The $250 cost-of-living payment is now hitting bank accounts

Six million eligible Australians will begin receiving the government’s $250 cost-of-living payment from today, ahead of the federal election on Saturday, May 21.

With the nation facing rising costs of living, including soaring prices for food and fuel, the government announced several targeted relief measures as part of this year’s Budget, including a one-off payment for eligible Aussies.

What is the $250 cost-of-living payment?

The $250 cost-of-living payment is a tax-free payment that will be made automatically into the bank accounts of eligible Australians. It is being paid out to eligible Centrelink recipients and Department of Veterans Affairs customers from today.

There is no need to apply, as payments will be made into your account automatically.

Who is eligible for the $250 cost-of-living payment?

The payment will be made automatically to eligible recipients of some federal government payments, and to holders of certain concession cards. The full list of qualifying payments and concession cards is as follows:

• ABSTUDY Living Allowance
• Age Pension
• Austudy
• Carer Payment
• Carer Allowance (if not in receipt of a primary income support payment)
• Disability Support Pension
• Double Orphan Pension
• Farm Household Allowance
• JobSeeker Payment
• Parenting Payment
• Special Benefit
• Youth Allowance for students and Australian Apprentices
• Youth allowance for Job Seekers
• eligible Department of Veterans’ Affairs payments.

Eligible concession cards are:

• Commonwealth Seniors Health Card
• Pension Concession Card (if you are not receiving an income support payment)
• DVA Gold Cards.

Recipients will only be entitled to receive one payment, even if they are eligible under two or more categories. The payment is tax-exempt, and will not count as income support for the purposes of any other income support payments.

Low and middle-income tax offset to end

As part of the Budget, the federal government also announced that it will phase out the low and middle-income tax offset (LMITO), otherwise known as the ‘lamington’, but will boost the payment by $420 for all eligible recipients for its final year of operation.

The LMITO, introduced as a temporary measure in 2018, provides tax relief to people earning below $126,000 annually, and is worth up to $1,080 per year. All recipients will receive a bonus $420 for the final year of the tax offset – this year – for a total of $1,500 in 2021/22.

This is another measure to try and reduce cost-of-living pressures for Australians.

“Targeted” relief for Aussies facing financial strain

A recent report found that one in six Australian households is currently facing financial pressure, and the federal government flagged that the Budget contains various “temporary, targeted measures” to alleviate some of these cost-of-living woes.

“There are real pressures right now on Australians,” Treasurer Josh Frydenberg told ABC News as he prepared to announce the $250 payment. “It’s the number-one topic around the kitchen tables of Australia.”

Finance Minister Simon Birmingham reiterated Mr Frydenberg’s position, saying that one key focus of the Budget is to attempt to alleviate concerns such as rising fuel costs, which they ultimately did by halving the fuel excise to 22.1 cents for six months. The savings from this are expected to flow through to bowsers within the next two weeks.

“These are temporary pressures we’re seeing in terms of the huge spikes in oil prices as a result of the war happening in Europe right now,” Senator Birmingham said. “And so we’re responding in targeted, responsible ways.”

Opposition says cash boost a “short-term” solution

Speaking to Sunrise in the wake of the Budget, opposition leader Anthony Albanese said that the government’s cash boost is a temporary solution. When asked if the measures announced in the Budget will help Australian households meet the pressures of higher inflation, he said they would only help in the short term.

Mr Albanese argued that the Budget contains no plan to tackle the issue of lagging wage growth in the face of inflation.

“They may as well have stapled cash to how-to-vote cards as [people] go into polling booths,” he said, “because it all disappears once the election is over and done with.”

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