Labor's Grandma Tax

Franking credits: older women will be the biggest losersBy Professor Deborah Ralston*

The ALP’s plan to disallow franking credit refunds will have its greatest impact on older women. Not only do older women claim the greatest number of franking credits as a group, by age and gender, but they are also more likely to have little or no superannuation to fall back on.

Older Australians are over-represented when it comes to direct share ownership. According to Treasury data, over half of the 1.1 million individuals who received franking credit refunds in 2014-15 were over the age of 65. That is around 16% of the 3.6 million Australian residents in that age group.

And older women are dominant in that group. According to ATO figures, 72% of women over 75 women claimed a franking credit with an average value of $6,561. For those on modest incomes and the lowest tax rates, this represents a substantial refund that will be foregone if the ALP has its way.

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