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2015 Federal Budget

Despite being tamer than last year, the 2015 was a real mixed bag for families.  If all the measures pass the Senate some families will be better off others worse off.  So here are the 5 main proposed budget changes that you really need to know about.!

(1) If you have a child in childcare – there are big changes you need to know about.

From 1 July 2017, a new Jobs for Families childcare package is expected to come online and replace the Child Care Benefit and Child Care Rebate with a single child care subsidy.  This subsidy will be paid directly to child care providers, reducing upfront fees.

The government estimates that the changes will save working families $30 per week on average.  Families with an income of under $65,000 per year are guaranteed a minimum of 12 hours subsidised child care per week with 85% of their child care costs covered, up to an hourly cap. The subsidy gradually tapers to 50 per cent for families earning around $170,000 or more.  There will be no annual cap for families earning less than around $185,000.  Families earning around $185,000 or more will have a $10,000 annual cap on the total amount of assistance provided per child per year. This is $2,500 more than the current Child Care Rebate annual cap per child.

However, the catch is that the amount of subsidy that each family receives is going to be subject to an “activity test” that is tied to the amount of paid work, study or volunteering that the primary carer does.  The primary carer must perform a minimum of eight hours work or study per fortnight to receive any child care support.  The more hours worked the higher the subsidy will be.

Given the above “activity” test the big losers from this reform are families with a stay at home parent.  If their family income is between $65,000 to $170,000 per year income bracket will lose the Child Care Benefit that they are currently entitled to, with no compensation under the new system. These families will have to pay the full cost of child care without any government subsidy

(2) There will be a limited nanny trial

If you have a combined income of less than $250,000 and find it difficult to access mainstream childcare services – because you would shift work, or are in a rural or remote area or are a parent of a child with special needs – you will be eligible to use your childcare subsidies on in-home nannies. Payments will be paid directly to the childcare provider.

(3) If you receive Family Tax Benefit payments there are several changes you need to know…

As of July 1, families where one parent earns more than $100,000 will no longer be eligible for Family Tax Benefit B.   This is one of the few changes from last year’s budget that has actually passed the Senate.

However, to fund the new childcare measures the government is looking to enact some other changes including:

  • Restricting the Family Tax Benefit B to families with children under six.  To help single-parent families receiving Family Tax Benefit A and no longer eligible for Family Tax Benefit B there will be an additional annual payment of $750 for each child aged between six and 12.
  • Freezing the indexation on both the Family Tax Benefit A and B for two years ie. the benefit won’t go up with inflation.
  • Also the large family supplement which is paid to those with 4 or more children will be cancelled.

(4) If you’re planning to have a baby… you could be worse off than under the current system.

If you receive paid parental leave through your employer you will no longer be eligible to receive the government funded scheme which is worth a maximum of $11,538.90.

(5) If you run a small business you could be a big beneficiary.

The government has announced a $20,000 limit for immediate asset write-offs for small businesses with annual turnover less than $2 million from 1 July 2015.

Lots of these measures will have to pass the hostile senate and as we know now, lots of the things that were announced in last year’s budget simply did not make it through.  So, what the budget actually means for families could be completely different story when the political process is finished, so I will let you know how actually things go!!!

If you liked this you might also like:

Simple Savings Ideas That Absolutely Everyone Can Use

5 Websites That Will Help You Make Or Save Money

How To Pay Off Your Mortgage Faster

5 Financial Tips You Need To Know Now You Are A Parent

If you would like to read more from me don’t forget to sign up to my weekly email using the form below:



Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

 

 

21/05/2015 7 comments
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5 Easy Way To Sort Out Your Finances 2015

I cannot believe 2014 has flown by so fast!!!  It feels like one minute it was January, then June, then for me November and December have just rolled into one!!!  Given 2015 is approaching fast, here are some easy ways you can sort out your finances in time for the new year!

1) Do a budget

Oh! I hear you groan. Don’t worry, I understand!  But the truth is that a budget does not have to be a complicated scary beast and it is the BEST way to keep control of your finances.  I used the MoneySmart website’s free budget planner and it was dead easy to get my budget done.  If you want to check out the planner click here, or if you want to read about how I did my budget click here.

2) Boost your income

There are lots of ways to boost your income but one of my faves is making sure I am getting all my entitlements from the government.  For this I use the Centrelink Payment Finder – it is fast and alerts me to payments that I might be eligible for.  Also I like to do an unclaimed money search.  It takes all of 20 seconds and is completely free. Potentially it could find you any lost bank accounts, shares or life insurance policies that you might have forgotten about.  My boss found $2000 in lost super by doing this search so it is definitely worth trying it.

3) Consolidate your super

Don’t feel bad if you have more than one super account, pretty much everyone does.  Apparently there are roughly 3 superannuation accounts for every working Australian! So you are not the only one!  Consolidating is way easier than you think, just go to the Australian Tax Office’s SuperSeeker site and you will be able to consolidate your accounts online.  No paper involved!!!  So look into consolidating your accounts, it is easy, free, and it will save you on fees. That means more money for your retirement.

4) Revisit your insurance

Revisit your policies:  do you have enough insurance?  Have your circumstances changed?  Are you getting the best deal for you and your family?  Insurance is not just a case of ‘set and forget’. Things change and when the worst happens and you really need it, you want to be sure that you are covered.

5) Set yourself a 2015 savings goal and work towards it

Whether it is a family holiday, paying off debt, or presents for the kids, set yourself a goal and use 2015 to work towards it.  Click here if you would like some ideas on how to save and here to see how to set a goal and work towards it.  Remember, it is the small things that count, so use the New Year as a fresh start and you will be amazed what you can achieve.

As 2015 approaches it is a great time to think about your financial future and get your financial life in order.  This will be my last post for 2014 before taking some time off to be with my family.  Thank you for reading my posts, your support is greatly appreciated.  I wish you and your family a fantastic Christmas and a wonderful New Year and I will catch you all some time in January 2015!

Shelley

If you liked this you might also like:

15 Ways To Save Money In 2015

How Much Your Credit Card Debt Is Really Costing You

5 Websites That Will Make Or Save You Money

If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:




 

Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

21/12/2014 6 comments
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superannuation co-contribution

I am so excited – this year I qualify for the government’s superannuation co-contribution scheme and I am absolutely going to take it up!!  Let’s face it, there are not many ways you can get $500 for free, particularly from the Government!!!  However, this is one of them and it is really easy!!! Who would have thought!!!

So here is how you do it!  Pretty much to qualify for the full benefit of $500 you have to earn less than $33,516 and put an after-tax contribution of $1000 into your superannuation fund by the 30th of June 2014.  As long as you have put the contribution into your fund and you file your tax-return, the $500 will automatically be paid into your fund by the government.  (Click here to see the full criteria).

If you earn between $33,516 and $48,516, you will still get some benefit just not the full $500.  (Click here to check the calculator on the ATO site to see how much you will get).  So at its best the superannuation co-contribution scheme means you put in $1,000 and they give you $500 for free! There are not too many legitimate investments that I know of in which you can a 50% return, for zero risk, guaranteed.  It is the closest thing I have seen to money for nothing.  Nothing is better than that 🙂

Try and take advantage of this if you do qualify.  This is a fantastic scheme to help those of us who are working part-time while looking after our little-ones to continue to build our superannuation balances.  Sadly stay at home mums do not qualify for the co contribution, as while they are doing amazing work, this work is unpaid (unless the ATO start counting hugs and kisses :-)).  However, click here if you are a stay at home mum to read about other ways you can boost your superannuation balance instead.

p.s To find out how to make an after tax contribution to your superannuation fund give them a call.  I rang mine and the process is really easy.

If you liked this you might also like:

How to boost your superannuation balance while you are a Stay At Home Mum

Your superannuation and your children: one thing you really should know

How to pay off your mortgage faster

Women and superannuation: how do you make sure you have enough?

3 easy ways to find your lost superannuation

How much do you save by shopping at Aldi?

Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor or accountant for advice specific to your individual circumstances.

19/06/2014 13 comments
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Federal Budget 2014

Ok if the 2014 Federal Budget was all a bunch of gobbledy gook to you then do not worry you are certainly not the only one!!!!  Here is my take on what you really need to know about what was announced in the Budget and how it will impact you and your family!

  • If you get the Family Tax Benefit part B the rules have changed.  Only Families on a income of less $100,000 with children under six qualify.  Though existing recipients of Part B with children six or older will continue to receive payments for two years.
  • Planning to have a baby?  The new paid maternity scheme to start in July 2015 will have scheme payments capped at a payment of $50,000, as opposed the originally promised $75,000.
  • Going to the Doctor will cost you more:  Anyone who sees a doctor and gets bulk billed will pay $7 every time they go.  Non-bulk-billed patients will pay an extra $5 per visit.  Children under the age of 16 and concession card holders will have the payment capped at 10 visits.
  • You will pay more for medicines:  Medication covered under the Pharmaceutical Benefits Scheme (PBS) will increase by $5 and PBS safety net thresholds will kick in only after increased out-of-pocket expenses.  Concession card holders will pay 80c more for PBS medicine, and spend an extra $61.80 before the safety net kicks in.
  • Petrol Prices will rise:  The government will raise the petrol tax (fuel excise) twice per year in line with inflation.
  • Compulsory employer super contributions to pause at 9.5% for three years.  They are currently at 9.25%, so will go up once more in July 2014.  The previous plan was to increase them to 12% by 2019.
  • Pension age has increased to 70 for anyone currently under 50.
  • First Home Saver Accounts (FHSA) have been axed.  No more new accounts can be opened and as of July 1 the government will end its 17 per cent co-contribution.  In July 2015 the tax and social security concessions associated with the scheme will be withdrawn and the restrictions on withdrawals will be removed.
  • If you work for the public service, there are plans to cut 16,500 public service jobs.
  • Those earning over $180,000 will pay an extra 2% per annum tax for the next three years, this is the “Budget Repair Levy”.
  • For those with kids at university or thinking of going:  Our children will have more debt and start paying it back sooner.  Universities will have the ability to set their own fees, so prices will most likely rise. Scholarships will be available to disadvantaged students.  From July 2016, students will have to pay their loans back sooner, starting once they earn over $50,638 a year.
  • For the unemployed:  Those aged under 25 will need to “earn or learn”. People under 30 will need to wait six months to be eligible for Newstart and once on payments will be subject to a work for the dole scheme.

So there it is and it was a tough one!!!!  Of course there was lots more bits and pieces, but these are the essentials that I think could have the greatest impact on your family.

If you liked this post, you might also like:

How To Pay Off Your Mortgage Faster

How Much Can You Save By Shopping At Aldi?

How To Create A Budget

3 Things You Should Know When Saving And Investing For Your Children

 

Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

16/05/2014 15 comments
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Increase Your Superannuation Balance

No this is not a scam!  Yes this is legit!  Though I am very proud of you for being skeptical because you should be when it comes to your money.  However, if you qualify I have a way to make a 50% return for zero risk and boost your super balance in the process.

This is through the government’s superannuation co-contribution scheme.  It is really simple.  If in the upcoming financial year you earn less than $33,516 and you put a contribution of $1,000 of after tax money into your superannuation account then the government will put in an additional 50 cents for each dollar (up to $500).  You put in $1,000 and they give you $500 for free!  There are not too many legitimate investments that I know of in which you can a 50% return, for zero risk, guaranteed.  It is the closest thing I have seen to money for nothing.   Between $33,516 and $48,516 the scheme phases out but you still get a benefit.  (Click here for the ATO’s calculator and the full details to see if you qualify).  You might qualify if you work part time or if you only work part of the tax year post returning to work.  It is definitely something to check out.

Also this year if you earn less than $37,000, the 15% superannuation contributions tax that is paid when your superannuation contributions are made by your employer, will rebated back to your superannuation fund by the government.  The official name of the scheme is the Low Income Super Contribution (LISC).  If you qualify, this scheme could increase your super balance by up to another $500. Everything helps when you are trying to save for your retirement.

Another way to boost your superannuation for free is to find any lost super you might have.  Losing your super is easily done, especially when you have changed jobs a few times.  There are three main ways to find your superannuation and the best part is that they are all free!

(1)    SuperSeeker:  The ATO Super Seeker service searches the ATO’s databases for your lost super accounts.  Click here to find out more.

(2)    AUSfund:  They look after the lost super of many Australians for some of the biggest super funds in Australia. Click here to find out more.

(3)    Your Current Super Fund:  Often they have a lost super service, where they find your super for you.  Super funds have this service as they too are keen to see you boost your super account with them 🙂

Just, while I have you on the topic of superannuation.  You should know that this financial year your compulsory superannuation contribution made by your employer have increased to 9.25% of your package from 9%.  So everyone who is paying super will be getting a super boost regardless 🙂

If you enjoyed this post you also might like to read these posts:

How to boost your superannuation balance while you are a Stay At Home Mum

Your superannuation and your children: one thing you really should know

Women and superannuation: how do you make sure you have enough?

3 easy ways to find your lost superannuation (so easy, even my hubby could do it!)

Women and superannuation: how do you make sure you have enough?

How to pay off your mortgage faster

Happy Investing!

 

Money Mummy

* Please note this is for your general information only and does not constitute financial advice.

23/07/2013 11 comments
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After spending a cosy night on the couch with a glass of wine and Mr Swan on the telly, the budget turned out to be a bit of a non event.  As with most budgets most of the unpalatable stuff had already been leaked and interestingly there was none of the major vote grabbing hand outs that you would expect from a government facing an election in four months time.  The fastest summary I can give from a family point of view is, baby bonus scrapped, Medicare Levy up and wave good bye to your promised tax cuts.  Oh and if you are a smoker the cost of your cigarettes will increase too.  So here is the low down on some of the things I think you really need to know from the Budget….

(1) Baby Bonus Scrapped

So let’s start with probably the most controversial policy change from a family point of view the scrapping of the baby bonus.  Under the previous scheme, stay-at-home mothers in families with incomes of up to $150,000 received a $5000 payment on the birth or adoption of their first child and $3000 for each subsequent child.  The scheme will now be changed to the much lower amounts of $2000 for the birth or adoption of a first child or each child in multiple births, and $1000 for second or subsequent children. Also, the threshold income below which you can qualify for the scheme will drop considerably to $101,000 gross income per couple from $150,000.  The threshold for a second baby will be about $112,000.  Under the new scheme, families will receive an initial payment of $500, with the rest to be paid in seven fortnightly instalments.  The old baby bonus scheme will be scrapped from March 1st, 2014.  So if you want to claim you had better get moving 🙂

(2) Minor Changes To Paid Parental Leave Means Better Access For Those Having Another Child

Under the current scheme women must work for 10 of the previous 13 months to qualify for the government’s paid parental leave. Post the Budget, parents can include time on the government-paid parental scheme as work if it occurs in the previous 13 months for a subsequent child.  This move broadens the definition of the work test and means that more women will be able to access government paid parental leave when they have another baby.  By the way, its handy to know that employer funded parental leave can already be included as part of the work test, where it occurs in the previous 13 months.

(3) Other Changes to Family Payments

The government will freeze the upper income test limit of $150,000 for the dependency tax offsets, Family Tax Benefit Part B, the Paid Parental Leave Scheme and Dad and Partner Pay for the next three years.  Also, those of you with teenagers the government will stop paying the Family Tax Benefit Part A at the end of the calendar year in which your teenager completes school. The government are also reducing the time in which families have to claim their Family Tax Benefit entitlement or Child Care Rebate from two years to one.  So it definitely pays to get on top of these things early and not wait too long or you might miss out!

(4) Kiss goodbye to your promised tax cuts

We had been promised tax cuts that were going to come into effect on the July 1 2015 but these are now no longer going to happen.  My understanding is they were to help out with the increase in costs associated with the Carbon Tax.  Supposedly the tax cuts have been deferred but that is most likely political speak for “never going to happen”.

(5) Medicare Levy increased from 1.5% to 2%

From July 1 2014 it is proposed that the Medicare levy increase from 1.5% to 2% to fund DisabilityCare, the Government’s national disability insurance scheme.  It is estimated that, on an income of $50,000 per year this increase will be an extra $250 in levy, on $75,000 it works out to be an extra $375 and on $100,000 per annum the increase adds an extra $500 to your Medicare Levy.  No doubt most will agree that the increase in the levy is going to an area in desperate need of funding and long over looked by both sides of the political spectrum.

Of course, there were many more things announced but I think the ones outlined above are some of the most important for Australian families.   As we are facing an election later this year, all of these changes are only proposed and if the coalition gain power it is highly likely that some of these measures will be changed.  I will keep you informed!

Happy Investing!

Money Mummy

* Please note this is for your general information only and does not constitute financial advice.

15/05/2013 2 comments
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It is not very often you get something for free.  So, for those of you who are having a baby or thinking of having a baby here is a new government payment to keep in mind.  It gives dads two weeks paid parental leave at $606 per week before tax.  It is available to eligible working dads or partners (including adopting parents and same-sex couples) who care for a child born or adopted from the start of 2013.

As with most government payments there are conditions that need to be met including that the recipient of the payment:

  • provides care for a child born or adopted from 1 January 2013
  • are an Australian resident
  • meets the work test, which requires they have to have worked for:
    – at least 10 of the 13 months before the date of the Dad and Partner Pay period starts, and
    – at least 330 hours in that 10 month period (just over a day a week), with no more than an eight week gap between two consecutive working days
  • had an individual adjusted taxable income of $150 000 or less in the financial year either before the date of the claim or the date of the start of the Dad and Partner Pay period (whichever is earlier), and
  • is on unpaid leave or not working during your Dad and Partner Pay period.

This payment must be claimed by the father or partner and the mother still may be eligible for Parental Leave Pay or the Baby Bonus.  The mother does not need to get Parental Leave Pay for the father or partner to get Dad and Partner Pay.

The way it works is the father or partner negotiates the unpaid leave with their employer then applies for the payment separately.   The payment can be taken any time in the first year after birth or adoption.  A claim can be lodged up to three months before the birth or adoption or within the first year.

Please click here for the full details.

This payment did not exist when we had our little Miss Money back in 2010, so I am not sure how easy it is to claim but I would love to hear from anyone who has claimed it and how easy it was to do so?

Happy Investing!

 

Money Mummy

13/03/2013 0 comment
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