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Financial Stress, Tax Time, and Your Mental Health

by | Jul 22, 2025 | Mental Health First Aid | 0 comments

Financial pressures can be overwhelming, and tax season adds extra anxiety. Many Aussies juggle bills, mortgages and living costs all year, waiting on a tax refund (or dreading a big bill) can keep anyone up at night. According to Health Direct, “money worries are a major source of stress in Australia” and can lead to anxiety or depression (healthdirect.gov.au). At Your First Aid Trainer, we hear these concerns often. You’re not alone – it’s normal to feel anxious about money.

When everyone else is busy with tax returns, it’s easy to feel isolated. People under financial strain may withdraw from friends, argue more, or even delay medical care because of costs (healthdirect.gov.au). These are stress reactions, but if they continue, they can harm your health. Health Direct warns that prolonged money worries can spiral into serious anxiety or depression. Some people even consider self-harm if they see no way out (healthdirect.gov.au). The key is to recognise these warning signs and get help early.

New Tax Relief on the Way

The Australian Government has introduced further tax cuts to ease cost-of-living pressures. From 1 July 2026, the tax rate on incomes $18,201–$45,000 will drop from 16% to 15%, then to 14% in July 2027. This means thousands of low- and middle-income earners will keep more of what they earn. Someone on an average wage (around $79,000) will pay about $2,190 less tax per year by 2027–28. A couple with two $80,000 incomes could save about $1,072 in 2027–28.

These tax cuts stack with other relief measures. The government is also lifting the Medicare levy low-income thresholds by 4.7% from 1 July 2024. In practice, over a million low-income Australians will pay less or no Medicare levy, leaving more breathing room for essentials. In short, low- and middle-income earners will pay a smaller slice of their wages in tax.

Practical MHFA Tips During Financial Stress

  • Talk about it. Don’t struggle alone. Share your feelings with a trusted friend or family member. Being honest about money stress (even about tight budgets) can take a load off. Health Direct notes that talking with supportive people can help you stay positive instead of bottling things up (healthdirect.gov.au).

  • Break it down. Write down your biggest worries or expenses. Make a simple budget: list essentials first (rent, bills, food) and see what you can trim. As Health Direct advises, writing down your next steps makes a large problem feel more manageable (healthdirect.gov.au).

  • Take care of yourself. Stress can affect your body, so remember the basics. Eat regularly, move your body and try to get some sleep. Even short walks or breathing exercises can relieve tension. Avoid too much caffeine or alcohol, which can worsen anxiety (healthdirect.gov.au).

  • Get help with finances. If you’re struggling, reach out for professional support. A financial counsellor (e.g. National Debt Helpline on 1800 007 007) can help negotiate with banks or utilities and find hardship programs (mhfa.com.au). The ATO also encourages you to ask for support early if tax is a problem (ato.gov.au). They can arrange payment plans or even waive some tax debt in severe hardship (ato.gov.au). Ignoring deadlines usually makes things worse, so it’s best to ask for help sooner.

  • Crisis support is available. If you ever feel overwhelmed, you don’t have to face it alone. Lifeline (13 11 14) and Beyond Blue (1300 22 4636) provide 24/7 help for anyone in crisis (ato.gov.au). Even talking with your doctor or a counsellor can help you manage anxiety before it spirals.

Talk Openly and Support Each Other

Many people feel stress at tax time – a QuickBooks survey found nearly one-third say tax season makes them anxious (quickbooks.intuit.com). We cope together: 96% of people stressed by tax say laughter helps them relax, and over half lean on family or friends for support (quickbooks.intuit.com). A joke with a friend, a family dinner, or a favourite hobby can ease some pressure. Laughter reminds us that “everything will be okay” (quickbooks.intuit.com).

If someone you know is struggling, reach out. Sometimes the best first aid is just listening. Ask “How are you coping with the tax stuff?”, or even share a funny tax-time meme. Encourage them to use the resources above or talk to a professional. Our team at Your First Aid Trainer cares about your well-being, including your mental health.

Finally, remember you’re not alone, and there are real solutions. These phased-in tax cuts will make a real difference for low- and middle-income earners. Every extra dollar you keep is one less thing to worry about. Keep talking and get support. With a plan and community support, tax season will pass, and next year you can face it with peace of mind. You’ve got this.

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