The Working Australians tax offset: law now, claimable from 2027-28

The Working Australians tax offset is a non-refundable tax offset in new Subdivision 61-E of the Income Tax Assessment Act 1997, worth the lesser of $250 and the tax that would apply if your taxable income consisted only of your net labour income. It is enacted law — Schedule 3 of the [Treasury Laws Amendment (Tax Reform No. 1) Act 2026](https://www.legislation.gov.au/C2026A00049/asmade) commenced on 1 July 2026 — but it applies only to assessments for the 2027-28 income year and later, so it cannot be claimed in a 2025-26 or 2026-27 return.

Key points:
- The offset is **enacted law, not a proposal**: Schedule 3 of Act No. 49 of 2026 (Royal Assent 26 June 2026) inserted **Subdivision 61-E** into the Income Tax Assessment Act 1997 and commenced on 1 July 2026.
- **Commencement is not application.** Item 4 of Schedule 3 applies the amendments “in relation to assessments for the 2027-28 income year and later income years” — first claimable in returns lodged from about July 2028, with **no effect on 2025-26 or 2026-27**.
- **$250 is a ceiling, not an entitlement.** Under s 61-160 the offset is the *lesser* of $250 and the basic income tax liability you would have if your taxable income were made up only of your net labour income. Many people will be entitled to less than $250.
- Three eligibility gates apply (s 61-155(1)): you must be an **individual**, an **Australian resident at any time** during the income year, and your **net labour income must exceed the tax-free threshold** for that year. Below that floor there is no entitlement at all — it is a gate, not a taper.
- It turns on **labour amounts less labour deductions**. Investment income, rent, dividends and capital gains are **not** labour amounts, and business income derived through a partnership or trust is expressly excluded — although income from a business you carry on **as an individual** does count.
- It is **non-refundable**: the new item 3 in the s 63-10(1) table says “You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year.” Any excess is simply forfeited.
- Do not confuse it with the [standard deduction for work-related expenses](/technical-resources/standard-deduction-work-expenses-2026-27) in Schedule 4. That is a **deduction**, applying from **2026-27**. This is an **offset**, applying from **2027-28**. The two schedules commenced on the same day but apply from different income years.