<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Working Australians will be $250 better off at tax time under one of the headline policies unveiled tonight in the Albanese government's 2026-27 federal budget.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>To help pay for it, and its other tax cuts, the government will target discretionary trusts in an effort to squeeze more revenue from - among others - Australia's wealthiest people.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government says 13.3 million working taxpayers will benefit from a new $250 Working Australians Tax Offset (WATO).</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But it won't apply this year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In an effort to limit government spending in economy where inflation is already running hot, the offset will be available from July 1, 2027, and will be paid automatically in tax returns at the end of the year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This offset is targeted to workers and represents the most meaningful, permanent increase to the effective tax-free threshold since Labor last increased it more than a decade ago," Treasurer Jim Chalmers said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The budget's figures showed that the threshold would increase to $19,985, or $24,985 for workers eligible for the Low Income Tax offset.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/federal-budget-2026-government-unveils-250-dollar-tax-relief-minimum-tax-on-wealth-trusts/885f4657-b89b-431d-8f0d-330459a1dfe9" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Chalmers said the new offset would build on a raft of previously announced cost-of-living relief measures, including two yet-to-come tax cuts and a $1000 instant tax deduction that would leave the "average worker" better off by $2816 in 2028.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Chalmers said that was the equivalent of $54 in the pocket every week.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The offset will cost the government an estimated $6.4 billion across its first two years.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Tax on trusts</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Discretionary trusts are the subject of an entirely different taxation approach.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Albanese government will slap a 30 percent minimum tax rate on these trusts from July 1, 2028, to "improve the fairness of the tax system and help fund new tax cuts for workers".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Discretionary trusts allow people - most often people and families with great wealth - to minimise their tax expenses by distributing income among their trustees.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government's figures showed that in 2022-23, families with discretionary trusts faced an average tax rate about 4 per cent lower compared to families on similar income, but who were without trusts.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This is about better aligning the taxes paid on these types of income with the taxes paid on wages," Chalmers said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And they will fund our new round of tax relief for more than 13 million Australian workers."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government claimed more than 90 per cent of private trust wealth belonged to the wealthiest 10 per cent of Australian households.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The minimum tax won't apply to other types of trusts that don't offer the same flexibility, like fixed and widely held trusts, charitable and special disability trusts, or complying superannuation funds.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It also won't apply to deceased estates, primary production income, certain income relating to vulnerable minors, and income from assets of discretionary testamentary trusts existing at the time of the announcement.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government will also expand rollover relief for three years from July 1, 2027, in order to help businesses and individuals restructure their financial affairs.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Nonetheless, the government is predicting the minimum tax will bring in $4.5 billion in its first year, 2029-30.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><strong><span> </span></strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><strong><span> </span></strong><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><strong><span> </span></strong><strong><em><span>and</span></em></strong><strong><span> </span></strong><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a><strong></strong></li><li><strong><em><span>Make 9News your preferred source on Google by</span></em></strong><strong><span> </span></strong><a href="https://9.nine.com.au/8x987w" target="_blank"><strong><em><span>ticking this box here</span></em></strong></a><strong></strong></li><li><strong><em><span>Sign up to</span></em></strong><strong><span> </span></strong><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="_blank"><strong><em><span>our breaking newsletter here</span></em></strong></a><strong></strong></li></ul></div></div>