swans shopping guide for working families, page-7

misty
I don't think working families, will be able to last 2 years, if this article concerning a Brisbane single income working family, is an indication of whats to come.


SIMON Dorries and his wife, Sonya, have seven children under 15 and another on the way. As a manager in a timber firm in Brisbane, Mr Dorries earns a bit above $100,000 a year, while his wife, who works hard at home, does not have an income.

The Dorries see themselves as the quintessential "working family", the kind that cheered Kevin Rudd's observation that people earning $100,000 were not rich and that the income level for the Medicare surcharge should be raised to $150,000.

The family budget is tight but they are not complaining. "I am very fortunate to have a well-paying job which, until recently, despite the size of my family, was enough to live on with a modest but comfortable quality of life," Mr Dorries told The Australian yesterday.

In recent months, though, the budget began to be pinched by rising grocery, fuel and mortgage costs. The fuel and food bill alone in most weeks is more than $600 and has been rising. "Since Christmas, we have gone from a situation where we were making ends meet, to a situation where we have been relying on savings to get by," Mr Dorries said.

Of course, Mr Dorries realised it was not sustainable and, like other working families, looked for relief in the May budget. But he has discovered that income-assessment changes from July 1 next year will wipe out most of his government support through family payments, which are now at about $300 a week under Family Tax Benefit Part A.

From the middle of next year, Mr Dorries's $10,000-a-year superannuation payment, which he makes through a salary sacrifice, will be included in his assessable income for the first time, giving him an annual assessable income of between $110,000 and $120,000.

Mr Dorries has calculated this means the loss of most of his family's $600-a-fortnight Family Tax Benefit A - about $15,600 a year. "This will take significant income from my family," he said.

Mr Dorries said that to make up the difference he will have to stop salary-sacrificing for his superannuation.

He estimates he will get about $6000 a year, after tax, by no longer contributing the $10,000 as superannuation. "This means we'll lose $300 a week in family payments and replace it with about $120 a week in after-tax pay," he said.

As well, he said, "I will no longer be able to save for my retirement and would have to depend on an age pension."

"My wife and I have no idea how we will survive come July 2009," he said.

Mr Dorries said it was particularly upsetting because the family tax benefits had been lifted to compensate families for the introduction of the GST. "Now we won't have family benefits and we still have the GST," he said.
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