of $1,030 while for those without children the maximum rebate is $830); and

(iv) the level of special taxation rebates applying to pensioners and beneficiaries (e.g. in 1984-85 an age pensioner could claim a rebate of $250 which shaded out at 12.5 per cent; unemployment beneficiaries could claim a rebate of $50 for a single person and $75 for a married couple, also shaded out at 12.5 per cent).

(3) The range of factors mentioned in (2) argues against complete standardisation of the amounts of private income different categories of pensioners and beneficiaries can receive before they become liable for tax. For taxpayers generally the tax thresholds for single and married taxpayers can differ and there is no reason why that should not also be so in the case of pensioners or beneficiaries. The Government is aware of the need to take into account the way the tax and social security systems interact in considering changes to either system.