Stimulus Package Payments and What You Will Get

19 February 2009

The Federal Government has allocated $12.2 billion in a bid to strengthen the national economy, encourage consumer spending and reinforce the education system. With the global recession a daily threat and unemployment on the rise it is little wonder many individuals are ecstatic with the individual payments coming our way.

But with approximately 8.8 million families and individuals to receive a payment, what category do you fall into and why? What exactly will you be receiving from the multi-billion dollar financial stimulus package pledge?

The stimulus package follows the well received $10.4 billion Economic Security Strategy that was delivered in October 2008 and follows that same eligibility classification in that low and middle income earners are of a focus. The Government stated that this is due to the fact that these are the majority of households and will be the greatest affected by the recession with many households already feeling the effects of the downturn.

The stimulus package consists of immediate tax relief options and bulk one-off payments for many households in a bid to give the Australian economy a well-needed kick start. The package is broken into five different categories and classifications as to who will be receiving individual payments. The majority of these categories are based on individual enrolled in educational courses or children of schooling age.

The package is designed for a multi-layer effect with immediate cash payments to stimulate the economy while supporting economic growth and jobs. The Government has estimated that approximately 10.6 million singles and families will be eligible for at least one payment form the package, with several expecting to qualify under a few different classifications. To see the Federal Government's Fact Sheet, click here.

The package of measures includes:

Tax Bonus for Working Australians

Single-Income Family Bonus

Training and Learning Bonus

Back to School Bonus

Farmer's Hardship Bonus

Additionally, small business owners will feel another benefit as you will receive a 30 cent-in-the-dollar investment in tax breaks that will approximate cost $2.7 billion.

It is important to note that in order to receive a payment in April, you must have lodged a 2007-2008 tax return although those who have not still have until the end of June 2009 to be eligible.

Stimulus Package - Tax Bonus for Working Australians

Of the stimulus package, it is the Tax Bonus for Working Australians that will immediately benefit the greatest number with over 8.7 million taxpayers to receive a payment.

Recipients of the Tax Bonus for Working Australians will be those who lodged a tax return for the 2007 08 financial year, or those who do by 30 June 2009. Further criteria includes those Australian residents that have a tax liability after considering their individual Medicare levy and Medicare levy surcharge, tax payable and less any offsets or imputation credits.

How much will individuals receive?

$900 bonus to taxpayers with taxable income that is up to and including $80,000.

$600 bonus to taxpayers with taxable income that is up to and exceeding $80,000 to $90,000.

$250 bonus to taxpayers with taxable income that is up to and exceeding $90,000 to and including $100,000.

Individuals will receive their payments after April 2009 and do not need to do anything to receive their Tax Bonus for Working Australians.

Payments will come from The Australian Taxation Office after it has determined individuals eligibility based on the 2007 08 financial year. The payment will come through as a direct payment, most likely through an electronic transfer or cheque.

The Government has lowered the Bonus by $50 after amendments were made to the Nation Building and Jobs Plan to make the package fiscally responsible.

Stimulus Package - Single-Income Family Bonus (Family Tax Benefit Part B)

There are essentially two parts to the Family Tax Benefit, with the Single-Income Family Bonus being classified as the Family Tax Benefit Part B (FTB B). The FTB-B will see families who have only one main source of income receive a lump sum payment of $900 per family, irrespective of the number of children. To qualify as a single income family, the family may either be a two-parent family where only one parent works or there is paid work balanced with caring for children or for sole parent families.

How much will eligible families receive?

$900 will be paid to each eligible family which is not taxable or included for any social security income testing purposes.

The Single-Income Family Bonus is expected to benefit approximately 1.5 million families who currently receive family assistance as fortnightly installments. Eligible families will receive a one off payment of $900 from 11 March 2009. The payment will be automatically paid as a lump sum by Centrelink to families registered with them for family assistance.

The FTB-B is only payable to families with a single income (or primary earner income) that is $150,000 per year or less. In the case of two parent families with the highest income earnings of $150,000 per year or less, it will be the lower income that will determine how much payment the family will receive.

Eligible two parent families will receive part of the FTB B as long as their youngest child is below five years and the lowest income is under $22,995 per annum or the youngest child is aged between five and 18 years with the lower income being under $17,904 per annum.

In the cases of separated parents, it will be the primary carer that will receive the lump sum payment with rules of sharing of Family Tax Benefit applying. These rules state that where care is shared, the payment will be split according to the division of care.

The Government has lowered the Bonus by $50 after amendments were made to the Nation Building and Jobs Plan to make the package fiscally responsible.

Stimulus Package - Training and Learning Bonus

The Training and Learning Bonus is the second part of the Governments education bonuses from the stimulus package and holds a focus on supporting students who are currently enrolled in secondary education courses, TAFE courses and some postgraduate courses, associate diplomas and undergraduate courses.

The $511.2 million Training and Learning Bonus will offer a one-off lump sum payment of $950 to eligible student social security recipients in order to assist in any education costs for 2009.

The Training and Learning Bonus has been broken into two distinct categories to determine individual eligibility:

Category 1

The one-off $950 bonus will be sent to those who, as of 3 February 2009, were receiving Austudy; ABSTUDY, Youth Allowance (student and apprentices) and related payments such as Sickness Allowance.

Students receiving the Back to School Bonus will not receive the $950 Learning and Training Bonus.

Category 2 (Applies from 1 January 2009 to 30 June 2010)

This category involves the Education Entry Payment (EdEP) of $950 which is an additional payment to the pre-existing $208 EdEP payment.

Current receipts of the EdEP are those receiving social security payments and are also commencing study such as Newstart Allowance

How much is the payment and how does it differ between categories?

Typically the Training and Learning Bonus will be a lump sum payment of $950 and will be paid to the eligible recipients by Centrelink automatically from 24 March 2009. For those who fall in the second category and are receiving the EdEP will receive an additional $1158 (the standard $208 payment plus $950) from 24 March 2009 onwards.

It is important to note that individuals receiving the Back to School Bonus will NOT be receiving the Training and Learning Bonus.

What is the Education Entry Payment (EdEP) and do I qualify?

The EdEP is a payment that is made to individuals that receive certain government allowances in order to help them return to study. For a full list of these allowances click here (XXX).

Enrolled After 3rd February 2009?

If you have enrolled into an education course or the like AFTER the cutoff date of 3 February 2009 will still be eligible to receive bonus payments as long as you fall within the intent of the legislation and through an administrative scheme. This scheme ensures that every student that enrolls within this semester and commences study will be granted their appropriate bonus payment.

Additionally, students that are receiving a Australian Postgraduate Awards within this semester will receive the Training and Learning Bonus payment through the administrative scheme.

Those that are recently unemployed will receive the bonus if they have been on Newstart or Youth Allowance for one month if they are to begin an education course.

Furthermore, the Government as changed regulations attached to social security payments, meaning recipients can be eligible for payment after only a month from 1 January 2009 to 30 June 2010.

Stimulus Package - Back to School Bonus

Education and families is at the forefront of the stimulus package with several bonuses overlapping to ensure quality schooling. In fact, the Rudd Government plans to invest $2.6 billion in assisting families with education costs throughout the 2009 academic year.

The Back to School Bonus will benefit over 1.2 million families and 2.8 million children aged 4 to 18 through the payment Family Tax Benefit Part A (FTB A).

Those receiving the FTB-A will be those who match the following criteria:

Families with school age children (4-18) who are eligible for the FTB-A as of 3rd February 2009

Families with individuals that receive Youth Allowance (students and apprentices), ABSTUDY or Austudy will be eligible for the Training and Learning Bonus

Families with a student aged between 21 -24 years that is eligible for the Training and Learning Bonus

Students studying full-time aged 19 or 20 years old that do not qualify for either the back to School Bonus or the Training and Learning Bonus will receive a $950 payment through an administrative scheme.

How much will awarded through the Back to School Bonus?
Families will receive a single lump sum payment of $950 through the Back to School Bonus per eligible child.

People who currently receive the fortnightly FTB-A payment will receive their Back to School Bonus from Centrelink automatically from the 11 March 2009. Families with more than one child satisfying the set criteria will receive a payment per child.

There have been some concerns expressed regarding families who presently receive the Education Tax Refund and their eligibility for the Back to School Bonus. The Back to School Bonus is not affected by the Education Tax Refund, the bonus is designed as a one-off additional aid for families with children within schooling age.

The Education Tax Refund states that families can claim a 50 per cent refundable tax offset of up to $750 every year for expenses for each child in primary school and a 50 per cent refundable tax offset of up to $1,500 every year for expenses for every child in secondary school.

Stimulus Package - Farmers Hardship Bonus

Australian farmers will benefit from the stimulus package under the specific Farmer's Hardship Bonus which will provide a one-off lump sum payment of $950. This bonus package is expected to benefit over 21,500 recipients of drought relief income support with predictions of $20.4 million in costs.

The Government explained that this bonus is designed to assist farmers and those who small businesses are dependent on the farming industry suffering under the current drought and additional impact of the economic crisis.

How much will farmers receive?

Recipients will receive a lump sum payment of $950

This payment will not be effected by whether the recipient receives payment at a single or couple rate.

Payments received from the farmer's Hardship Bonus are not taxable or included as income for income support purposes.

Those eligible for the Farmer's Hardship Bonus are those who have previously been receiving (as of February 3rd 2009) the following Government payments:

Farm Help Income Support.

Interim Income Support for Farmers;

Exceptional Circumstances Relief Payment for Farmers;

Interim Income Support for Small Business;

Exceptional Circumstances Relief Payment for Small Business;

Transitional Income Support.

If you qualify for the Farmer's Hardship Bonus, you will receive your payment automatically through Centrelink in the two weeks following 24 March 2009.

These packages and other initiatives announced in the stimulus package and the Nation Building and Jobs Plan are expected to produce growth of approximately 0.5 per cent of GDP in 2008-09 and with estimations of 0.75 per cent of GDP in 2009-10.

The Government has further stated that for every $1 spent on these immediate packages, it will be investing $2 into long term prospects that will generate future economic growth. This is supposed to offer an ideal balance between immediate action to delay the effects of the looming global recession while supporting Australia's jobs and economic industries for the oncoming years.

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