Unravelling the Government’s household stimulus package

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Following much debate, in February 2009 legislation was passed by parliament, introducing 5 lump sum bonuses targeted at low to middle income households and individuals.

Following is a brief outline of these bonuses:

Tax bonus

Eligibility for the tax bonus will broadly be based on your taxable income for the 2007/08 financial year.

So who is eligible?

You will be eligible to receive the tax bonus if:

Your taxable income for the 2007-08 financial year does not exceed $100,000;
You had a tax liability in the 2007-08 financial year. That is, you paid tax to the Australian Tax Office (ATO);
You have lodged your tax return for the 2007-08 financial year; and
You were an Australian tax resident for the 2007-08 financial year.

How much is the bonus and when will it be paid?

The bonus will be paid on a sliding scale based on your level of taxable income for the 2007-08 financial year, and is due to be paid in early to mid April 2009.

Your taxable income	Amount of bonus
Less than $80,000	$900
Between $80,001 and $90,000	$600
Between $90,001 and $100,000	$250

While you will only be eligible if you had a tax liability in the 2007-08 financial year, if you received a tax refund for the 2007-08 year (say, because the amount of PAYG tax paid was greater than your tax liability), you are still eligible.

In most cases, you will not need to do anything to receive your bonus. The ATO will either deposit the money in the same bank account that you nominated for your 2007-08 tax return, or they will send you a cheque. However, if your details have changed, you should contact the ATO.

Tip: If you have not lodged your tax return for 2007-2008, you should ensure you do so before 30 June 2009 to be eligible.

Single income family bonus

The single income family bonus is a payment of $900 to provide additional assistance for families with one main income earner.

You will be eligible to receive this bonus if you were receiving Family Tax Benefit (Part B) as of 3 February 2009 (or are later eligible to receive FTB B from this date) in respect to your family.

Back to school bonus

If you receive or are eligible to receive Family Tax Benefit (Part A) as of 3 February 2009, in relation to a child aged 4 to 18 (inclusive), you will be eligible to receive the lump sum Back to School bonus of $950 (per eligible child).

When will the single income family and back to school bonuses be paid?

If you are receiving your Family Tax Benefit payments on a fortnightly basis, Centrelink will be making a payment between 11 and 20 of March 2009.

If you have elected to receive your Family Tax Benefit payments as a lump sum at the end of the financial year, as long as you are eligible to receive Family Tax Benefit payments as at 3 February 2009, you will receive your bonus after you lodge your tax return for the year.

Training and learning bonus

In addition to the above bonus payments, an additional training and learning bonus may be available.

The training and learning bonus is a payment of $950 to support certain students with the costs of education and training. It will also be paid to some income support customers who are in significant hardship.

If you are eligible for the training and learning bonus, you can expect to receive your payment from 24 March 2009.

Farmer’s hardship payment

The Farmer’s hardship payment is a payment of $950 to support farmers and small businesses that have been affected by the drought.

If you were receiving an Exceptional circumstances relief payment, transitional income support, or farm help income support as of 3 February 2009, you will be eligible for the farmer’s hardship payment.

The Farmer’s hardship payment is due to be paid between 24 March and 6 April 2009.

What should I do if I require more information?

Please give us a call if you require further information or are unsure whether you are eligible for the above payments.

Important information

The information and advice in this article does not take into account your objectives, financial situation or needs. Therefore, before acting on the information or advice, you should consider its appropriateness to your personal circumstances. Although the information in this article was obtained from sources considered to be reliable, it is not guaranteed to be accurate or complete. This publication was prepared by AMP Financial Planning Pty Limited ABN 89 051208327. The information is current as at 13 March 2009 and may change over time.

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