IT'S OFFICIAL: Poor families are worse off under the budget

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The federal budget will hurt the finances of low income families with children more than others, according to analysis by the Australian National University (ANU).

And higher income couples with children actually make a net dollar gain.

The research, by associate professor Ben Phillips from the Centre for Social Research and Methods, models budget measures which directly impact households, including changes to family payments, childcare, taxation, tobacco excise and superannuation.

“The losses for the middle and top income groups are proportionately much less than low income families,” he says.

“The main impacts in this analysis are from reduction in welfare payments, mostly family payments. Tobacco excise will also more significantly impact lower income families.”

The budget measures will see low income couples with children, those in the bottom 20% of earners, lose about 2.8% of their disposable income, or about $1,429, over a year in 2018-19.

The major financial impact will be the removal of the family tax benefit part A and part B supplements.

Overall, the top 20% of families by income will be ahead financially by around $211 per year.

However, the research found that the budget will have a smaller impact on low income families than the previous two budgets.

Analysis of the 2015 budget shows it had an impact more than twice the 2016 budget for the lowest income families.

The superannuation changes do shift benefit from high income earner to low income earners.

According to the modelling, the top 20% wears a $645 burden while the bottom 20% gains $34 each year on average.

“The superannuation changes, while significant, are not enough to alter the conclusion that this budget has a regressive impact,” Phillips wrote.

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