While total debt levels are up, the proportion of Australians holding extreme levels has reached new heights. More than 30 per cent of the poorest households are carrying debts three times their income. A decade ago, the proportion was less than 23 per cent. But it is not an issue confined to those with low incomes. The proportion of high-income households with high debt levels has also reached a record 29.5 per cent. Across all income groups, there has been an increase in high levels of debt, particularly since the take-off in the property market in 2011. In the past two years, there has been a near 5 per cent increase in the number of high-debt households.

Among high-wealth households, property loans account for 90 per cent of their debt, with almost half having a mortgage of some sort. Fifty-seven per cent of middle-income households have property loans, which account for 93 per cent of their total debt. Loading Lower-income households are less likely to have property debt but more than a quarter of their outstanding loans are for university or vocational education. IFM Investors chief economist Alex Joiner said the high level of indebtedness across Australians suggested the government's tax cuts, starting with refunds up to $1080 that hit bank accounts on Friday, may have a muted impact on the economy. "I would expect at least half the people who get a cheque are going to look to use some of it to pay down debt, with much of the rest going into non-discretionary spending," he said.

"We've got high income-to-debt ratios here, some of the highest in the world, and you would expect people to use some of this extra income to look to pay that down." The figures also revealed another trend - older people going into retirement with debt. Loading Replay Replay video Play video Play video In 2003-04, 44 per cent of people aged between 65 and 74 had some sort of debt. Now, close to 55 per cent of this group owe money while more than a third of those aged over 75 hold debt. Apart from the financial troubles large debts can cause, they can also have a broader impact on people and their feeling of wellbeing.

NAB's quarterly measure of wellbeing, released on Friday, found the single largest negative for life satisfaction is non-mortgage debt. Loading Work or job issues, the daily commute, substance abuse and social media all detract from wellbeing in small ways, but nothing approaching non-mortgage debt, which detracted from wellbeing for a net 35 per cent of those surveyed. Mortgage debt was a negative for one in five people. Dealing with debt was a particular issue for many. Almost 40 per cent said they withdrew socially, a quarter said they got angry or argued, a fifth filtered phone calls while a similar number left bills unopened. Twelve per cent lied to their partner or family or turned to alcohol and drugs.

It follows the release of groundbreaking research from the Reserve Bank of Australia this week that suggested that increasing debt levels are a growing risk to the broader economy. It contrast to long-term economic theory that people take into account both their debts and the increasing value of their assets when looking at their spending patterns, the RBA research showed there was a "debt overhang" that directly hit household consumption plans. We've got high income-to-debt ratios here, some of the highest in the world, and you would expect people to use some of this extra income to look to pay that down. According to the research, a 10 per cent increase in debt could reduce household spending by 0.3 per cent. ABS chief economist Bruce Hockman said more debt was being held by those with higher incomes and total wealth.

The absence of income growth over recent years showed people had increased their leverage levels in a bid to buy into the property market. "Without the large income growth, people have looked to borrow more - helped by lower interest rates - to take on property which has added to their wealth, especially for those with higher wealth," he said.