Tax cuts and childcare: Everything we know so far about the 2021 Budget

Low and middle income earners, working parents, and job seekers are three groups set to receive boosts in new measures set to be unveiled by Treasurer Josh Frydenberg in next week's budget.

The Treasurer, who will deliver his second budget in six months after last year's was delayed until October due to Covid-19, has already promised more big spending this time around as the government tries to bolster an economy still recovering from the lockdown battering.

'We won't be undertaking any sharp pivots towards austerity. We want more people in jobs and in better paying jobs. This is what our fiscal strategy is designed to achieve,' he said in a speech last week.

The budget is expected to contain big spending on infrastructure, skills, tax cuts and aged care to boost jobs around the country.

Here Daily Mail Australia takes a look at some of the key changes that have been officially announced or leaked so far.

Insurance Loans Mortgage Attorney Credit LawyerTax cuts 

Mr Frydenberg is expected to extend the low and middle-income tax offset (LMITO), which is worth up to $1,080 and benefits people with a taxable income up to $126,000.

The bonus, which was available for the 2018–19, 2019–20 and 2020–21 income years, had been scheduled to run out in June.

However it is expected Mr Frydenberg will extend it for another year at a cost of about $7billion.

Next Tuesday Josh Frydenberg will hand down this year's federal budget with a focus on supporting the economy to recover from the Covid-19 pandemic. Pictured: Testing in December

Next Tuesday Josh Frydenberg will hand down this year's federal budget with a focus on supporting the economy to recover from the Covid-19 pandemic. Pictured: Testing in December

How much do you stand to benefit from the low and middle-income tax offset?

How much do you stand to benefit from the low and middle-income tax offset?

'The Coalition is always the party of lower taxes,' Mr Frydenberg told reporters in Perth after news of the extension leaked to the media.

'That's our record and that will continue to be the message and the policies we deliver going forward.'

The offset is claimable when Aussies submit their tax returns. You don't need to complete a section in your tax return to get these tax offsets - the ATO does it automatically.

Insurance Loans Mortgage Attorney Credit Lawyer Child care 

Mr Frydenberg announced on Sunday the government would spend $1.7billion of taxpayers money on a package that will bring in several sweeping changes to the childcare system.

They include a subsidy of up to 95 per cent of the cost of putting second and subsequent children aged five and under into childcare, and removing the $10,000 subsidy cap for high-income earners. 

Mr Frydenberg said the changes would not only be a massive help to hundreds of thousands of families, but also boost the number of people returning to the workforce. 

'We are ensuring that around 250,000 families will be better off as a result of this package,' Mr Frydenberg said. 

orking parents could soon be paying as little as $6 a day in childcare fees as part of the federal 2021-22 Budget (stock image)

Working parents could soon be paying as little as $6 a day in childcare fees as part of the federal 2021-22 Budget (stock image)

Childcare fee overhaul 

Treasurer Josh Frydenberg announced on Sunday a $1.7billion package for the childcare system. 

Families with two or more children aged five and under will be able to access several benefits to ease the burden of high childcare fees.

They will be eligible for a 95 per cent subsidy.

The $10,560 subsidy cap will also be lifted for families that earn a combined $189,390 a year.

Around 250,000 families are expected to save $2,260 a year on childcare fees. 

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'The Morrison government has made significant progress in boosting female workforce participation, as well as narrowing the gender gap. But there is still a long way to go.'   

Families with two or more children aged five and under will be able to access the 95 per cent subsidy - a boost on the current 85 per cent.  

Around 250,000 families are expected to save $2,260 a year on childcare fees. 

Families who earn a combined $110,000 and have two kids in childcare four days a week will save $95.39 a week.

Parents who earn

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