Don't spend that $900 economic stimulus money just yet even if you do earn less than $80,000. You could be ineligible for it according to the fine print of the recently passed Tax Bonus for Working Australians Act, says QUT senior law lecturer and practising tax accountant Alastair MacAdam.
Mr MacAdam, from Queensland University of Technology's School of Law, said tens, possibly hundreds, of thousands of Australian taxpayers who had banked on the $900 windfall would be ineligible because their tax rebates would put them over the limit.
He is warning that retired people, apprentices and anyone with multiple rebates should check with their accountant before making spending commitments based on the expected $900 tax bonus.
"Section 5.5(c) of the Tax Bonus for Working Australians Act 2009 says a person is eligible if they earn less than $100,000, have lodged a 2007/08 tax return, and 'the person's adjusted tax liability for that income year is greater than nil'," Mr MacAdam said.
"There is going to be a lot of disappointed people, some have already allocated their $900; one woman told me that she was having dental work done and was going to use the $900 to pay for it when in fact she is not eligible."
Mr MacAdam said tax rebates added up.
"For example if you received the general tax threshold of $6000 and the low income rebate of $700 then your tax-free threshold is $10,666. Add to this the spouse rebate and you have $24,666 before you have to pay any tax and therefore you won't be eligible for the tax bonus, " he said.
"There are significant rebates for retired Australians and so with a couple who earns up to $43,360 neither is liable for tax so they won't get the $900. Even if they earn more than the $43,360 if they have imputation credits from share dividends they are out of the running for the tax bonus."
Mr MacAdam said simplistic media coverage and even government advertisements about the tax bonus suggested that the $900 tax bonus would be received by everyone who had lodged a 2007/08 tax return.
"This is not the case. If someone has earned under $10,666 in the 2007/08 tax year such as apprentices, they will not receive the bonus," he said.
"Basically, to get the bonus you have to have earned more than $10,666 and not be eligible for other tax rebates. If you are eligible for other rebates then you would have had to have earned much more than $10,666 to get the bonus."
Media contact: Niki Widdowson, QUT media, 07 3138 1841 or n.widdowson@qut.edu.au.
