Australians who live alone can face significantly higher household costs because they have to cover expenses such as rent, electricity, internet, insurance and groceries without another adult to share the bills.
The situation can be particularly challenging for renters, pensioners and Australians receiving Centrelink payments, who may have limited income and fewer opportunities to absorb rising living costs.
This financial disadvantage is sometimes described as the “single tax.” However, it is important to understand that this is not an official tax imposed by Centrelink or the Australian Taxation Office. Instead, the term refers to the additional cost that can come with maintaining a household on one income.
In some comparisons, the difference between the costs faced by single and partnered households has been estimated at around $7,800 a year.
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What Does the $7,800 ‘Single Tax’ Mean?
The $7,800 figure does not represent an actual bill that a single Australian receives from the government. Instead, it is an estimate of the additional financial burden associated with running a household alone. One comparison estimates that the average monthly expenses for a one-person household can be around $2,835, while a couple may spend approximately $4,118 combined. That works out to roughly $2,059 per person for the couple.
Based on those figures, a single person could be spending about $776 more per month than each individual in a couple. Over a year, that difference can add up considerably.
However, the figure should not be treated as a universal amount. Actual expenses vary depending on where someone lives, whether they rent or own their home, their lifestyle, transport costs, income and other personal circumstances. The underlying issue is that many household expenses do not simply become half as expensive when one person is living alone.
Why Can Living Alone Cost More?
Housing is one of the biggest examples of the financial difference between single and partnered households.
Consider a property costing $600 a week to rent. Two adults can potentially share that expense, with each person contributing toward the household cost. A single renter living in the same property has to cover the entire $600 themselves.
Utilities can create a similar situation. Someone living alone may use less electricity and water than a two-person household, but many bills include fixed charges that remain regardless of how many people occupy the property. Internet, insurance and other household expenses can also remain largely unchanged.
Groceries can create another disadvantage. Larger packages and bulk purchases often provide better value per kilogram, while a person living alone may prefer smaller quantities to reduce the risk of food going to waste.
Australian household spending research has also highlighted differences in per-person expenditure between single-person households and couples.
Why Centrelink Recipients Can Feel the Pressure
The financial challenge can become more significant for Australians whose main source of income is a Centrelink payment.
A pension or other income-support payment may need to cover rent or mortgage costs, groceries, utilities, transport, medical expenses and other essentials. Someone living alone does not have another household income available when an unexpected bill arrives.
Even relatively small increases can therefore have a noticeable impact.
For example, a rise in electricity costs, an insurance renewal or an additional $30 a week in rent has to be absorbed entirely within one person’s household budget.
For older Australians receiving the Age Pension and people receiving other income-support payments, the combination of limited income and increasing housing costs can make independent living more difficult.
It is important to remember that Centrelink is not charging a “single tax.” The financial pressure comes from the relationship between household expenses, available income and the fact that a single person cannot divide many costs with another adult.
More Australians Are Living Alone
The issue is becoming increasingly relevant as Australia’s household structure changes.
One-person households now account for approximately 27.5% of Australian households, compared with about 23.9% around two decades ago and roughly 18% in 1981.
The number of Australians living alone is also expected to increase over the coming decades.
Australian Bureau of Statistics projections indicate that the country could have approximately 3.4 million to 4 million people living alone by 2046, depending on population and household trends.
Older Australians, particularly older women, make up an important part of the population living alone.
This demographic shift has implications for housing and welfare policy because many household expenses benefit from economies of scale. When two adults share accommodation, certain costs can effectively be spread across the household. A person living alone does not have that same advantage.
Rent Can Create an Even Bigger Squeeze
Renters can experience the financial impact particularly strongly.
A single renter has to qualify for a property using one income and then absorb every future rent increase alone. For someone receiving the Age Pension or another fixed income, continued increases can eventually make a previously affordable property difficult to maintain.
The experience of 70-year-old Louise Taylor highlights this concern. After going through multiple rental applications, she eventually secured a duplex but remained worried about what another increase in housing costs could mean.
She has sought housing assistance and joined a waiting list while considering whether sharing accommodation or moving in with family could eventually become necessary.
For older Australians, housing affordability can therefore become about more than simply finding a cheaper property. It can determine whether a person can continue living independently.
Homeowners Can Also Face the ‘Single Tax’
Owning a home can remove the pressure of rent, but it does not eliminate the additional costs associated with maintaining a household alone.
Single homeowners still have to pay expenses such as council rates, electricity, insurance, repairs, groceries and transport.
Em Farr, 59, has described reducing her spending after her son moved out and stopped contributing toward household expenses. She relies on Centrelink income and has considered renting out a spare room as a way of bringing in additional money.
However, people receiving income-tested Centrelink payments need to be careful when considering additional household income.
Anyone thinking about taking in a boarder or renting out part of their home should check how the arrangement could affect their particular Centrelink payment before making financial calculations.
Rising Housing Costs Add to the Problem
Broader increases in the cost of housing can make the situation even more difficult.
Recent Australian consumer price data showed housing costs increasing 5.7% over the year, making housing one of the major contributors to inflation.
The housing component of the Consumer Price Index includes expenses such as rents, utilities, council rates, new dwelling construction and property maintenance. Mortgage interest is treated separately within the CPI calculation.
For a couple, some household increases may be shared between two incomes. A single person, however, has to find the additional money from one household budget.
That difference can make the same increase feel considerably more significant for someone living alone.
The Cost Is Not Only Financial
The “single tax” also describes a practical burden that is harder to measure in dollars.
A person living alone is responsible for managing the household independently. That can include paying bills, negotiating rent, grocery shopping, arranging repairs, handling appointments and dealing with unexpected problems.
In a two-adult household, many of these responsibilities can potentially be divided.
This is why the $7,800 figure should not be viewed as a fixed cost that every single Australian pays. It is better understood as an illustration of the broader financial disadvantage that can arise when household expenses cannot be shared.
Some single homeowners may have relatively low living costs, while couples with children, mortgages or significant debts can face substantial financial pressures of their own.
Nevertheless, with more Australians living alone and housing costs remaining a major household expense, the financial challenges facing single-income households are becoming increasingly important.
For Australians relying on Centrelink or the Age Pension, the difference can affect much more than spending on non-essential items. It can influence where they can afford to live, whether they need a housemate and how long they can maintain financial independence.
