Refunds to the rescue: 3 million Aussies to use tax returns for household bills
Millions of Australians are counting down to lodge their tax returns as they desperately need the cash, according to new research by Finder.
A Finder survey of 1,077 respondents revealed a worrying 1 in 8 Australians (12%) – equivalent to 2.4 million people – admit this year's tax refund is 'critical' to their financial health.
Almost 1 in 4 (23%) say the end of financial year cash injection is 'very important' to their budgets.
The research shows 1 in 7 Australians (15%) – equivalent to 3 million people – will be withdrawing their refund to pay for household bills, while 5% will be putting it towards their mortgage.
Rebecca Pike, money expert at Finder, said the cost of living crisis has triggered an over-reliance on tax returns.
"There's a cash flow crisis and many are counting on their tax return to pay for everyday expenses and get them out of a tight spot.
"If you're waiting for your tax return to bail you out, you are likely living beyond your means."
More than 1 in 3 (36%) Australians – around 7.3 million people – plan to put their tax return into savings.
Based on the average refund being $2,900, Finder estimates that a staggering $20.8 billion would be put into savings this tax season.
Pike said investing your tax refund could create passive income.
"If you get a tax refund this year, it can be tempting to spend it all.
"But if you invest it strategically, you can generate passive income for years to come.
"Put it in a high-yield savings account or jumpstart your investing journey to build wealth."
Pike urged employees to claim for all eligible deductions.
"Make sure you claim working from home expenses if you've worked any hours from home."
The data shows 4% will use their tax return to pay off existing credit card debt.
Few Aussies are in the mood to splurge with just 5% planning a holiday with the money, and 3% who plan to go shopping.
One in five (19%) Aussies don't expect to get a tax refund this year.
|How will you primarily use your tax refund?|
|Put it in savings||36%|
|I'm not expecting a tax return||19%|
|Use it to pay household bill||15%|
|Use it on a holiday||5%|
|Put it towards paying off my mortgage||5%|
|Pay off my credit card||4%|
|Source: Finder survey of 1,061 Australians, April 2023|
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