AUSTRALIAN families are living "tax free" in four out of every 10 homes in the nation.
The shock statistic is -revea-led in new data on how much tax Australians really pay when childcare rebates and welfare is taken into -account. 
Social Services Minister Christian Porter has warned the tax and spend "churn" that sees thousands of Australians pay tax only to receive it back as welfare is a big problem.
It involves millions of dollars in costs for public servants and raises questions over whether it would be more -effective simply to give some workers a tax cut.
Mr Porter also warned bracket creep, when workers go into a higher tax bracket, may also be preventing some mothers returning to work.
According to the Productivity Commission's latest research, 32 per cent of homes in Australia pay no income tax and rely on welfare including the aged pension, unemployment benefits and the disability support pension.
"We are starting to get good data now that really explains the problem," Mr Porter said.
About 50 per cent of households pay income tax but -receive no welfare payments. Mr Porter said the government was working to understand how big the problem of tax churn was.
While some have suggested the family tax benefit system could be targeted, with workers offered an upfront tax cut rather than a welfare handout or rebate, critics say it is designed to help stay-at-home mums.
The system effectively takes money from the main breadwinner, in many cases the -father, and returns a rebate in the form of welfare that is mostly paid to mums.
Mr Porter said he was in no rush to reform the present system further, but did want to -investigate barriers for women returning to work.
"The reason family tax benefits were created in the first place was that families pay tax in different ways," he said. "At the moment we are focused only and exclusively on the family tax benefit reforms we have previously announced.
Mr Porter said he was open to the idea of telling taxpayers how much net tax they paid and how much welfare they -received on tax.
"The idea has been raised many times, but you've got to consider how practically that could be done," he said.
"It's difficult to do it on an individual basis."samantha.maiden@news.com.au