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More pain on way for pensioners as Govt slugs benefits from July 09



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"The Rudd government will hit 17,000 pension recipients with reduced benefits from July next year, despite the Prime Minister saying that The government knows that there is still much, much more to be done in helping Australian families dealing with cost-of-living pressures," said Senator Ron Boswell today.

"How will reducing the benefits of those least able to afford it help them to deal with cost of living pressures?"

Senator Boswell asked the government in Question Time today whether 17,000 pensioners would suffer reduced benefits from July 09.

"Senator Evans' answer confirmed that the government was tightening eligibility and that there would be people who would miss out."

Senator Evans said "We accept that a couple of those measures have had that impact—that some people who were previously entitled are no longer entitled. "

"In fact, recently released answers to my questions in Estimates show that the inclusion of salary sacrifice superannuation contributions in adjusted taxable income is expected to lead to reduced benefits for around 74,400 families receiving Family Tax Benefit and 18,800 families in receipt of Child Care Benefit from 1 July 2009. Around 17,000

individuals in receipt of pension and allowance payments are estimated have reduced benefits from 1 July 2009."

"Government answers to my questions in Estimates also advise that the inclusion of net investment losses in adjusted taxable income is expected to lead to reduced benefits for around 20,100 families receiving Family Tax Benefit and 10,700 families in receipt of Child Care Benefit from 1 July 2009."

"The Rudd government have portrayed themselves as the heroes of families doing it tough but they are actually going to slug their benefits in less than a year's time."

"The Treasurer claimed yesterday that we stand for providing relief to those on average incomes, when in reality they already have a plan in place to claw back benefits like the Seniors Health Card and Family Tax and Childcare Benefits from tens of thousands of families come July next year."

"Tighter targeting of benefits was signalled in the budget papers but the government has been very slow in coming up with hard data on how many will be affected and in what programs."

"It shows just how hollow the government rhetoric on helping families is. From July 09, many pensioners and families will receive reduced benefits for a host of payments including:- Family Tax Benefit B, Family Tax Benefit A, Seniors Health Card, Senior Australians Tax Offset, Veteran Affairs Support, Child Care Benefit, Baby Bonus, Income

Support and Abstudy."

ENDS Attached: Answer to Question on Notice - Senate Committee on Economics - 3-5 June 08

Media Enquiries — 07 3001 6150 02 6277 3046 www.

Senate Standing Committee on Economics

ANSWERS TO QUESTIONS ON NOTICE

Treasury Portfolio

Budget Estimates 3-5 June 2008

Question: bet 64

Topic: Government Assistance Programs

Hansard Page: E13-E14

Senator Boswell asked:

Senator BOSWELL —I have some more questions. The new adjustable tax income will be used to assess eligibility for a range of government assistance programs. What do these include?

Ms Furnell—A range of payments are through the transfer system such as the— Senator BOSWELL —Can you enunciate all the programs? Ms Furnell—I can provide you with some information and I hope these will be complete. The dependency tax offsets include income support payments paid under the Social Security Act, so that is a range of income support payments—parental

income test on youth allowance and ABSTUDY, family tax benefit parts A and B, the childcare benefit, child support, the Assistance for Isolated Children scheme, exceptional circumstances relief payments, exceptional circumstances interim income

support, family help income support payments and income test for residential aged carers. That is the advice I have. Senator BOSWELL —For each of these programs, how many working families will lose their eligibility or receive a lesser amount of assistance as a result?

Ms Furnell—I do not have estimates on any distributional impact on those specific programs. I can check to see what information is available. Senator BOSWELL —Again, I hope I do not receive this on 1 August. I would like to receive it today. I would appreciate it if someone could get on the phone and

request an answer to the questions that have been asked, and you can come back to us. Is that possible? Ms Furnell—I will check.

Answer:

The inclusion of salary sacrifice superannuation contributions in adjusted taxable income is expected to lead to reduced benefits for around 74,400 families receiving Family Tax Benefit and 18,800 families in receipt of Child Care Benefit from 1 July 2009. Around 17,000 individuals in receipt of pension and allowance payments are estimated have reduced benefits from 1 July 2009. It is not possible to provide further

statistically valid breakdowns of this estimate.

The inclusion of net investment losses in adjusted taxable income is expected to lead to reduced benefits for around 20,100 families receiving Family Tax Benefit and 10,700 families in receipt of Child Care Benefit from 1 July 2009. It is not possible to

provide further statistically valid estimates of the impact of this change.

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