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Pensioners, low-income earners better off under carbon scheme

By Julian Drape
15 Dec 2008 12:23 PM

CANBERRA, Dec 15 AAP - Ordinary Australians will share in $30 billion during the next five years to help them deal with the increased cost of living under carbon emissions trading, with some expected to be better off than they are today.

Household electricity bills will jump $4 per week (an 18 per cent rise), gas bills will climb $2 per week (a 12 per cent rise) and petrol and household goods will also cost more under the scheme outlined on Monday in a government white paper.

Overall, the government expects the cost of living to rise by 1.1 per cent when the scheme is introduced in July 2010.

But pensioners, carers and eligible families will be compensated - some handsomely.

All pensioners and carers will be better off.

A single aged pensioner will face a $4 per week increase in household costs but receive an extra $7 a week in their pension.

Some 89 per cent of low-income households - 2.9 million of them - will receive cash payments and tax breaks equal to 120 per cent of their cost of living increase.

About 97 per cent of middle-income households will receive some cash while 60 per cent will receive enough assistance to meet the expected rise in the cost of living.

A typical family with a combined income of $60,000 and two kids will be $347 per year better off, according to the government's modelling.

It will receive an extra $1,037 in assistance, but will only have to fork out an additional $690 to meet rising living costs.

Pensioners and carers will receive a 2.5 per cent pension increase, meaning single pensioners will get an extra $382 and couples will get an extra $640.

Self-funded retirees will get the same amounts through an upfront increase in their seniors concession allowance.

Welfare and dole payments will increase by 2.5 per cent.

Low and middle-income households will receive a combination of: an extra $390 in the low income tax offset, an increase to family tax benefit A of 2.5 per cent or $115 per child, an increase to family tax benefit B of 2.5 per cent, a $150 increase in the dependency tax offset and a $500 transitional payment per adult.

The $6 billion in assistance to households each year will be funded by the sale of trading permits.

Motorists will be protected from higher fuel costs by a cent for cent reduction in the fuel tax for the first three years.

That means for every cent emission trading pushes prices higher the government will cut taxes by the same amount.