Low-paid workers set to lose tax breaks

Mozo

Friday 22 January 2010

Some of the lowest paid workers in Australia face losing salary perks worth up to $30,000 as part of an extensive tax overhaul.

In recommendations set to affect the charity sector, a new government tax review will call for a reduction in tax concessions used by 60,000 organisations, the Daily Telegraph reported.

Such concessions currently allow a range of welfare agencies including church-based hospitals and the Salvation Army to provide top-up payments to their workers.

However, the government said that the arrangements are too complex and leave scope for abuse. Instead it has suggested that government agencies should pay charities through a system of direct grants.

Welfare groups have voiced their opposition to the move, while Catholic Health Australia is taking advice from accountants KPMG about the tax clawback.

With welfare sector pay set to fall and living costs rising, affected workers may be encouraged to compare savings accounts in search of the best interest rates. Earlier this month, the Daily Telegraph reported that households will have to find up to $76 a week extra this year as the cost of living soars.

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