‘Couldn’t get a loan’: Devastating tax hitting single mums in Australia
Exclusive: Single mothers in Australia are copping an “unfair” tax that is surging by thousands of dollars as property prices and the cost of basic essentials climbs higher.
The single tax is a well-documented financial affliction impacting adults who live alone, meaning bills, rent and groceries can be effectively doubled compared to a two-person household.
Single mum Nicki Price said her energy bills have soared recently. Supplied
Do you have a story? Contact reporter April Glover at april.glover@nine.com.au
This income strain skyrockets when you add children into the mix.
Sydney woman Nicki Price, a single mother-of-two, pays an average of $550 for her family’s quarterly energy bills.
When winter arrives, the bill shock comes with it.
“Electricity and energy has gone up so much, and it just keeps happening,” Price told nine.com.au.
“I can’t even imagine what it would be like splitting the cost with somebody because it’s just been me for so long, it’s just the norm now.”
Fellow single mum Lisa Almond lives with her youngest son in Illawarra on the NSW South Coast.
She “dreads” when her family’s energy bill arrives after it soared to nearly $1000 per quarter.
“It falls on my shoulders, there’s no dividing it if the rate increases,” she said.
“We’re still paying the same amount for energy consumption as if we have had multiple people in the house.”
Research conducted by Compare the Market found the average Australian spends $156.43 per month on energy, totalling $1877 per year.
Energy bills have soared for Australian families. Getty
While many households with dual incomes can split this down the middle, parents like Price foot the entire bill themselves.
Around 40 per cent of those living alone estimated they could save up to $100 per month by sharing with another adult.
“While you could save from not having to pay for another adult’s energy use, having a child in the house can still use a lot of energy – think things like washing, cooking, heating or cooling,” Compare the Market’s James McCay said.
“The real pressure is felt when those bills are compared to income, which is significantly less when only one adult is contributing financially.”
Single mums slugged with stamp duty, less borrowing power
Solo parents who sold their marital home are also facing huge property tax fees and less borrowing power.
Almond is hoping to buy for a second time after becoming a single mother and noticed a “huge discrepancy”.
“I will have to pay all the stamp duty and because I have owned a house before,” she said.
“I’m not entitled to any of those benefits, but I’m still saving on a single income to buy a house again.
“You’re basically starting from scratch with no access to any government policies.”
Stamp duty in NSW costs around $54,000 for a property priced at $1.324 million.
Borrowing power is drastically reduced by almost $50,000 if a person has one child.
A single person with an income of $120,000 and $2500 in monthly expenses can be approved for a $621,300 loan, according to Commonwealth Bank’s calculator.
Adding a single dependent will see the figure drop to $572,700.
Single mum Catherine Cervasio needed to sell her business's warehouse to afford a home loan. Supplied
Melbourne mum Catherine Cervasio has been a single parent for 20 years.
She has lost count of the “unfair” added expenses after losing the second income afforded by her ex-partner.
“It can come in a lump sum, which is a real shock,” she explained.
“And then you’ve got the extra pressure and worry of how you’re actually going to fund that.”
The biggest hit to the bank account was when the skincare founder bought her own apartment.
Without a partner’s income to lean on, Cervasio struggled to find the money.
“I had to sell my [business’] warehouse in order to buy my apartment,” she said.
“I couldn’t go and get a loan, it would be impossible.”
All three single mums say the system is broken because it operates under the assumption a parent is part of a dual income household.
They want better government policy to make it easier on single people, including solo mothers.
While nuclear families are doing it tough, single parent households are “barely surviving”, Almond said.
“It literally takes years to just get to the point where you’re not stressing every single week about every single bill,” she added.
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