General insurance is a “boring” subject, however protecting what you have is just as important in your retired life as it was in your working life.
Here is a couple of thoughts to get you started:
Shop around for insurance like you shop around for a car or plan a holiday
When you’re buying a car or planning a holiday, insurance is probably the last thing you want to think about. But you may need it and it’s important to spend a little bit of time shopping around.
Having a good insurance policy can make all the difference to your pocket, both now and if the worst happens and you need to make a claim.
Don’t just accept the insurance policy that is offered by the car yard or the travel agent. Remember, the agent may be getting a commission for selling you a particular policy, even though it may not be the best one for you.
Shop around. The Internet and phone calls make this easy. Even if you make just a few quick phone calls to different companies, you’ll find that the price might vary by $100 or $200 or more.
Before you sign a policy, make sure you understand what the insurer will and will not cover. For example, some travel insurance policies might not cover you if you are injured when bungy-jumping or white-water rafting. If you don’t choose a policy with the right coverage for you and your circumstances, you could end up with hefty expenses to pay.
Be truthful
When you apply for insurance, you’ll have to provide lots of details to the insurance company. For example, if you are getting car insurance, you may be asked about your driving record, whether the car has been modified and other things. Your answers will help the insurance company decide how risky it will be to insure you and therefore how much your policy will cost.
Don’t be tempted to stretch the facts! If the worst happens and you need to make a claim on your policy, your insurer may have grounds for refusing to pay your claim.
This goes for renewals as well. You must tell the insurance company about any changes in your circumstances each time you renew your policy.
Think about insurance before you choose your car
If you are buying a car, it is good to think about insurance before you choose the type of car that you want.
For example, a sporty car might look great, impress your friends and satisfy the midlife crisis, but it might cost you $200 or $300 more to insure than a basic car. If your dream car has got modifications, like mag wheels or a bigger engine, insurance might cost you more again. It’s better to be prepared for these extra costs than to get an unpleasant surprise after you have bought the car.
Home insurance – building and contents
For most of us, our largest and most important asset is our home. So, are you financially prepared for a flood, storm or fire, or even the minor mishaps such as broken windows, theft or appliance mishaps?
Building and contents insurance are in fact two different policies. Depending on your circumstances, you can purchase a combined policy, or you could purchase just a policy for your building or just your contents. For example, if you are renting your current home you will probably only need to purchase contents insurance, the landlord should have their own building insurance policy to cover the actual property.
Do not underinsure your home or the contents on the false premise of saving money because of cheaper premiums. If a fire or cyclone were to strike your home and you needed to rebuild, having an insurance policy which only covers 50 or 60 per cent of the rebuild cost would create a huge hole in your retirement savings.
Source: Mark Teale | Centrepoint Alliance
What does the election result mean for our super?
/in Financial Advice General Info /by Shellie FisherWith the return of a Coalition government, we can expect to see some of the super initiatives announced in the 2019 Budget, and in legislation that lapsed when the election was called, being reintroduced to the Parliament.
So, we can expect to see:
Increase in contribution age limits
The 2019 Budget included a proposal for people aged 65 and 66 to be able to make super contributions without having to meet the current “work test”. This proposal is now expected to be introduced to Parliament in the near future. It is due to take effect from 1 July 2020.
Extending the age limit for the three-year bring forward
Under current law, an eligible person may bring forward up to three year’s non-concessional contributions and contribute up to $300,000 in one year, provided they were aged 64 or younger at the start of the financial year in which they make their contribution. This age limit is to be extended to 66 from 1 July 2020.
Extending the age limit for spouse contributions from 69 to 74
People who make contributions for an eligible spouse up to 74 years of age will be able to claim a tax offset of up to $540. The age limit is being increased from the current 69 years. This will apply from 1 July 2020, however, a receiving spouse aged 67 or older will need to have met the work test.
Insurance opt-in
While legislation affecting insurance held inside super for people with an inactive account (haven’t made contributions for 16 months) has already been enacted. We can expect to see the measures extended to those with account balances less than $6,000 and for members under 25 years of age.
In each case, members will need to opt-in if they wish to have insurance cover through super.
SMSF membership to extend to 6 members
The legislation relating to the increase of SMSF membership to 6 people (up from 4) lapsed when the election was called. We can expect to see this legislation being re-introduced into the new Parliament.
Opting out of Superannuation Guarantee
Where high-income earners work for more than one employer, their superannuation guarantee contributions often result in a breach of the concessional contribution cap. The Government has plans to allow affected employees to opt-out of superannuation guarantee for all but one employer so as to avoid breaching the concessional contribution cap of $25,000.
Salary sacrifice arrangements
Integrity measures covering aspects of salary sacrifice contributions to super and their potential impact on superannuation guarantee contributions lapsed when the election was called. We can expect to see these measures reintroduced by the new Coalition government.
If you have questions about these proposed measures, and opportunities they present, you should consider meeting with a qualified financial planner.
Source: Peter Kelly | Centrepoint Alliance
Carers – are you eligible for a government payment?
/in Financial Advice General Info /by Shellie FisherAs we age our bodies and minds start to become a little less stronger. We will find that we are relying on care provided by relatives, our partners or by the government.
The role of the individual carer is extremely important and in many cases, a selfless act for a person that they love.
There are 2.7 million unpaid carers in Australia of which approximately 856,000 are primary carers, those who provide most of the ongoing informal assistance to a person. Two-thirds of these primary carers are females with an average age of 55.
To assist these unpaid carers, the government does offer three payments. These payments will depend on the carer’s circumstances and the level of care that they are providing.
The first of these payments is the Carer Payment. This payment is similar to the age pension and is subject to the same income and assets test that is applicable to the age pension. However, there is also an income and assets test which is applied to the care receiver and if the care receiver’s income and assets are above these levels then no Carer Payment can be made to the carer. The current maximum Carer Payment for a single person is $916.30 per fortnight.
The second payment is the Carer Allowance. This is a fortnightly payment, currently $129.80 which can be paid in addition to the Carer payment, is not subject to an assets test but is subject to an annual adjusted taxable income threshold of $250,000.
The third payment is the Carer Supplement which is an annual lump sum payment of $600 paid to assist with the costs of caring for a person with a disability or a medical condition. You are entitled to this payment if you are receiving either the Carer Payment or the Carer Allowance.
All these payments are subject to the provision of medical evidence to show that the care receiver does have a severe disability, medical condition or is very frail in their old age and do require substantial daily care.
This is a complex area, so if you feel that in your current situation you are providing a substantial level of care for a parent, partner or any person, you may qualify for one or all three payments, do not hesitate talk to someone who is able to help and provide direction.
Source: Mark Teale | Centrepoint Alliance
Federal Budget Overview – 2019
/in Financial Advice General Info /by Shellie FisherOn 2 April 2019, The Hon Josh Frydenberg delivered his first Budget as Federal Treasurer.
The good news is that the Budget has forecasted a return to surplus of around $7.1bn in 2019-20. Australian will earn more than it spends!
Ten million low and middle-income earners are the winners as they will receive an immediate tax cut, which is being delivered by way of an increase in the Low and Middle-Income Tax Offset (LMITO). The increase will be available for the next three years and will see the LIMITO more than double. An amount of $1,080 for Australians with taxable income of between $48,000 and $90,000. A more modest offset is available for those on lower incomes, and the offset cuts out when taxable income reaches $126,000.
It has been estimated that by 2024, 94% of Australians will have a marginal tax rate of 30% or less.
By contrast, the top 5% of income earners will pay a third of all taxes collected.
Australians who receive a range of government income support benefits will receive a one-off payment of $75 for singles, and $125 for couples, to help with their energy bills. This payment is planned to be made before 30 June 2019.
Superannuation was largely untouched in this year’s Budget, however, from 1 July 2020, people aged 65 and 66 will be able to make super contributions without having to meet the work test and the maximum age spouse contributions can be made is to be extended from 69 to 74.
Infrastructure and health received injections of cash.
Expect to see the skyline silhouetted with cranes. The Government has announced further significant spending on roads, rails, airports and the like.
Included in the Budget was an allocation of $500m to get cars off the roads by building more commuter car parks, therefore encouraging people to travel by train. For anyone who tries to navigate capital city peak hour traffic, this will be welcome news.
Small to medium businesses will benefit from the planned increase in the instant asset write-off for purchases of up to $30,000.
Older Australians have not been ignored with an additional 10,000 aged care home care packages being announced and a further 13,500 residential aged care places being made available. With the aged care system being strained with the increasing demand for services and support this is welcome news but sadly is nowhere near enough.
Additional funding has also been directed towards the delivery of primary and frontline health care.
Legislation will need to be passed in order for the changes to be implemented.
Source: Peter Kelly | Centrepoint Alliance
Health Insurance – changes on the way!
/in Financial Advice General Info /by Shellie FisherEach year on the 1st April, the premiums for private health insurance increase. This year there is going to be a lot more than premium increases. The Australian Government is making changes that will impact on the cover held by members.
Not only are significant changes being made to the way hospital cover is structured, but a number of ‘extras’ type items are being removed. This is mainly in the area of natural therapies, like naturopathy, homoeopathy, pilates, reflexology, yoga and the like.
In order to try and simplify the comparison of cover between health insurers, hospital cover will be categorised as ‘basic’, ‘bronze’, ‘silver’ and ‘gold’. Naturally, the gold cover will offer the broadest cover and will also be the most expensive.
The basic policies will cover very little indeed. These have previously been described as ‘junk policies’. That is policies that allow people to avoid paying the Medicare surcharge, but which offer very little cover at all.
Bronze policies will cover 18 categories of services in a private hospital including breast, skin and prostate cancer surgery, broken bones, joint reconstruction (but not joint replacement), and ear, nose and throat surgery.
Silver will cover all the services offered under the basic and bronze cover levels plus an additional 8 categories of cover including heart surgery, surgery for lung cancer, bone marrow transplants and medically necessary plastic and reconstructive surgery.
Gold is the top cover and if you are planning on having a baby and you want the expenses covered by your private health insurance, the ‘gold’ policy is the one you will need.
Private health insurance has always been a bit of a ‘dark science’. For many of us, selecting the cover we think is appropriate for our needs is a bit of a stab in the dark. We sign up and hope like mad that if we ever have a claim, our private health insurance will cover us.
So, if you have private health insurance, or are thinking of taking it out, spend a little time exploring the options, and how your cover may change from April this year.
For more information, particularly in relation to the changes to hospital cover, have a look at the following link: Health Insurance Reforms – April 2019.
Source: Peter Kelly | Centrepoint Alliance
Insurance – protecting what you have
/in Financial Advice General Info /by Shellie FisherGeneral insurance is a “boring” subject, however protecting what you have is just as important in your retired life as it was in your working life.
Here is a couple of thoughts to get you started:
Shop around for insurance like you shop around for a car or plan a holiday
When you’re buying a car or planning a holiday, insurance is probably the last thing you want to think about. But you may need it and it’s important to spend a little bit of time shopping around.
Having a good insurance policy can make all the difference to your pocket, both now and if the worst happens and you need to make a claim.
Don’t just accept the insurance policy that is offered by the car yard or the travel agent. Remember, the agent may be getting a commission for selling you a particular policy, even though it may not be the best one for you.
Shop around. The Internet and phone calls make this easy. Even if you make just a few quick phone calls to different companies, you’ll find that the price might vary by $100 or $200 or more.
Before you sign a policy, make sure you understand what the insurer will and will not cover. For example, some travel insurance policies might not cover you if you are injured when bungy-jumping or white-water rafting. If you don’t choose a policy with the right coverage for you and your circumstances, you could end up with hefty expenses to pay.
Be truthful
When you apply for insurance, you’ll have to provide lots of details to the insurance company. For example, if you are getting car insurance, you may be asked about your driving record, whether the car has been modified and other things. Your answers will help the insurance company decide how risky it will be to insure you and therefore how much your policy will cost.
Don’t be tempted to stretch the facts! If the worst happens and you need to make a claim on your policy, your insurer may have grounds for refusing to pay your claim.
This goes for renewals as well. You must tell the insurance company about any changes in your circumstances each time you renew your policy.
Think about insurance before you choose your car
If you are buying a car, it is good to think about insurance before you choose the type of car that you want.
For example, a sporty car might look great, impress your friends and satisfy the midlife crisis, but it might cost you $200 or $300 more to insure than a basic car. If your dream car has got modifications, like mag wheels or a bigger engine, insurance might cost you more again. It’s better to be prepared for these extra costs than to get an unpleasant surprise after you have bought the car.
Home insurance – building and contents
For most of us, our largest and most important asset is our home. So, are you financially prepared for a flood, storm or fire, or even the minor mishaps such as broken windows, theft or appliance mishaps?
Building and contents insurance are in fact two different policies. Depending on your circumstances, you can purchase a combined policy, or you could purchase just a policy for your building or just your contents. For example, if you are renting your current home you will probably only need to purchase contents insurance, the landlord should have their own building insurance policy to cover the actual property.
Do not underinsure your home or the contents on the false premise of saving money because of cheaper premiums. If a fire or cyclone were to strike your home and you needed to rebuild, having an insurance policy which only covers 50 or 60 per cent of the rebuild cost would create a huge hole in your retirement savings.
Source: Mark Teale | Centrepoint Alliance