QUESTION 87 (5 marks)
A non-refundable training tax credit is worth $2000. A worker with only $600 of tax liability can use $600; a worker with $5000 of liability can use the full credit. Explain one equity issue and evaluate making the credit refundable.
Practice marking scheme
Answer
A non-refundable design gives less assistance to the low-liability worker; refundability can improve access but costs more.
Working
The effective support differs by $1400 despite the same stated credit. Low-income workers may face a larger financing barrier to training even though retraining has supply benefits. Refundability can deliver the full assistance and improve participation. It increases fiscal cost and requires eligibility controls; course quality and completion remain important to productive outcomes.
Marking criteria
- Calculates/identifies the $1400 difference. [1 mark]
- Explains the equity and participation mechanism. [2 marks]
- Evaluates refundability with a fiscal/design limitation. [2 marks]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabusCompare your working with the guide above.