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Provision Newsletter

Superannuation and separation: Who keeps the money?

Posted On:Jun 15th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Depending on the situation, you might get some of your ex-partner’s super, or they may get some of yours. 

A divorce from your husband or wife, or a separation from your de facto, could mean a division of your assets and debts, whether they’re held separately or together, and superannuation is no exception.

Another thing to note is even if one of you

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Depending on the situation, you might get some of your ex-partner’s super, or they may get some of yours. 

A divorce from your husband or wife, or a separation from your de facto, could mean a division of your assets and debts, whether they’re held separately or together, and superannuation is no exception.

Another thing to note is even if one of you hasn’t contributed to super for many years, that person could still be entitled to a percentage of the other’s super.

We explain some of the key points below. And, if you’re a de facto couple living in Western Australia, remember different rules may apply as you’re not subject to the same superannuation splitting laws1.

How is super divided?

A superannuation agreement can be put in place before, during or after your relationship, as part of a broader ‘binding financial agreement’. This agreement can specify how super is to be split upon separation or divorce.

If you and your partner don’t have a binding financial agreement in place already but have agreed how you would like super to be split, an Application for Consent Orders can be filed in court without your attendance to formalise the arrangement you’ve both come to2.

If you can’t come to an arrangement together, you might instead look to obtain Financial Orders, under which a court hearing will determine how super is to be split between the two of you3.

Because there are rules around when super can be accessed (for instance, you may need to have retired from the workforce), remember that splitting super won’t necessarily result in an immediate cash payout, as super is treated differently to other assets and debts.

What does the process involve?

You may want or need to get information regarding the value of the superannuation that is to be split. And, you’ll need to provide various forms to the super fund to get this, which you can locate in the Superannuation Information Kit on the Federal Circuit Court of Australia website4.

You can do this if it’s your super fund, or your ex-partner’s super fund, but keep in mind fees for providing this information may be payable by the person who has requested the information5.

Depending on your circumstances, you may also wish to establish a ‘flagging agreement’ whereby the super fund is prevented from paying out any super until the flag is lifted, which may also result in a fee6.

Once the super splitting order is made, whether by consent or after a court hearing, you’ll also need to provide a copy of the order to the super fund for it to be effective7.

Splitting super – what to keep in mind

Some people prefer to avoid lengthy disputes by choosing to forgo some of their entitlements.

The trouble with doing this is that it may have significant financial consequences down the track, so it’s important to be armed with all the information you can to ensure the decisions you make are sound.

Working out what you’re entitled to can be complicated, which is why it’s important to seek legal advice, and regarding other financial matters please contact us on |PHONE| if we can be of asssitance .

Source : AMP June 2018  

Attorney-General’s Department – Superannuation splitting laws
2, 3, 4, 7 Federal Circuit Court of Australia – Family Law Matters (Superannuation)
5, 6 Attorney-General’s Department – Superannuation splitting frequently asked questions page 10, 21

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
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Has the housing bubble burst?

Posted On:Jun 12th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Driven by falling markets in Sydney and Melbourne, national house prices fell 0.1% in May, according to figures from property analytics group Core Logic. For the year from 31 May 2017 to 31 May 2018, prices were down 0.4% marking the first annual fall since October 20121.

But AMP Capital’s Head of Investment Strategy and Economics and Chief Economist Dr Shane Oliver

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Driven by falling markets in Sydney and Melbourne, national house prices fell 0.1% in May, according to figures from property analytics group Core Logic. For the year from 31 May 2017 to 31 May 2018, prices were down 0.4% marking the first annual fall since October 20121.

But AMP Capital’s Head of Investment Strategy and Economics and Chief Economist Dr Shane Oliver says despite the falls, talk of a property market crash is overdone.

Sydney and Melbourne

Prices in Sydney fell 0.2% in May, while Melbourne prices fell 0.5%. In Sydney, the median house price is now $871,454 while in Melbourne it sits at $717,0202.

And depending on whether you’re a buyer or seller in those market, there’s more good or bad news to come.

“We expect prices in Sydney and Melbourne to fall another 4% or so this year, another 5% next year and to still be falling in 2020. Overall, Sydney and Melbourne are likely to see a top-to-bottom fall of around 15% spread out to 2020,” Shane says.

But in the other capital cities, where the housing markets haven’t boomed in recent years to the same extent as Sydney or Melbourne, the forecast is different.

Perth, Darwin and Canberra

Prices in Perth and Canberra were both down 0.1% in May, while Darwin prices were down 0.2%3.

However, all three markets are up for the quarter, and Shane says that prices in Perth and Darwin look to be at or close to bottoming, while Canberra is likely to see moderate price growth in the months to come.

Hobart

Still the star performer, Hobart property continued its upwards surge in May, rising another 0.8%. Prices there are up 12.7% for the year from 31 May 2017 to 31 May 20184.

“The Hobart market remains very strong and the boom in Hobart is likely to continue for a while yet,” Shane says.

Brisbane and Adelaide

In Brisbane property prices rose 0.2% in May, while in Adelaide they performed even better, up 0.5%, with Shane forecasting more moderate price growth to come for both of these cities5.

Regional areas v capital cities

Taken as a whole, the combined capital cities markets fell 0.2% in May, but regional locations are performing better – when combined, regional markets saw prices rise by 0.2% in May, with Geelong and Ballarat in Victoria, the Southern Highlands, Newcastle and Coffs Harbour in NSW and Queensland’s Sunshine Coast among the best performers6.

“Home prices in regional centres are likely to hold up better with continuing modest growth as, generally speaking, they haven’t had the same boom as Sydney and Melbourne and so offer much better value and much higher rental yields,” Shane says.

What’s driving the property market?

Shane says that a combination of factors is behind the falling markets, including: 

  • Investors, people looking for interest-only loans and borrowers with constrained incomes and high expenses finding it more difficult to get finance, as banks have tightened their lending criteria due to pressure from regulators,

  • Tougher restrictions being imposed on foreign buyers by state and federal governments, 

  • Rising levels of housing supply, and

  • Buyers with more realistic price expectations.

Shane says that interest rates are likely to remain at their current levels until 2020 but adds that with “home price weakness at levels where the Reserve Bank of Australia started cutting rates in 2008 and 2011, we can’t rule out the next move in rates being a cut rather than a hike”.

He says that unless interest rates or unemployment unexpectedly skyrocket talk of a property market crash has been overdone.

Please contact us on |PHONE|if you seek further assistance .

1-6 Core Logic, Hedonic Home Value Index, May 2018.

Source : AMP 6 June 2018 

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
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Retirement planning – make the most of your money

Posted On:Jun 01st, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Little things can make a big difference to how long your money lasts in retirement.

When it comes to retirement planning, you’ll want to make the most of your money, after all you don’t want to fritter away the savings you’ve worked all your life to achieve. So, whether you’re living a comfortable or modest lifestyle in retirement, there are still ways to

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Little things can make a big difference to how long your money lasts in retirement.

When it comes to retirement planning, you’ll want to make the most of your money, after all you don’t want to fritter away the savings you’ve worked all your life to achieve. So, whether you’re living a comfortable or modest lifestyle in retirement, there are still ways to make your money go further in retirement and make every dollar count.

Here are five things to consider:

1. Sell your second car

If it’s not critical to your daily routine, not only could you top up your savings with the sale proceeds, but you will save on annual registration, insurance and maintenance costs. Find out which concessions are available to you in your state to travel by public transport. Or catch a taxi occasionally as it will still be cheaper than maintaining a second car.

2. Renegotiate your bills

Check with your providers about bundling to save on services such as technology (phone, broadband), and energy (electricity, gas). Or check other providers’ rates through comparison websites. Ask if your provider offers a pensioner or seniors discount and then put what you save towards other expenses.

3. Investigate discounts and rebates

Visit the Department of Social Services or the Department of Veterans’ Affairs websites to learn about benefits and payments, such as pensions, allowances, bonuses, concession cards, supplements and other services you can access. Or find out about the Seniors Card for discounts on travel, health, lifestyle, government services and finance in your state. 

4. Save on groceries

Do some research online to check for sales, half-priced or discounted items before you go shopping. You can also buy in bulk and then share the costs with your neighbours or family. Remember to check details such as use-by dates and the policy on returning items, as well as how and when you can take delivery of your groceries if you buy online. 

5. Put your bills onto direct debit

You can have your bills paid automatically from your bank account by setting up a direct debit. Most suppliers have this facility, so go online, check your bill or ring your provider to get the details. If you normally pay your bills in person, you’ll save time and effort by not travelling to the post office (or wherever you pay your bills). And this way, you’ll qualify for the pay on time discounts that some providers offer, and you won’t have to check your bills tray every day to remember to pay them when they’re due.

How long will your money need to last?

These days we need to look after our finances for much longer than we’ve had to in the past.

Now, if you’re a male aged 65, you could expect to live for another 19 years (to age 84) while a 65 year old woman’s life expectancy is 87 – which is around 30 years longer than our Aussie ancestors of the 1800s.1

So it’s important to make sure your funds will last the distance – both now and in the future. Please contact us on |PHONE| if you seek further assistance .

1 Australian Government, Australian Institute of Health and Welfare, Life expectancy, paragraph 3, 5.

Source : AMP 28 May 2018 

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

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Work expenses – what can you claim on tax?

Posted On:May 28th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

With the ATO keeping a close eye on deductions, make sure you’re across what you can and can’t claim.

If you’re claiming back some of the money you’ve spent as part of your job this year, it’s a good idea to ensure you’ve kept the appropriate records that may be required ahead of lodging your tax return.

The Australian Taxation Office (ATO)

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With the ATO keeping a close eye on deductions, make sure you’re across what you can and can’t claim.

If you’re claiming back some of the money you’ve spent as part of your job this year, it’s a good idea to ensure you’ve kept the appropriate records that may be required ahead of lodging your tax return.

The Australian Taxation Office (ATO) said recently Aussies needed to keep the necessary records, adding that it would be paying close attention to claims made for certain work-related expenses1.

If you’re not really sure what you should be claiming, here’s a rundown on what you should know.

What is a legitimate deduction?

When completing your tax return for the financial year (1 July 2017 to 30 June 2018), you’re able to claim deductions for some expenses, most of which will be directly related to you earning an income.

The main thing to remember is a work-related expense is only deductible if2:

  • you paid for it and were not reimbursed by your employer

  • it relates to you earning an income and was not for personal use

  • you have a record, such as a receipt.

Note, if the total amount you’re claiming is $300 or less, you generally won’t need receipts, unless your claim relates to car expenses, meal allowances, award transport payments, or travel3.

However, you may be asked to tell the ATO how your claim was worked out and explain why the claim is reasonable, based on the requirements of your occupation.

What if expenses are related to work and personal use?

If your expenses are for both work and personal use, you can only claim a deduction for the work-related portion, which could for instance be 50% of your phone and internet bundle.

Another example is say you go on an overseas study trip, but are taking a holiday at the same time, you wouldn’t be able to claim the entire trip as a work-related expense.

What are some typical examples of things you can claim?

Below are some common examples of tax-deductible work expenses and for more information, including deductions for specific industries and occupations, check out the ATO website.

  • Vehicle and travel expenses (which generally won’t include travel between work and home)

  • Clothing, laundry and dry-cleaning expenses (which typically only applies if you wear occupation-specific clothing or a uniform)

  • Home office expenses (such as computer, phone and internet costs, but only the proportion that relates to work and not your own personal use)

  • Self-education expenses relevant to your job (such as course fees, textbooks and journals)

  • Tools and equipment (such as sunscreen and sunglasses if you work outside, or laptop and relevant software if you work in an office)

  • Other deductions (which might include things like union fees).

Meanwhile, remember there are other things outside of work that you may be able to claim, such as personal super contributions, interest, dividend and other investment-related income deductions, as well as gifts and donations to deductible gift recipients.

Is there any help to make tax time easier?

You can use the myDeductions tool in the ATO app to save a record of your deductions throughout the financial year, which you can upload when you do your tax return or provide to your tax agent, who may be able to provide you with additional tips if your tax situation is a bit more complex.

To ensure you’ve got all the relevant information you need ahead of filing your tax return, check out the ATO’s tax time checklist. And, keep in mind, if you’re lodging your own tax return, you have until 31 October 2018 to lodge it, or potentially longer if you’re using a registered tax agent.

Please contact us on |PHONE| if you seek further assistance  

Source : AMP May 2018

ATO media release – Australians on notice to keep their receipts
ATO – Deductions you can claim paragraph 2
ATO – Work related expenses Rules for written evidence to substantiate deductions

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
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When to charge your kids board

Posted On:May 28th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

It’s not just those aged 20 to 24 living at home – about 5% of people 40 and over are also sharing a roof with mum and dad.

I recently came across a news story about a hapless New York couple, who have taken their 30-year old son to court in a last-ditch effort to get him to move out of

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It’s not just those aged 20 to 24 living at home – about 5% of people 40 and over are also sharing a roof with mum and dad.

I recently came across a news story about a hapless New York couple, who have taken their 30-year old son to court in a last-ditch effort to get him to move out of home. My first thought was “only in America”. But here in Australia, high rents and low housing affordability are seeing plenty of parents shelve plans for an empty-nester lifestyle as their 20-, 30- and even 40-something offspring show no signs of leaving the family home.

Research by Finder shows 40% of 20 to 24 year-olds still live at home, and even one in ten 30-somethings, and about 5% of people aged 40-plus still share a roof with mum and dad.

When does the rent-free ride stop?

Many parents relish having their children at home for longer, and there is a whole variety of reasons why multi-generation living is becoming more commonplace in Australia – anything from cultural norms to rising rents. While it can be unfair for one generation to shoulder the financial burden of many heads living under one roof, the issue of whether or not to charge adult children board can be very contentious.

Finder found some parents say the rent-free ride should stop when children turn 19. One in five believe their child should pay board when they land a job, and a similar proportion of parents is against the idea of charging board altogether.

The thing is, parents can be fantastic teachers when it comes to helping kids of any age manage their money and learn to live within their means to enjoy a financially sustainable future. Sure, if your son or daughter is studying or in an apprenticeship, they probably don’t have much cash to spare. But continually providing a free ride when your kids are earning an independent income can encourage an artificial view of how the world works.

More to the point, shelling out for adult kids can prove a drain on parents’ finances at a time when they are nearing retirement.

A stepping stone to independence

Charging your children board – even just a small amount, when they have the capacity to pay, is a stepping stone towards adulthood. And for parents who could be looking at spending 20 or more years in retirement, every bit helps to stretch their own money further.

If you’d prefer your adult child to start paying their way, try to approach the subject with tact. No one enjoys a surprise announcement that they’re suddenly expected to cough up cash on a regular basis. But be firm. However much you choose to charge, it is important that board is paid regularly. This sends a strong message that bills need to be paid on time, and they need to be paid first, ahead of life’s luxuries. Surely that is an essential life lesson we should pass onto our kids!

Source : AMP May 2018 

Paul Clitheroe is Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

 

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Is your home underinsured?

Posted On:May 15th, 2018     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Cold weather and faulty appliances can be a dangerous combination in winter – especially if your home is underinsured.

As we head into winter, now is the time to check your home heating appliances – and your home and contents cover. The cooler months typically see an uptick in home insurance claims with a rise of up to 47% in colder

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Cold weather and faulty appliances can be a dangerous combination in winter – especially if your home is underinsured.

As we head into winter, now is the time to check your home heating appliances – and your home and contents cover. The cooler months typically see an uptick in home insurance claims with a rise of up to 47% in colder states like New South Wales though Victoria leads the country for claims in winter. Sadly, these claims are often the result of fire damage caused by dodgy appliances.

Research shows some of the most common causes of home fires in winter involve embers escaping from open fireplaces, electric heaters being knocked over, faulty electric blankets and even bathroom heat lamps exploding when they become clogged with dust.
That makes it worth keeping your home safe by giving heating equipment a once-over and a thorough clean. If in doubt, consider replacing older appliances. It’s better to be safe than sorry.

Four out of five homes are underinsured

It also makes sense to check that your home and contents insurance is up to date. Winter doesn’t just bring increased risks of fire damage, it can also deliver some wild weather.

Most Australians have home building and contents insurance, but many of us don’t have enough cover to protect what may be our most valuable asset – and one that could go hand in hand with a substantial mortgage.

It’s estimated that four out of five Australian homes are underinsured – meaning the property is covered for less than 90% of rebuilding costs. It’s an easy trap to fall into because home owners, understandably, simply don’t know what it would cost to repair or rebuild their homes. Yet that’s exactly what the “sum insured” is supposed to represent. The bottom line is that a lot of people are relying on some very rubbery figures to insure their home.

Calculating rebuilding costs just got easier

Playing a guessing game with home insurance can mean finding yourself wildly out of pocket at claim time – something that can be financially and emotionally devastating. Frankly, it’s not worth the risk.

The good news is that a new home insurance calculator is available on the Understand Insurance website. It provides a clear picture of the likely cost to rebuild your home, and it’s based on data from building cost estimator Cordell using the most up to date information to provide real-time cost estimates.

The calculator is worth a look – a colleague put her home to the test and was amazed to see the cost to rebuild her place is double what she expected. It’s a problem that’s easily solved. Paying just a bit more in premiums often buys a lot more cover.

But it’s also important to have the right policy in place for your needs, and that’s something where people add a lot more value than online calculators.

Please contact us on |PHONE| to be sure your home and contents cover is a good fit for your situation, your home and your budget.

 

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Source : AMP 3 May 2018 

 

Important 
 
This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

 

 

 

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