Tax refund 2021: $1080 government handout starts hitting bank accounts of TEN MILLION Australians
Taxpayers have begun to benefit from the $1080 government handout set to be given to more than 10 MILLON Australians this year.
Australian residents who earn under $126,000 annually are eligible to receive the Low and Middle Income Tax Offset (LMITO), which was passed by Parliament in June.
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Eligible Aussies who filed their 2020-21 tax return in the first week of July are now starting to see the returns of what Treasurer Josh Frydenberg labelled “tax cuts for low and middle-income earners”.
The Government estimates that more than 10 million Australians fall into the bracket of low and middle-income earners and is worth up to $1080 for individuals and $2160 for dual income couples.
All they need to do is file their their 2020-21 tax return, and the Australian Tax Office will take care of the rest.
Tax refunds generally take around ten days to hit bank accounts once processed.
“This is more money to spend in local businesses, giving them the confidence to take on an extra worker, offer an extra shift or buy a new piece of equipment,” Frydenberg and Finance Minister Simon Birmingham said in a joint statement earlier in July.
Extra $1080 in your tax refund
The LMITO, or Lamington as it has been dubbed, will come at a cost to taxpayers of $7.8 billion.
Extending the LMITO should boost the economy by $4.5 billion in 2022/23 – when the payments go into people’s pockets, according to budget papers released in May.
When Treasurer Josh Frydenberg delivered the budget in May, he touted the LMITO as “more of their money in their pockets to spend across the economy”.
“So tonight we go further, announcing that over 10 million low and middle income earners will benefit from a new and additional tax cut,” he said at the time.
But it’s not really a ‘tax cut’
H&R Block’s Director of Tax Communications Mark Chapman says he would warn against calling the extension a “tax cut”.
“This measure ensures that 10.2 million low and middle income Australians will not see a tax hike of up to $1080 next year,” he said.
“However, let’s call this what it is and ignore the government spin; this isn’t a tax cut, it’s simply the deferral of a tax rise.”
Chapman says the tax burden suffered during the pandemic isn’t going anywhere.
“Nobody should be counting the extra dollars in next year’s pay packets because there aren’t any,” he said.
“The tax burden for low and middle income individuals next year is exactly the same as it was this year.
“So, a cautious welcome but, please, let’s not sell it as a tax cut.”