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DIFFERENCES BETWEEN HOUSEHOLD GROUPS
The system of government benefits and taxes in Australia has been designed to assist those in the community who are most in need of financial support. The allocation of benefits and taxes differs between households, reflecting that characteristics such as household composition, life cycle stages, household size and income have an impact on these allocations.
Graphs 1 and 2 show the average weekly benefits received (social assistance benefits in cash and social transfers in kind) and total taxes (taxes on income and taxes on production) paid by selected household groups.
Graph 1 – AVERAGE WEEKLY BENEFITS, SELECTED HOUSEHOLD GROUPS, 2015-16
Graph 2- AVERAGE WEEKLY TAXES, SELECTED HOUSEHOLD GROUPS, 2015-16
Graph 3 gives an indication of the extent of the redistributive impact between different household groups in the population, by comparing equivalised private income and equivalised final income for the same household groups. The measures are equivalised to take into account the differing size and composition of households, providing a better indication of the effect of government benefits and taxes on the relative economic wellbeing of these households.
Graph 3 – EQUIVALISED PRIVATE AND FINAL INCOMES, SELECTED HOUSEHOLD GROUPS, 2015-16
LONE PERSON HOUSEHOLDS, UNDER 65 YEARS
There were 1.3 million lone person households aged under 65 years in this study (0.3 million under 35 years, and 1.0 million 35 to 65 years). In these households, average social assistance benefits in cash tend to be low. This relates to the absence of children (and therefore family support payments) and the high employment levels in these households. Social transfers in kind also tend to be low on average in these households because the household size is small, the members do not usually receive school benefits and, due to their age, use of health services is lower. In the under 35 and 35-54 age ranges, average taxes paid exceeded benefits received by $171 and $204 per week respectively. However, in the 55-64 year age range average benefits received were similar to taxes paid.
COUPLE ONLY HOUSEHOLDS, REFERENCE PERSON UNDER 65 YEARS
For the 1.4 million couple only households, where the reference person was under 65 years, households paid, on average, more in total taxes than they received in total benefits. For couples where the reference person was aged between 35 and 54 years, taxes exceeded benefits by $618 per week, while for younger couples, taxes exceeded benefits by $480 per week. For couples where the reference person was aged 55 to 64 years, taxes exceeded benefits by $206 per week due to this group receiving higher benefits related to health services and disability and carer payments.
ONE PARENT HOUSEHOLDS WITH DEPENDENT CHILDREN
The 512,800 one parent households with dependent children had higher net benefits (total benefits less total taxes) than any of the other selected household types included in this publication. Households in this group received very high levels of social assistance benefits in cash, consisting mainly of family support payments. The average value of social assistance benefits in cash for this group was $417 per week compared to $215 per week for all households. Around half of these households received most of their income from wages and salaries, while two in every five had government pensions and allowances as their main source of income. Social transfers in kind were also relatively high ($668 per week) because of high use of education services, health services and social security and welfare services.
Taxes on both income and production (including GST) were low, since both income and expenditure were low. Total taxes averaged $319 per week of which around half ($159 per week) were taxes paid on income.
The average weekly equivalised private income of one parent households with dependent children was about 42% of the average weekly equivalised private income of couple households with dependent children. However due to higher net benefits, the average equivalised final income of this group was a much higher proportion of the average for both couple households with dependent children (78%) and for all households (81%).
COUPLE HOUSEHOLDS WITHE DEPENDENT CHILDREN
Couple with dependent children households (2.5 million households) received, on average, higher levels of social assistance benefits in cash and social transfers in kind than couple only households where the reference person was under 65 years of age. Social assistance benefits were higher because the households tend to be eligible for family support payments. Social transfers in kind were also higher. These households received greater education and health benefits due to the presence of children in the household using these services, particularly for couples with three or more dependents, as well as child care assistance and other social security and welfare benefits.
Graph 4 – SELECTED SOCIAL TRANSFERS IN KIND, COUPLE FAMILIES WITH DEPENDENT CHILDREN
However, as the average private income of these households was relatively high at $2,873 per week, they also, on average, paid more taxes on income and with higher expenditures, paid more taxes on production than the average for all households. After taking account of household size and composition, the equivalised private and final household income of couples with dependent children were very similar ($1,344 and $1,296 per week, respectively) just slightly higher than the average for all households.
COUPLE HOUSEHOLDS WITH NON-DEPENDENT CHILDREN ONLY
Households consisting of couples with non-dependent children only (515,900 households), received slightly more social assistance benefits in cash than couple households with dependent children ($205 and $155 respectively). In these households there were, on average, 2.3 employed persons and wages and salaries were the main source of income for 76% these households. Social transfers in kind were lower than couple households with dependent children because fewer household members used education services. Levels of income and expenditure were both higher, resulting in higher taxes on income and taxes on production. Their equivalised private household income averaged $1,474 per week while their average equivalised final household income was not significantly different at $1,366 per week.
LONE PERSONS AND COUPLE ONLY HOUSEHOLDS, REFERENCE PERSON 65 YEARS AND OVER
There were 1.8 million lone person and couple only households aged 65 years and over in 2015-16. In these households, average weekly equivalised private income was $826 for couples where the reference person was 65 years and over, and $513 for lone persons 65 years and over. However, these households received average weekly net benefits (total benefits less total taxes) of $684 and $575, respectively, while taxes paid were relatively low.
Therefore, while equivalised private income was amongst the lowest of any household group, their equivalised final income was closer to the population average. For couples where the reference person was 65 years or over, equivalised final income was $1,281 per week, and for lone persons $1,088 per week. These were 103% and 87% respectively of the average equivalised final income of all households.
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