Carbon tax winners and losers

Julia Gillard vowed that 'most of the money raised from the carbon price will be used to fund tax cuts.'

Here is a closer look at what the carbon tax will mean for Australian households:

The tax-free threshold will almost triple by mid-next year (2012), meaning that no one earning $18,200 or less in a year will have to pay tax.

And by mid-2015 this figure will rise to $19,400.

Treasurer Wayne Swan estimates that this will free over one million Australians from having to file a tax return.

It's estimated that 4 million households will be better off, 6 million will break even and around 8 million will be worse off.

ELECTRICITY PRICES TO RISE

Treasury predicts electricity prices will rise on average by about $3.30 per week, gas by $1.50 and food by less than $1 under the policy.

The government says average assistance will equal $10.10 a week.

Two-thirds of households will receive enough compensation to cover the average price rises entirely.

Compensation will be delivered through income tax cuts and increases in pensions, allowances and family payments.

COMPENSATION TO LOW AND MID-INCOME EARNERS

Every taxpayer earning less than $80,000 will receive a tax cut, with most getting at least $300 a year. Low-income earners will receive around $500 to $600.

Australia's 3.4 million pensioners will receive compensation at least equal to cost-of-living price rises.

Pensioners will receive lump sum advance payments of up to $250 for a single pensioner before the carbon price begins in July 2012.

They will start receiving a new Clean Energy Supplement equal to a 1.7 per cent increase in the maximum pension rate from 2013.

Families receiving Family Tax Benefit A will get up to an extra $110. Those receiving Family Tax Benefit B will get up to an extra $69.

Low-income households that do not receive enough assistance through tax cuts or government payments will be able to claim a new $300 annual Low Income Supplement.

People who have high electricity bills because they use essential medical equipment will be eligible for an annual cash payment of $140 a year.

IMPACT ON HOUSEHOLDS MODEST: CHOICE

Church welfare group UnitingCare welcomed the compensation arrangements for lower-income families.

"Essentially what they've done is made it simpler and fairer for low-income Australians who are working or for Australians moving from welfare payments," director Lin Hatfield Dodds said.

Consumer advocacy group Choice said the impact on households would be "relatively modest".

But Australian Food and Grocery Council boss Kate Carnell said she was "perplexed" by Treasury figures that say food prices would rise only by an average of less than $1 a week.