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I'm not an expert on the system in Australia but how I think it works from what I have heard is there isn't a cut off point where if you make x you are eligible

I'm not an expert on the system in Australia but how I think it works from what I have heard is there isn't a cut off point where if you make x you are eligible and if you make x+1 you aren't. Instead its a slope where if you make x+1 you lose a certain % of the payments until you eventually make enough to lose them all. But at all times its still better to take the job.

jacques_chester 7y ago
I'm afraid it's not that simple. The key is the Effective Marginal Tax Rate, which is the compounded effect of withdrawal of benefits and moving up to a different tax bracket. Depending on the prevailing settings it's not uncommon to find points at which the EMTR is more than 100%. I ran for the Federal Parliament for a libertarian party in 2007 largely because I supported their policy plan to reform taxation and welfare jointly. The concept was called "30/30": a 30% flat income tax, with negative income tax at 30% below $30,000 income. Capital gains and company tax would also be set at a flat 30%. The gist was to remove all distortions from different tax and welfare settings, so that any taxpayer was always facing the same deal: each additional dollar earned is taxed at 30%. There were a lot of policies I didn't agree with, and naturally, those were the ones I got the most questions about. Running for a microparty that grabs anyone who puts their hand up is an ... interesting ... experience. (I came second last with a whopping 0.7% of the primary vote, for those who were wondering)
- kwhitefoot 7y ago
  Well done for trying.
taneq 7y ago
Most things here are arranged that way and it works pretty well for the most part. There are a few things that still have cliffs, though. One of my friends is on a disability pension but is still able to work part time. If he works too many hours then he's disqualified from the pension so he's had to cap his work hours. Another thing is the childcare subsidy for working households - the subsidy itself scales in a reasonable manner but there's also a hard cap on annual payments which applies above a given household income threshold. If you go slightly over the cap you can end up out of pocket by $10k or more.

jacques_chester 7y ago

I'm afraid it's not that simple. The key is the Effective Marginal Tax Rate, which is the compounded effect of withdrawal of benefits and moving up to a different tax bracket. Depending on the prevailing settings it's not uncommon to find points at which the EMTR is more than 100%. I ran for the Federal Parliament for a libertarian party in 2007 largely because I supported their policy plan to reform taxation and welfare jointly. The concept was called "30/30": a 30% flat income tax, with negative income tax at 30% below $30,000 income. Capital gains and company tax would also be set at a flat 30%. The gist was to remove all distortions from different tax and welfare settings, so that any taxpayer was always facing the same deal: each additional dollar earned is taxed at 30%. There were a lot of policies I didn't agree with, and naturally, those were the ones I got the most questions about. Running for a microparty that grabs anyone who puts their hand up is an ... interesting ... experience. (I came second last with a whopping 0.7% of the primary vote, for those who were wondering)

kwhitefoot 7y ago
Well done for trying.

taneq 7y ago

Most things here are arranged that way and it works pretty well for the most part. There are a few things that still have cliffs, though. One of my friends is on a disability pension but is still able to work part time. If he works too many hours then he's disqualified from the pension so he's had to cap his work hours. Another thing is the childcare subsidy for working households - the subsidy itself scales in a reasonable manner but there's also a hard cap on annual payments which applies above a given household income threshold. If you go slightly over the cap you can end up out of pocket by $10k or more.