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A helping hand for single parents

A helping hand for single parents

Centrelink offers a range of financial benefits to help parents manage the cost of raising kids. And if you're a single parent, you might even be eligible for additional financial support. This cheat sheet will give you an idea of which benefits you're entitled to and how much they're worth.

Being a parent is a tough gig – and being a single parent is even harder. Whether you're divorced, widowed or simply making a choice to go it alone, life as a single parent can seem like a constant juggling act.

It can also put a major strain on your finances when you're relying on a sole income, but a helping hand can make all the difference. That's why it's important to understand which types of government assistance you may be entitled to.

Here are some of the most common Centrelink payments for single parents. Remember, eligibility requirements and payment amounts may often change, so be sure to check the Department of Human Services website for the latest information.


Parenting Payment

Who is it for? Single parents caring for children under the age of 8.

How much is it? The maximum payment is $738.50 per fortnight.

What you need to know: Eligibility is subject to an income and assets test, and there may be a waiting period.


Family Tax Benefits

Who are they for? Parents caring for children under the age of 15, or aged 16–20 and studying full-time.

How much is it? There are two separate payments. For Family Tax Benefit A, the maximum payment is $182.84 a fortnight per child for children aged 0–12, and $237.86 a fortnight per child for children aged 13–19. For Family Tax Benefit B (an extra payment for single parents and one-income families), the maximum payment is $155.54 a fortnight per family if your youngest child is aged 0–5, and $108.64 per fortnight per family if your youngest child is aged 5–18.

You may also receive a Family Tax Benefit Part A Supplement of $726.35 per year for each eligible child, and a Family Tax Benefit B Supplement of $354.05 per year.

What you need to know: In order to be eligible for Family Tax Benefits in a particular financial year, you also need to ensure you lodge your income tax return by no later than 30 June in the following financial year. You can't get Family Tax Benefit B if you're on paid parental leave, but you may be eligible after your leave ends.


Single Income Family Supplement

Who is it for? Parents who earned between $68,000 and $150,000 last financial year and received a Family Tax Benefit for at least one child.

How much is it? A one-off annual payment of up to $300.

What you need to know: If you received Family Tax Benefits, you'll receive this supplement automatically.


Child Care Rebate

Who is it for? Parents with a child attending an approved child care facility (not a school).

How much is it? Up to 50% of your out-of-pocket child care expenses, to a maximum of $7,500 per child per year.

What you need to know: To receive this rebate, your child must be immunised (or have a medical exemption).


Rent Assistance

Who is it for? Parents who receive more than the base rate of the Family Tax Benefit.

How much is it? Up to $153.30 per fortnight if you have one or two children, or $173.18 per fortnight if you have three or more children.

What you need to know: Rent Assistance doesn't apply if you own your own home or live in government-provided housing.


Telephone Allowance

Who is it for? People receiving other types of government payments, pensions or allowances, including the Parenting Payment.

How much is it? Up to $28.20 per quarter.

What you need to know: You don't have to meet an income or assets test to receive this allowance.

Other payments

Depending on your situation, you may also be entitled to receive child support from your child's other parent; a crisis payment or income support if you're a victim of domestic violence; or assistance with your children's health care costs.

Visit the Department of Human Services website to find out more.

Ask someone in the know

 

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

Making the dream purchase a reality

Making the dream purchase a reality

We all know the feeling – there's a major purchase we want to make, but we're worried it will break the bank. Whether it's a luxury car or a hard-earned holiday, that extra expense seems just out of reach.

The good news is, there are plenty of alternatives to making an outright purchase upfront. And depending on what you're in the market for, you might find a practical solution that won't leave you strapped for cash.

Here are some creative ways you may not have considered to pay for a big-ticket item.

Piece by piece

When you see something you love, it's tempting to think you need it then and there. But if you've got a little patience – and the item isn't a necessity – then a layby option is a great way to make payments more manageable.

Here's how it works: the retailer puts the item aside, making sure that it won't be sold to someone else, while you pay off the balance bit by bit. Normally you have to hand over a deposit and then keep making regular payments that you can afford, until it's yours. 

If you really don't want to wait until you've paid off the full item, some suppliers offer 'own now, pay later' options. This allows you to take home the item immediately and then pay it off in regular instalments. In this case, you may be charged interest over time, so it's always a good idea to shop around first to get the best deal – you might even find a company that offers 0% interest for the first six or 12 months.

Borrowing to buy

For a major purchase that's essential to your daily life – such as a family car or home repairs – it might be worth considering a loan or some other form of financing.

If you're a homeowner, another financing option might be to unlock the equity in your home. Equity is the difference between the market value of your property and the amount you still owe on your home loan. This effectively allows you to borrow money against the value of your home, using your property as security. The best part is, you don't necessarily have to use the money for home-related expenses, so you can choose what to spend it on.

Your financial adviser can help you with budgeting and refer you to a lending specialist or broker if required. They can also help set up a manageable repayment plan so you don't end up falling behind and getting stuck in a debt spiral.

Sharing is caring

Think you can't afford a holiday? Think again. If you haven't heard about timeshare, then you may be in for a treat. Basically, it's a way of owning the rights to a property for a specific amount of time each year without having to buy the whole property itself. In effect, you co-own the property with all the other shareholders and you pay a fixed amount each year – which is usually cheaper than paying for a holiday rental. That way, when you're not using the property, someone else is.

In the same way, boat shares are available for those who prefer to spend their leisure time on the water. Instead of co-owning a holiday property, you co-own a boat and make bookings for when you want to use it. You could even apply this concept to other items that you only use occasionally, and team together with a group of friends to own it jointly.

Living in a renter's paradise

Ever wondered why you keep buying items that err on the expensive side – like household appliances or whitegoods – when you end up having to replace them every few years?

In some cases it may be worth renting rather than owning, especially for things like your flat-screen TV, which you might want to upgrade when a newer model comes out. Plus in many cases, the rental supplier will take care of any repairs if the item breaks down, saving you money on maintenance.

But before you make any major financial decision, it's always worth consulting your financial adviser. They can help you work out if your purchase fits within your budget and savings plan, and how you can best manage the repayments – whether you're renting, borrowing, timesharing or paying instalments.

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

 

 

Your handy moving-house checklist

Your handy moving-house checklist

Whether you're a growing family in need of a bigger house, empty nesters downsizing, or someone who's just looking for a change of scenery, moving to a new home is a big deal. It can also be costly, stressful and time-consuming. But don't sweat, this checklist will make planning your move a whole lot easier.

There's no doubt that saying goodbye to the place you've called home for many years can be an emotional experience. Finding a new place to live can also be challenging – not to mention expensive. And it's not just the cost to buy or rent a new home. Buyers need to factor in things like real estate commissions, building inspections and legal fees. Renters need to consider costs such as up-front bond payment.

Then, as moving day gets closer, there's inevitably going to be a lot of hard work and running around to do. But with some careful advance planning, you can take some of the stress out of the process.

The following checklist is designed to do just that. By breaking your main tasks down into manageable steps – and ticking off each task as you complete it – you'll be amazed at how much smoother moving house can be.

At least one month out

¨  Create a moving budget. Factor in all the costs that you can think of – from removalists' and cleaners' fees to any new furniture or appliances you'll need.

¨  Shop around for a removalist. Ask friends and relatives for recommendations then ring around or look online to compare quotes. But don't go by price alone – make sure the company is properly accredited and insured.

¨  If you have children who will be changing schools, start the transfer process now.

¨  Measure the floor space in your new home (if you haven't already) to make sure all your belongings will fit in the new space. It's also worth thinking about how you'll get bulky items like bed frames and wardrobes through narrow doorways or up staircases.

One month out

¨  Sort out your unwanted belongings. If you're aiming to downsize, consider inviting friends and family over to take some items off your hands. You could also hold a garage sale or advertise unwanted belongings free of charge on a buy/swap/sell Facebook page. For anything still left to unload, take it to an op shop (as long as it's all in good condition).

¨  Book your removalists. The sooner you lock in the moving date, the better – especially if you're city-based and/or you're planning to move on a weekend.

¨  Get to know your new area. Find out where things like shops, cafes, petrol stations and government services are located. It will help make the first weeks in your new home easier.

¨  Hunt for boxes. Most removalists will supply them – otherwise, try your local supermarket. Also, buy packing tape and marker pens so you can start labelling.

¨  Call friends and family and ask if they can help with packing, cleaning or moving. Or else, they might be able to look after your kids or pets on moving day.

Two weeks out

¨  Sort out your insurance. If you're a homeowner, you'll need to consider home building and contents insurance. If you're renting, then you'll just need to consider contents insurance. It is worth checking if your existing policy covers the move itself – some policies may only protect you against loss or damage if you're using professional removalists.

¨  Start packing. Begin with all the stuff you can manage without in the short term, like ornaments, books, extra bedding and out-of-season clothing. Make sure boxes aren't packed too heavily and that breakables have plenty of padding. Newspaper, bubble wrap and even towels and clothing can make good packing material. And of course, don't forget to clean and pack up any outdoor items as well, like your gardening tools or barbecue.

¨  Get quotes for professional cleaners if you want to outsource that task. You might also be able to get affordable help with packing, cleaning and sorting by checking out Airtasker.com.

¨  Use up the food in the fridge and pantry. The more you get rid of now, the less there will be to pack.

¨  Go to the post office and redirect your mail.

¨  Arrange utilities, phone and internet for your new home. In some instances, you may be able to simply get your current services switched off and transferred to your new home on the day you move. And if your providers allow you to make all the arrangements online, it can save you a lot of time.

The last week

¨  Call your removalists to confirm their arrival time, and finish off the last of your packing.

¨  Clean each room as soon as it's cleared – this will save you time on moving day. Now is also a good time to start cleaning windows and mowing the lawn (if you have one).

¨  Allocate tasks to family members, friends or people you've enlisted to help on the day.

¨  Keep aside anything you might need on moving day. This might include water bowls and leads for pets or a kettle to make tea or coffee for your helpers. You'll also need easy access to things like pyjamas, toiletries and towels for your first night in your new home.

¨  Pack portable valuables like jewellery and small electronics, as well as important documents like your passport, Will and insurance policies to take with you on moving day.

On the day

¨  Drop off kids and pets to a friend or family member if you can.

¨  Help the removalists as needed.

¨  Do a final clean (if you're not having it done professionally).

¨  Make a final check of the house before you leave – including outdoor areas.

¨  Take your valuables and anything else you're transporting yourself.

¨  Switch off the power and hot water, and lock up the doors and windows.

¨  Say goodbye to your old home – and start the next phase of your life.

Preparing for the expense

Moving house can be a costly exercise, so it's a good idea to speak to Robert Julian before you start planning. They can help you put together a realistic budget so you don't break the bank – which will give you one less thing to worry about.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

Have you baby-proofed your finances?

Have you baby-proofed your finances?

Becoming a parent brings a world of joy into your life, but it can also put a strain on your household finances. So if you're planning to take time off work to look after your little one, make sure you're financially prepared.

Although the prospect of taking months off work to look after a newborn baby is exciting, it can also be daunting. And when you're busy getting ready to welcome your new addition, it's easy to put off thinking about how parenthood will affect your finances.

Like any major life change, the key is to start preparing for it as soon as you can. That includes putting together a realistic financial plan that covers the periods before, during and after your parental leave. Here are some things to consider.

What are the costs?

There's no denying that having kids is expensive. First, there are the medical bills during pregnancy, then there are the ongoing costs of food, clothing, toys and healthcare – and that's before you start considering your child's future education expenses. In fact, research shows that looking after your baby will set you back around $144 a week on average.[1]

If you're expecting your first child, the bills can rack up even further when you factor in one-off expenses like cots and strollers. So if you're looking to keep costs down, make a list of everything you need and ask friends or family members if you can borrow any items that their own kids no longer use.

What are your entitlements?

The Australian Government operates a paid parental leave scheme, with an allowance set at the National Minimum Wage ($672.60 a week).

Payments are a maximum of 18 weeks for mums or primary carers and two weeks for dads or partners. Plus, you're entitled to parental leave pay if your annual income is under $150,000 and you've been employed for at least 10 of the 13 months before the birth or adoption of your child and have worked for 330 hours during that 10 month period. Any payments you receive will also count towards your taxable income, so ask us what it will mean for your financial position.

Some employers may provide additional payments through their own paid parental leave scheme, which won't affect your government entitlements[2]. But make sure you check with your employer first so you're clear about what they offer.

Everyone's employment situation and financial circumstances are different, so the impacts of parental leave will also differ from one household to the next. The most important thing is to create a careful budget that takes into account any changes to your income and any additional living expenses once bub arrives.

Online tools like the Money Smart Parental Leave Calculator are a great place to start.

How will your super be affected?

Dealing with a reduced income while you're on parental leave is one thing, but have you also considered how a career break might impact your retirement savings? While you're off work, your employer isn't obligated to keep contributing to your super, which could really slow down the growth of your nest egg. For those on unpaid leave, your employer normally stops contributing to your super altogether.

As an example, let's look at Julia, who just turned 30 and is about to take 18 months off work after having her first child. She currently earns $80,000 a year.

During her career break, Julia won't receive super contributions from her employer and she's not planning to top up her super from her own savings. This means that way down the track when she's ready to retire, Julia could end up with a super gap of almost $11,000 from her 18 months of maternity leave.[3]

You can use the Money Smart Career Break Super Calculator (https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/career-break-super-calculator#/calculator/careerbreak) to work out how your career break plans could affect your own super. Then, ask us about ways to minimise the impact – for example, by topping up your super now or else by salary sacrificing a portion of your earnings after you return to work.

Get the right advice

With a baby on the way, there are always a million things to do – but make sure you fit in time to speak to your as well. We are able to show you how a career break could affect your current and future finances, and help you build a smart financial plan for the years ahead.

Once your finances are sorted, you'll then be able to focus on the most important thing in your life – your new little bundle of joy.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.




[1] National Centre for Social and Economic Modelling, Cost of kids, Income and Wealth Report Issue 33, May 2013.

[2] The Government has proposed limiting Government Paid Parental Leave in some circumstances where a person is receiving employer provided paid parental leave.  At the time of writing, this proposal had not been legislated.

[3] Based on a current superannuation balance of $50,000 and a retirement age of 67. Assumes a balanced investment option before retirement and a medium level of fees paid on super.

What is ethical investing?

Ethical investing can make cents


Ethical investing has gone from backwater to mainstream over the past decade, as Australians discover they can make the world a better place whilst have the potential to make money at the same time. Whether you choose to support a sustainable future, animal welfare or strong corporate governance, it has never been easier to align your values with your investments.

 Consumer demand for ethical investments doubled in the two years to December 2014, with total assets under management of $31.6 billion. Growth was supported by strong investment returns and growing interest from superannuation funds, managed funds and Financial Advisers.1 In the early days it was often assumed that investing ethically would limit your options and reduce returns. However, over the past decade, ethical Australian share funds have provided better returns than both the ASX300 Index and the average large cap Australian equities fund.2

 

What is an 'ethical investment'?

 

Ethical investment, or 'socially responsible' or 'sustainable investment', is the term of a process that takes into account environmental, social, corporate governance or other ethical concerns. It's a process that begins with your personal values. For example, you may wish to include investments in your portfolio that support the development of renewable energy or to avoid companies with a poor health and safety record. Australians who want to invest ethically can do so in a number of ways which your Financial Adviser will be able to help guide you through. You can buy direct shares in companies that align with your values or invest in an ethical managed fund. If you are a member of a public offer superannuation fund, it may offer an ethical investment option on its investment menu.

 

A great way to incorporate your personal values into your broader investment portfolio is to invest via a managed fund. But before you do, it's important to understand the different methods ethical fund managers use to achieve their investment objectives.

 

Some funds screen out companies in controversial industries such as tobacco, gaming or testing their products on animals. Some select only sustainable companies in sectors such as clean energy or green property; while still others aim to raise corporate standards by investing in companies that, are 'best in class', within their industry in terms of corporate governance.

 

It is also becoming increasingly common for ethical investors and fund managers to use their ownership to engage with companies on issues such as executive pay or environmental standards.

 

Your Financial Adviser can help you identify ethical investments tailored to your personal requirements that have the potential to generate strong financial results.

 

 

1.             Responsible Investment Benchmark Report 2015, Responsible Investment Association Australasia, responsibleinvestment.org/wp-content/uploads/2015/08/2015_Benchmark_Report_Aust_FINAL.pdf

2.             Responsible Investment Benchmark Report 2015, Responsible Investment Association Australasia, responsibleinvestment.org/wp-content/uploads/2015/08/2015_Benchmark_Report_Aust_FINAL.pdf



Speak to us for more information

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.


 

The business owner's checklist


Being your own boss can be rewarding, but it's also incredibly challenging. That's why it's important to future-proof your hard work by taking steps today that will prepare your business for tomorrow.

 When you're running your own business, it's demanding enough to keep up with the day-to-day, which means it's easy to lose sight on the big picture. But without careful planning, your business might not be prepared for whatever the future holds.

Here are 5 essentials that every small business owner should factor into their business plan.

 

1.     Give it structure. Make sure you structure your finances so your personal assets and business assets are kept separate. As a minimum, you should have a separate business bank account and credit card, and pay yourself a salary. By untangling your personal finances from your business bookkeeping, you may even save time on administration.

2.     Be prepared for the unexpected. If anything were to happen to your staff, your equipment or your intellectual property, it could have disastrous results for your business. The concept of business insurance is a veritable smorgasbord of safeguards against unexpected events, with options ranging from vehicle and key person insurance to public liability and professional indemnity cover. No matter what type of business you have, your Financial Adviser can help make sure it's protected.

3.     Have an exit strategy. One day you (hopefully) intend to retire – and a time may even come when you decide to leave the business earlier than expected. Regardless of when you eventually exit, it's important to plan ahead so it can be done smoothly, with as little financial impact to the business as possible. Start thinking about succession management sooner rather than later – it's a good opportunity to evaluate your business and identify its future leader.

 

4.     Plan beyond yourself. Even with a retirement succession plan in place, there's always a chance your business could be faced with involuntary succession – for example, if you die unexpectedly. So as well as insuring your business, make sure you're personally covered against death, disability and serious illness. You can also set up a legally binding buy-sell agreement that sets out how ownership of the business will be transferred in the case of involuntary succession. And to be certain your assets will be distributed to your chosen beneficiaries according to your wishes if you pass away, make sure you have a comprehensive, up-to-date estate plan.

5.     Work to live, not the other way round. Your business is a big part of your life, but it's important to remember that there's also life beyond work. Many small business owners find it hard to separate work life and home life, which can cause tension with their loved ones. So if you're looking to secure your business's finances, your Financial Adviser can give you the guidance you need to remove some of the stress of business ownership.


Speak to us for more information

 Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.




Economic challenges of an ageing population


As the Baby Boomers continue to move into retirement, a national discussion about the economic challenges of our ageing population intensifies. With fewer working Australians for each retiree, momentum is building in government and business circles to more adequately address the issue.

 When the Age Pension was introduced in Australia in 1909, average life expectancy for people who made it to retirement was 77. Today, the average 60-year-old can expect to live to 85 or older.1 While our increased longevity is something to celebrate, it is also a symptom of a broader global demographic transition.


Over the past century, developed countries such as Australia have transitioned from high birth and high death rates to low birth and luckily lower death rates. As our wealth increased as a country so did improvements in health, education and longevity. These trends have had a major impact on the dependency ratio of workers to retirees. Back in 1909 there were 15 workers for every retiree; today there are just 4.9 and by 2050 the number will fall to an estimated 2.6 workers for every retiree.2


This poses social and economic challenges, as governments in Australia struggle to fund public pension schemes and rising health and aged care budgets.

Default longevity insurance

Currently the Age Pension fills the role of 'longevity insurance' for the majority of Australian retirees – that is, an income until you die, albeit a modest one. Roughly three quarters of today's retirees are on a full or part pension.3

The Federal Government has taken a number of steps to reduce people's dependence on the Age Pension, and ease future strain on the Federal Budget, beginning with, but not limited to, the introduction of compulsory superannuation in 1992. By no means guaranteed to cover all of an individual's retirements needs, particularly given potential changes to the superannuation rules, the Government is also progressively raising the pension age from 65 to 67 years.

But our increased longevity is not just a challenge for government. Individuals who aspire to a comfortable lifestyle in retirement, above the level afforded by the Age Pension, face the real risk of outliving their savings.

At present, the onus is on individuals to accumulate enough retirement savings both in and out of superannuation to fund their chosen lifestyle. The challenge with this approach is that no one knows whether the accumulated savings will last long enough.

 

Income to last a lifetime

Part of the answer could lie in the development of innovative retirement income products such as Deferred Lifetime Annuities (DLAs). The good news is that these are already in the pipeline and could be available during the second half of 2017.

The May 2016 Federal Budget removed regulatory hurdles that have prevented the introduction of DLAs. Importantly, it was proposed that the tax exemption on earnings in the pension phase will be extended to DLAs. DLAs are a special type of annuity you purchase on retirement. Income payments don't begin until you reach a given age – typically between 80 and85–and then continue until you die. The longer the deferred period, the higher the income you can expect to receive.

 

Andrew Boal, Managing Director at Willis Towers Watson and Convenor of the Actuaries Institute Superannuation Practice Committee describes how DLAs could potentially be used this way: "Say you finish work at 65 with $500,000 in retirement savings. You could use $50,000 to buy a lifetime annuity to kick in after 15 or 20 years. You can then talk to your FinancialAdviser about what to do with the other $450,000 to fund your lifestyle until your annuity kicks in."

 

The appeal of such a strategy is that rather than scrimp and save in the early, active years of retirement, you can budget with certainty knowing that your income needs are covered until you pass away.

 

Seek information and advice

As the average life expectancy inches longer, tomorrow's retirees may need to work longer or save more. In the meantime, retirement income products are constantly evolving to help you meet your emerging financial needs. Whatever your age or stage of life, your Financial Adviser can help you identify the most appropriate retirement strategy and products for your situation.


 1 The Challenge of Longevity Risk: Making Retirement Income Last a Lifetime,

Actuaries Institute Australia, October 2015,

actuaries.asn.au/Library/MediaRelease/2015/InternationalPaperfinal261015.pdf

2 'A brighter view of dependency ratios' by Bruce Gregor, 18 April 2013,

cuffelinks.com.au/a-brighter-view-of-dependency-ratios/

3 'The Golden Years: the economics of increased longevity', video, ARC Centre of Excellence in Population and Ageing Research, cepar.edu.au


Speak to us for more information

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.




Easing the pressures of making decisions on Aged Care.

Managing the costs of aged care


Choosing the best aged care facility for yourself or a loved one can take its toll – both emotionally and financially. But with a bit of planning, you can take control of your cash flow and make sure you find the right care facility.

 Whether you're considering residential aged care for yourself, a family member or a friend, the options can seem overwhelming – and that's before you even get started on the paperwork.

 

You want to find the best aged care home possible, but within a realistic budget. We break down the costs of going into aged care, putting you on the right foot to make a financial plan with the help of your Financial Adviser that will support a comfortable lifestyle and quality care.

 

How much will it cost?

While aged care facilities receive a helping hand from the Australian Government, you'll still need to contribute towards the cost of care for you or your loved one. Generally speaking, there are four types of fees you may be charged: an accommodation fee, basic daily care fees, a means-tested fee and extra services fees.

 

Accommodation fees

One of the biggest questions for retirees entering aged care is how to pay for accommodation. There's no fixed price for accommodation, as each aged care facility can set its own fee based on factors such as local property prices and room type. So, while the average accommodation costs are around $350,000 to $400,000, these could be even higher if you're living in an expensive city like Sydney or Melbourne, or if you choose a room with a private bathroom.

 

But the amount you pay also depends on your level of income and assets. When you go into care, you'll need to lodge an income and assets assessment form so the Department of Human Services can assess your financial situation. If you're seeking aged care as a couple, you'll be considered to own half of the combined income and assets of you and your partner.

 

Depending on their assessment, the Australian Government may cover all or part of your accommodation costs. If you're required to make an accommodation payment, you'll have 28 days after entering aged care to decide your payment method.

 

You can choose between a lump sum payment, called a Refundable Accommodation Deposit (RAD), and Daily Accommodation Payments (DAP) – or a combination of both. Daily Accommodation Payments are essentially interest payments on any outstanding accommodation payment amount, while the RAD is an interest-free loan to the aged care facility which you'll get back if you leave or will become part of your estate when you pass away.

 

Your Financial Adviser can give you guidance on the best payment method for your financial situation.

 

Basic daily care fees

In addition to your accommodation payment, you'll need to pay ongoing fees to cover all your day-to-day living costs such as food, laundry and cleaning. Basic daily care fees are regulated by the Australian Government, and are set at 85% of the maximum single Age Pension.  Currently, this fee is $48.25 per day – or over $17,600 per year – and it increases twice a year with changes to the Age Pension.1

 

Means-tested fees

On top of your basic daily care fees, you may be asked to make an additional contribution to the cost of your care. When you fill out your income and assets assessment form, the Department of Human Services or the Department of Veterans Affairs will work out whether you have to pay this fee and how much it will be.

 

The means-tested fee is currently capped at $25,939.92 a year, or $62,255.85 over a lifetime – so once you've reached this amount, you can't be asked to pay any more in fees.1

 

Because this fee is based on your assets as well as your income, you'll need to take into account how it might be impacted before you decide to make major financial decisions such as selling the family home. Your Financial Adviser can help you work out the best strategy for your own situation.

 

Extra services fees

Some aged cared homes have dedicated extra service places which provide a higher standard of accommodation or services. If you choose an extra service place, you'll need to pay an extra service fee.

 

What's more, in standard aged care homes you may have to pay additional fees if you wish to enjoy a higher standard of accommodation, greater choice of meals or additional services such as hairdressing, podiatry, Foxtel or newspaper delivery. If your aged care facility offers these services, they can set their own fees – but you should have the choice of whether or not you wish to use, and pay for, these services.

 

For an estimate of how much you or your loved one may pay in aged care fees, you can use the Australian Government's Residential Care Fee Estimator or speak to your Financial Adviser.

 

Planning your future

Before you can choose the best quality care, you'll need to work out your finances. By factoring in your upfront and ongoing fees, as well as having something put away for extra expenses that crop up, you'll be able to figure out exactly what you can afford – and start searching for an aged care facility that meets your needs within your budget.

 

That's where getting financial advice can make all the difference. With the guidance of a Financial Adviser specialised in aged care, you'll have the support you need to manage the paperwork from the Government and the aged care home. Your Financial Adviser can also work out the right payment options for your situation, while ensuring a steady cash flow to take care of your immediate needs.

 

What's more, they can guide you through the biggest financial decisions you'll need to make: from selling the family home to planning your estate. Your Financial Adviser can help you understand the longer term effects of these decisions, including their impact on your age pension and your aged care means-tested fees.


Speak to us for more information

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.






Wedding thrills minus the endless bills

 

Many newlyweds start married life struggling from heavy debts from their big day. But with a proper financial plan, a walk down the aisle can also be a stroll in the park.

 

With the average cost of an Australian wedding now well over the $30,000 mark,1 tying the knot can mean a huge financial burden for many couples. It can also have a knock-on financial impact for years to come – for example, if they use credit cards or a personal loan to cover costs, or if their wedding debt means they have to put off buying their first home.

Of course, most couples want the happiest day of their lives to be as grand as it is in their dreams, but that doesn't mean it needs to break the bank. In fact, with some careful cash flow management (and maybe some minor compromises), a couple can save themselves significant amounts. And if the parents of the bride or groom are also chipping in as well, it's important to make sure the festivities aren't overshadowed by family tensions over a blown budget.

 

Watch out for hidden expenses

Wedding budget blowouts can happen without warning and can easily snowball out of control. To avoid this happening to you or your loved ones, ask recently married friends if there were any unexpected costs that tripped them up. Here are some of the common ones:

·         Package deals. Many wedding venues offer food and drinks packages at a fixed cost or per head. Make sure you know what's covered, so you can see which option will give you the best value for money.

·         Venue extras. Be clear about what you're getting for your venue hire fee, otherwise you could get stung for the extra cost of things like lighting, sound, décor and bar staff. Plus, if you've booked an outside venue, is there an inside option if it rains on the day – and is it covered by the venue fee?

·         Overseas costs. If you're planning an overseas wedding, remember to factor in things like visa costs and currency fluctuations. The last thing you want is for your guests to have to pay more than they bargained for.

·         Taxes and service charges. Check and double check the fine print in your contracts and service arrangements to make sure there will be no difference between the price you've been quoted and what the final bill will come to.

 

5 ways to do a wedding cheaper

If you want to keep costs down, there are plenty of ways to go about it – you might even end up making the event more memorable for your guests:

 

1.     Wedding on a weekday. If your wedding is a gathering of your nearest and dearest – and you give them plenty of notice – no one will begrudge taking a day off work to attend.

 

2.     Budget clothes. Okay, the words 'budget' and 'clothes' together for a wedding day may seem unappealing, but so does paying thousands on outfits you wear once. A non-traditional wedding dress will always be cheaper, and you could save even more by hiring or making one.

 

3.     Buy your rings online. To find the cheapest price for your wedding jewellery, start looking online. But if you're buying overseas, make sure you factor in the exchange rate and any taxes.

 

4.     Make your own decorations. Not only will this save you money, it also gives your wedding a personal touch. If you don't think you're arty enough, enlist a friend who is to give you a bit of creative support.

 

5.     Keep it small. A small family ceremony can create a special and intimate event. And if you have it at home rather than hiring an expensive venue, you could save a fortune.

 

 

 

Stay on track

When you're planning a wedding, a sensible budget and savings plan can make all the difference. You might also need to adjust your household spending, and both make regular contributions to a joint savings account in the lead-up to the big day. Your Financial Adviser can help you manage your cash flow and your wedding budget so you can start married life on the right foot.

 

1 ASIC, 2015. 'How much can a wedding cost?' MoneySmart.

 

 

Speak to us for more information

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

                                  

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

Starting Young

Do you ever wish you started seeing a financial adviser earlier in life? Then consider setting your kids on their own financial advice journey sooner rather than later.

As every parent knows, children need to learn from their own mistakes, but that shouldn't be the case when it comes to their finances. In fact, young people can learn a lot from their parents when it comes to managing money – and this includes understanding the benefits of professional financial advice.

So if you have a child who's ready to hurtle into adulthood, here's how Robert Julian can help them make smart financial decisions from the get-go.

Learning to budget

Many young people find that money seems to just trickle through their fingers. In fact, 44% of people under 35 say they often buy things on impulse.[1] We can help, by teaching your child how to approach their financial independence responsibly.

A careful and realistic budget is your child's most valuable tool when it comes to staying on top of their cash flow. As the first step, we can show them how to balance their earnings against their expenses like rent, bills and groceries.

That way, your child will know when they have money left over for the occasional splurge. They'll also be able to see exactly how much they can spend on a night out without blowing the rest of the week's budget.

Creating a savings plan

When kids are just starting out in the workforce and living life to the full, they're often living from one paycheque to the next which can make it hard to save for life's necessities.

That's where we can play an important role, by explaining some basic savings strategies that could make a big difference in the long run.

For instance, just say your son or daughter wants to save for a car. By looking at their regular earnings and expenditure, we can help them work out how much they can afford to put away each week or month. We can also offer guidance on different types of financial products, like high-interest savings accounts, to find out which one is right for your child.

Managing debt

For many young people, there's a temptation to think of credit cards as free money. The result? They end up in a debt spiral that can take years or even decades to escape. That's why it's important for your children to learn to nip debt in the bud before it gets out of control.

We can help your child consolidate their debts – or at least prioritise them so they can focus on paying off the ones with the highest interest rates first.

With professional guidance, your child will also be able to put together an achievable repayment plan so they can avoid paying as much interest as possible. This will lay a strong foundation for your child to manage their finances successfully when they decide to take on an even bigger debt down the track, like a mortgage.

Looking to the future

When it comes to building a nest egg, time is our greatest asset. Chances are, retirement planning is probably the last thing on your child's mind right now. But even though they'll reap the benefits of compulsory employer super contributions throughout their working life, adding a little extra can go a long way towards funding a comfortable retirement.

With our specialised investment knowledge, we can also demonstrate how your child could benefit from salary sacrificing a small portion of their earnings into super. For example, if your 21 year old son or daughter earns $50,000 a year and salary sacrifices just $30 a week from their pre-tax income, they could end up with a $65,000 boost to their super by the time they retire.[2]

As with any long-term strategy, the sooner they start, the better. So talk to Robert Julian about your children's options for beginning their own financial advice journey.

 

Speak to us for more information

Speak to the team at JSA Accounting if you would like to understand more about how this information might impact your financial situation.

                                             

Important information 

Robert Julian of JSA Accounting (ABN 48 088 331 739) is an Authorised Representative of Count Financial Limited  ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. 'Count' and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 20 September 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.



[1] ASIC, Australian Financial Attitudes and Behaviour Tracker, Wave 4: Sept 2015 – Feb 2016.

[2] Calculated using ASIC's MoneySmart Superannuation Calculator, based on a retirement age of 67. Assumes an investment return of 5.7% pa, administrative fees of $50 pa, investment fees of 0.5% pa and tax on earnings of 7% pa.

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Robert Julian
Director - Financial Planning & Superannuation
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Agnes Vandepeer
SMSF Accountant
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Jessica Ni
Accountant
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Ivee Ben
Tax Accountant
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Amy Hou
Accountant
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