Winners and losers of government’s $500 electricity bill relief handout revealed

Thousands of working Aussie families will miss out on electricity bill relief worth hundreds of dollars for one simple reason.

EXCLUSIVE

Thousands of working families will miss out on electricity bill relief worth up to $500 in the budget under an income threshold cut-off.

News.com.au can reveal the winners and losers under the billion-dollar energy relief package designed to slash the cost of winter electricity bills.

It is good news for aged pensioners, the unemployed and other welfare recipients under the “temporary and targeted assistance” for households that are doing it tough.

Treasurer Jim Chalmers said it will take some of the sting out of these price rises. Picture: NCA NewsWire/Martin Ollman

Who gets the $500?

The Treasurer has confirmed in an exclusive interview with news.com.au that relief will be targeted to pensioners, Commonwealth Seniors Health Card holders and households receiving income support including Family Tax Benefit A and B.

“It will make the bill smaller,’’ the Treasurer told news.com.au. “That means the electricity part of the CPI (consumer price index) is smaller.

“In most states and territories the retailers will take it off your bill. For most people it’s in the third quarter of the bill. This is all about taking some of the sting out of higher electricity prices.”

More than five million households will qualify for the $1.5 billion scheme, which will be rolled out in time to cover bills in the second half of the year.

That money will be matched by the states who will also tip in the same amount, taking the total relief to $3 billion.

Overall, the Albanese Government is preparing to unveil $14 billion in cost-of-living relief including childcare fee relief for families.

RELATED: What we know so far about the federal budget

Thousands of working families will miss out.

Who will miss out?

Despite Treasurer Jim Chalmers remaining on track to deliver a modest surplus – the first in 15 years – not everyone is eligible for the energy relief.

Single workers who do not qualify for income support and families with a combined income into the six figures could miss out.

Relief will be provided as a credit directly on recipients’ power bills.

The key criteria to qualify is that you qualify for family fax benefits.

For families with one child, FTB is cut off after you reach a combined income of more than $108,000. So that means a primary earner on $70,000 a year with a spouse earning just $48,000 is deemed too wealthy to qualify.

FTB is more generous depending on how many children you have, however. For example, if you have two teenage children, you can have a combined family income of up to $117,000 before you miss out on FTB and the energy relief.

And if you have three teenage children, you can have a combined family income of up to $140,000.

The Treasurer defended the cut off limits on the grounds that many other cost of living measures in the budget, including the two PBS scripts for the price of one deal, would slash prescription drug costs.

“Your medicine bill for a lot of people halves,’’ he said.

“Childcare changes on July 1. There are a heap of these changes that are not for the most vulnerable but it is targeting the most vulnerable.”

Mr Chalmers said that cost of living relief would be the centrepiece of the budget, but it will be carefully constructed to ensure that it doesn’t fuel inflation.

The quantum of cash offered will differ from state to state and will be determined in part by how much electricity prices are and how much money the states are prepared to contribute to top up the Commonwealth contribution.

“So it’ll be different around the country, we’ve struck eight different deals with different jurisdictions,’’ he said.

“But we hope and we expect that it will take some of the sting out of these price rises, which are putting pressure on families, households and small businesses.”

The Treasurer has conceded workers will have to wait another year before wages outstrip the rising cost of living.

Surprise surplus

The Treasurer made a Freudian slip in one interview on Sunday as he launched a pre-budget media blitz, referring to “the surplus” when the budget is currently in deficit.

There’s been widespread speculation the budget could be back in the black, but the surplus will be short-lived.

The Treasurer has conceded workers will have to wait another year before their wages outstrip the rising cost of living.

And the big driver of the budget turn around is employment, not commodity prices.

“That’s a common misconception about the improvement in the budget,” Mr Chalmers said.

“Commodities are an important part of the story but not the biggest part of the story — only about a fifth of the improvement is from higher commodity prices.

“Improvements in the labour market, lower unemployment and higher wages growth, that makes the biggest contribution — 40 per cent — [while] 20 per cent is commodity prices.”

Dr Chalmers will hand down the budget at 7.30pm on Tuesday night.

Originally published as Winners and losers of government’s $500 electricity bill relief handout revealed