Living costs are continuing to rise — and not just for one group. New data shows that all household types experienced higher living costs through the December 2025 quarter, reinforcing why many Australians feel their budgets are still under pressure even as headline inflation slows. For households reviewing their position with an accountant Box Hill, the latest figures provide a timely prompt to reassess spending, government benefits, and tax-time claims.
The Australian Bureau of Statistics (ABS) recently released its Selected Living Cost Indexes, which measure changes in out-of-pocket expenses for different household types, including employees, age pensioners, self-funded retirees, and other transfer recipients. Unlike CPI, these indexes are designed to reflect what households actually pay, making them especially relevant for budgeting and planning.
What the ABS Data Is Showing
The latest ABS release confirms that living costs increased across every household category over the year. While the mix differs by household type, the data shows that:
- Housing costs, including rent and mortgage interest charges
- Food and non-alcoholic beverages
were major contributors to rising living costs across household types. These are essential expenses, which is why cost pressures often feel unavoidable for many households.
Why Your Experience May Feel Worse Than Headline Inflation
Many people compare their personal experience with CPI and feel the numbers don’t line up. One reason is that CPI measures average price movements across a broad “basket”, while the Living Cost Indexes reflect how different households actually spend their money.
The ABS also regularly updates expenditure weights to reflect changing spending patterns, but no index can perfectly match an individual household’s situation. Households with high exposure to rent, mortgage interest, or food costs may therefore experience inflation that feels significantly higher than the headline figures.
Sanity-Checking Your Budget and Tax Position
In a higher-cost environment, it becomes more important to ensure budgets and tax positions are accurate and up to date. A Box Hill accountant can help households review:
- Whether all eligible tax deductions and offsets are being correctly claimed
- How rising costs affect cash flow, particularly where housing expenses dominate
- Whether income timing or expense planning can improve after-tax outcomes
Further personal income tax cuts are legislated to take effect from 1 July 2026, which could provide relief for some taxpayers depending on income level and circumstances. Understanding how these changes interact with your broader tax position is important.
Reviewing Benefits and Thresholds
Beyond tax, changes in government payment rates and thresholds — including childcare subsidies and social security indexation — can also influence household budgets. These adjustments occur regularly and may alter entitlements or out-of-pocket costs if not monitored.
Households that may benefit most from a review include:
- Renters and recent home buyers are facing higher housing costs
- Families managing child care and education expenses
- Retirees and pensioners on fixed or semi-fixed incomes
Final Thoughts
The ABS data confirms that cost-of-living pressure is broad-based, affecting every household type — not just specific groups, making proactive financial review essential.
Working with a trusted accountant in Box Hill can help ensure spending assumptions, benefit entitlements, and tax outcomes are aligned with current conditions — supporting more confident planning in a persistently high-cost environment.
Disclaimer: This article contains general information only and does not constitute financial or taxation advice. You should seek personalised advice from a registered tax or financial professional.
Infinity Solution Tax Plus 