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Provision Newsletter

Salary sacrificing super

Posted On:Sep 20th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

If you make voluntary super contributions through a salary sacrifice agreement you should be aware of how your contributions will affect your super balance. You can agree with your employer for your voluntary contribution to be in addition to your employer’s compulsory super contribution.

If you are deciding whether you should salary sacrifice some of your income into your super or

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If you make voluntary super contributions through a salary sacrifice agreement you should be aware of how your contributions will affect your super balance. You can agree with your employer for your voluntary contribution to be in addition to your employer’s compulsory super contribution.

If you are deciding whether you should salary sacrifice some of your income into your super or you are already salary sacrificing, you may want to find more information or check your entitlements under the Fair Work Act 2009.

One example of a salary sacrifice arrangement is to have some of your salary or wages paid into your super fund instead of to you.

Salary sacrificed super contributions are classified as employer super contributions, rather than employee contributions. This reduces the amount of super guarantee contributions that your employer is required to make for you, unless the terms of the agreement between you and your employer specify that they continue to pay the minimum super guarantee amount. If you make super contributions through a salary sacrifice agreement, these contributions are taxed in the super fund at a maximum rate of 15%. Generally, this tax rate is less than your marginal tax rate.

The sacrificed component of your total salary package is not counted as assessable income for tax purposes. This means that it is not subject to pay as you go (PAYG) withholding tax.

If salary sacrificed super contributions are made to a complying super fund, the sacrificed amount is not considered a fringe benefit.

The Fair Work Commission regulates employment agreements and conditions. To check your conditions contact Fair Work CommissionExternal Link.

The Fair Work Ombudsman has information on deducting pay & overpaymentsExternal Link. You can contact the Fair Work Ombudsman on 13 13 94.

See also:

Salary sacrifice limitations

If there are no limitations specified in the terms of your employment, there is no limit to the amount you can salary sacrifice. However, you should also consider whether the:

  • additional salary you wish to sacrifice will cause you to exceed your concessional (before-tax) contributions cap and attract additional tax – this cap limits the amounts that can be contributed to your super fund and still receive the concessional tax rate of 15%

  • salary amount you sacrifice will attract Division 293 tax – this occurs when you have an income and concessional super contributions of more than

    • $300,000 in one year, before 1 July 2017

    • $250,000 in one year, from 1 July 2017.

For further assistance or information please contact us on |PHONE| 

Source:

Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-my-super/Salary-sacrificing-super/

Important:
This 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. 

Any information provided by Australian Tax Office detailed above is separate and external to us and our Licensee. Neither we nor our Licensee take any responsibility for their action or any service they provide.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

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Can I afford to have fun in retirement?

Posted On:Sep 11th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

If you’re in or approaching retirement, you may be prioritising things such as living costs, utility bills, health care and even helping the kids out with their future financial goals.

With many Australians looking at a retirement of 30 years or more, another thing to give some thought to is keeping some money aside for your own pastimes and recreation.

It’s important to think

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If you’re in or approaching retirement, you may be prioritising things such as living costs, utility bills, health care and even helping the kids out with their future financial goals.

With many Australians looking at a retirement of 30 years or more, another thing to give some thought to is keeping some money aside for your own pastimes and recreation.

It’s important to think about, particularly as Australians are remaining active for a lot longer.1

What activities are on my to-do list?

The things you may want to do for fun in retirement could include a range of things, such as:

  • Sport—golf, cycling, yoga, pilates, dancing, water aerobics

  • Hobbies—fishing, sailing, photography, drawing, woodwork

  • Volunteering—hospitals, soup kitchens, animal shelters

  • Club associations—Rotary, Leagues, Surf Life Saving

  • Entertainment—cinemas, stage shows, concerts and events

  • Travel—road trips, caravanning, interstate breaks, overseas holidays

  • Dining out—restaurants, food fairs, beach barbecues, picnics

  • Friendly tournaments—bridge, chess, trivia.

How can I budget for the things I enjoy?

If you need a guide, each quarter the Association of Superannuation Funds of Australia (ASFA) benchmarks the annual budget needed to fund a comfortable and modest standard of living in retirement.

According to June 2017 figures, individuals and couples, around age 65, need an annual budget of $43,695 and $60,063 respectively to fund a comfortable lifestyle in the years post work—assuming they own their home outright and are in relatively good health.2

Broken down into a weekly budget, singles need on average $837.99 and couples around $1,151.90.3

How much am I likely to spend on recreation?

According to ASFA, singles and couples living a comfortable lifestyle in retirement would spend between $225.79 and $309.42 of their weekly budget respectively on leisure and recreation4.

This takes into account a broad range of recreational activities, including5:

  • Club memberships

  • Lunches and dinners out

  • Movies, plays, sports and day trips

  • Domestic and international holidays

  • Things like digital cameras, television and DVDs.

How can I make my money go further for the fun stuff?

  • Make use of your seniors card for transport concessions and other discounts

  • If going overseas isn’t in your budget, consider a stay-at-home vacation

  • Find two-for-one food and beverage deals via sites like TheHappiestHour

  • Pack a rug, food basket and esky, and head to the park for a picnic

  • Swap a visit to the day spa with a DIY manicure and candle-lit bubble bath

  • Have the troops over for a poker night and take turns hosting dinner parties

  • Find cheap accommodation on Airbnb or list your place to earn money while you’re away

  • Swap an interstate flight with a road trip. There are lots of routes across Australia.

For further information or assistance please contact us on |PHONE|

Source : AMP 4 September 2017 

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.

 


http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/2015-Intergenerational-Report
2, 3, 4, 5 http://www.superannuation.asn.au/resources/retirement-standard

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Ways to save money without spoiling your social life

Posted On:Sep 11th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

If you can make your money go the distance, pay day can be a wonderful thing. However, if it means that 48 hours from now you’re likely to be scrounging for shrapnel wondering how you’re going to pay bills and eat for the next fortnight – you might want to rethink how you’re managing your cash.

The financial hangover from the

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If you can make your money go the distance, pay day can be a wonderful thing. However, if it means that 48 hours from now you’re likely to be scrounging for shrapnel wondering how you’re going to pay bills and eat for the next fortnight – you might want to rethink how you’re managing your cash.

The financial hangover from the clothes, taxi fares, eating out and luxury items you bought over the weekend might hit hardest on Monday, but the long-term effects could be even more damaging.

Research from comparison site RateCity1 shows 42% of Australians under the age of 24 have between $10,000 and $30,000 of personal debt, with 63% of Generation Y credit card holders unaware of the interest rate they’re paying even when the average rate is close to 17%.

So you can put an end to instant noodles for dinner five days a week, here’s a list of inexpensive ways to have fun.

Save on food and drinks

  • Eat at home but make it an event. Invite friends over and take turns hosting dinner parties 

  • Go where the specials are. Find two-for-one and other deals via sites like TheHappiestHour

  • Pack an esky and take your date to the park. You’ll save on food and get an A for effort

  • Make your coffee, buy a reusable drink bottle and pack your own lunch 

  • Try the cheaper supermarkets or check out simple recipes. Jamie Oliver has a great range of cheap meal ideas.

Save on entertainment and exercise

  • Have the troops over for a trivia or poker night, karaoke or a movie marathon

  • Swap a visit to the day spa with a DIY manicure and candle-lit bubble bath

  • Look for movie deals. Many cinemas do cheap Tuesdays, and your service providers may offer member discounts. You may even have a social club at work that has tickets at reduced rates

  • Go to the beach, go fishing or check out local events and concerts 

  • Join a local sports team or head to the park for a friendly game 

  • Don’t pay for both the gym and yoga. Choose a provider that does it all. 

Save on travel and short breaks

  • Research available travel passes, reduce taxi rides and get a bus, train, cycle or car share

  • A holiday in your own hood could open you up to possibilities you didn’t know existed or you could give camping or caravanning a go. The roasted marshmallows will be worth it

  • Find cost-effective accommodation on Airbnb or if you’re heading out of town, list your place to earn money while you’re on holidays

  • Swap an interstate flight with a road trip. There are lots of routes across Australia 

  • Know the travel hacks, like travelling out of season or using price comparison websites.

Save on fashion and footwear

  • Plan and space out indulgent purchases. Shop during sales and don’t forget to use those gift cards that are close to expiring

  • Organise a clothes swap with friends or do it online. You can refresh your wardrobe while clearing out those things you don’t want anymore

  • Fix the items you own and expand with accessories—watches, bracelets, belts, and scarves.

Save on bills and basics

  • Leave your debit and credit cards at home and take out an appropriate amount of cash

  • Understand interest rates – it seems basic but most of us don’t do the maths. For example, 17% of $20,000 means you’ll fork out an additional $3,400 per year

  • Make it an annual exercise to shop around for the best providers when it comes to utilities, credit cards and health care. Groups like Canstar can do the comparison work for you

  • Check out bundling services. Using the same provider for phone and internet could save you.

It’s important to have a realistic plan when it comes to your money, so make sure your budget has a bit of room for movement.

For further information and assistance please contact us on |PHONE|

1 http://www.ratecity.com.au/media-room/generation-debt-y-australians-are-credit-crazy

Source: AMP 4 September 2017 

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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Going back to work after having a baby

Posted On:Sep 08th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Combining work commitments with family responsibilities can be something of a balancing act. We look at some of the expenses you might encounter as well as some of the financial benefits.

The cost of childcare

For most parents, the first thing that comes to mind when contemplating returning to work after having a child is finding suitable childcare.

Recently released statistics show that

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Combining work commitments with family responsibilities can be something of a balancing act. We look at some of the expenses you might encounter as well as some of the financial benefits.

The cost of childcare

For most parents, the first thing that comes to mind when contemplating returning to work after having a child is finding suitable childcare.

Recently released statistics show that in 2014 and 2015, 47% of couples and 51% of single parents with children under the age of 5 used paid childcare, and of those, 85% of couples and 67% of single parents were using childcare for work-related purposes.1

So unless you’re blessed with family who are willing and able to care for your little one for nothing, returning to work means you’re probably adding a new outgoing to your family budget.

 The government offers two types of assistance to help families with the cost of childcare:

  • Child Care Benefit, where the fees charged by approved childcare providers are subsidised by the government. The number of hours of subsidised care you’re eligible for is dependent upon certain conditions, while the rate of your subsidy is dependent on your household income.

  • Child Care Rebate, which provides a rebate of up to 50% of your out-of-pocket child care expenses, up to an annual limit of $7,613 per child for eligible parents.2

But even with government assistance taken into account, childcare can be a considerable cost, and one that has risen significantly over recent years.

Statistics show that after any childcare benefit was deducted, the median amount spent per week per child was $162 for couple families and $114 for single parents in 2014 and 2015, which was an increase of 75% and 104%, respectively, on the amount spent in 2002 and 2003.3

The long-term view

If the cost of childcare will take up a large portion of your salary, returning to work might not seem to make good financial sense. But it’s important to take a long-term view of your family finances, as well as considering the more immediate costs. After all, your children won’t be in childcare forever!

By returning to work, you’re continuing to build your super, as well as maintaining your industry knowledge, contacts, and skills, which will help protect your ability to both earn an income in the short term and build your future earning capacity. This will help protect your family’s long-term financial security.

How to deal with less income

Whether you’re dealing with less income due to the cost of childcare, or because you’ve changed your working arrangements, and are returning in a part-time role, or in a job share, this will also impact upon your family’s finances. Here are some tips to help you adjust to the change, as well as some ideas to help keep your finances on track.

  • Ensure you have a budget, which sets out how your money will be spent, and look for any areas you can reduce your spending. If you’re an AMP customer, our new Money Managertool makes tracking your spending easy, while the AMP Bett3r Account makes it simple to separate your money and allocate it for bills, saving, or spending.

  • Combat the reduction in your employer super contributions by boosting your super with any windfalls you may receive, such as your tax return. Your spouse can also make contributions into your super, which could benefit you both financially.

What to do with additional income

If you’re returning to work when your children are at school this could mean a boost in your household income, and you may be lucky enough to have money left over after all your expenses are met. If so, there are a number of things you could do to help you get ahead financially such as:

  • Making additional repayments on your home loan

  • Making additional contributions to your super

  • Repaying an outstanding uni debt, or any other debts

  • Saving for future expenses, such as your child’s education.

Other considerations

Being a parent, there are some other important financial matters you should think about.

Ensure you have adequate insurance cover to help protect your loved ones should anything happen to you, make a will if you haven’t already got one, or update it to reflect your change in circumstances.

For further information or assistance please contact us on |PHONE|

Source: AMP 5 September 2017

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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5 ways to make your gap year attractive to employers

Posted On:Aug 28th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Whether your gap year is made up of work, study, travel, volunteering, or all of the above, more than four in five people who’ve taken a gap year believe they’re more employable because of it.1

In fact, recruiters have also recognised that ‘constructive’ gap years can help people stand out from the crowd when it comes to prospective employers and universities, as

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Whether your gap year is made up of work, study, travel, volunteering, or all of the above, more than four in five people who’ve taken a gap year believe they’re more employable because of it.1

In fact, recruiters have also recognised that ‘constructive’ gap years can help people stand out from the crowd when it comes to prospective employers and universities, as it can demonstrate ambition, leadership, and a genuine desire to gain new skills and life experiences.2

If you’re looking to turn your gap year into something employers will value, we look at five things worth taking note of.

1. Know what you want out of your gap year

If your preference is to sunbake your way across Europe, that’s ok. Just keep in mind, what you do will have different outcomes when it comes to promoting yourself to your ideal employer.

With that in mind, spend some time thinking about the type of company or industry you want to work in, what experiences a gap year could bring to a role in that field, and what you’d really be prepared to do.

To get some insight, you might also speak to someone in that line of work to get ideas around what skills would look good on your resume and how you might go about it.

2. Understand your prospective employers

Here are the top five types of gap years as rated by a group of employers, keeping in mind these figures were quite different when looking at specific industries:3

  • Working in multiple temporary jobs in different cities around the world – 36%

  • Undertaking charity work overseas – 32%

  • Learning about different cultures in foreign countries – 18%

  • Going to the beach, island hopping and taking time out abroad – 10%

  • Visiting European cities with friends – 4%.

When it comes to the top continents to visit on a gap year, employers’ first preference was Europe, followed by North America, a mix of regions, Asia and then South America.4

3. Gain experience in the right places

Depending on the industry, different employers may value certain experiences. For instance, if you’re keen on working for an IT company that has a strong global presence, you might look at learning another language or getting professional experience in differentcountries overseas.

On the other hand, if you’re keen on hospitality you might look at bar work, or if you want a trade, a volunteer role where you build a school or orphanage.

If you’re not sure of the role you want, but are set on a particular field, another option is spending your gap year focused on different entry-level positions in the sector to help decide what you want to do.

4. Document what you’re doing

Depending on how long you’re away, it’s worth keeping a record of what you’re doing, so you can keep track of your activities and achievements, and any contacts you make along the way.

This will also help you to assess whether you have met your goals or if there are other opportunities you want to explore as part of your development while on your gap year.

5. Think how you’ll present relevant information

It’s important to be able to communicate your relevant skills and experiences to prospective employers and be able to convey these points clearly on your resume.

Focus on things like the skills you acquired, certificates you attained, whether you were responsible for other people, and examples that might show off your communication and problem-solving skills, or where you received positive feedback.

Final thoughts

Planning ahead can go a long way in terms of ticking off what you want to achieve on your gap year.

In the meantime, putting a budget and savings plan in place, and mapping out what you’d like to do and how long you’d like to go for will be a good place to start.

 

1, 2 https://studentedgecontent.blob.core.windows.net/images/articles/2017/03/NSRGapYear2017.pdf
3, 4 https://news.booking.com/dont-mind-the-gap-taking-a-gap-year-can-boost-employability
 

Source : AMP 28 August 2017

 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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Your 5-point action plan when faced with redundancy

Posted On:Aug 16th, 2017     Posted In:Provision Newsletter Articles    Posted By:Provision Wealth

Over a 12-month period, approximately two million Australians left their job and of those nearly one in five were made redundant1.

Given the stats, it’s easy to conclude that many people will be faced with redundancy at some point, which is why we’ve pulled together the financial and non-financial considerations to tackle early on.

After all, whether the idea of retrenchment has

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Over a 12-month period, approximately two million Australians left their job and of those nearly one in five were made redundant1.

Given the stats, it’s easy to conclude that many people will be faced with redundancy at some point, which is why we’ve pulled together the financial and non-financial considerations to tackle early on.

After all, whether the idea of retrenchment has you concerned or over the moon, there are things you’ll need to address before you secure your next role.

1. Know what you’re entitled to

A genuine redundancy payment is made when you’ve been retrenched because there is no longer a need for the job you’re doing.

If you’re under age 65, special tax treatment is also given to genuine redundancy payouts, which means any payments you receive will be tax free up to a certain limit based on your years of service.2

What your employer is required to pay you will depend on your conditions of employment, so check your redundancy payment summary carefully to ensure you get what you’re owed.

If you’ve lost your job and are still owed employee entitlements because your employer has gone into administration or liquidation, you may be able to get financial help from the Australian Government.3

2. Weigh up your financial situation

The size of your payout may determine the time you can afford to be out of work, what you’ll be able to live on from week to week and how you’ll tackle financial responsibilities until you find another job.

With that in mind you may want to:

Create a workable budget

You can do this by writing down your daily living expenses, and what you estimate any upcoming bills and loan repayments will total. This way you’ll be across all of your outgoings, as well as where you may be able to make minimum repayments and cut back on other forms of spending.

Put your money somewhere useful

It might be tempting to go on a holiday, undertake renovations or pay off existing debts with your redundancy packet, but if you don’t find work within a certain timeframe, you may leave yourself short.

Think about where you could put your money, still have access to it and potentially reap added benefits. Options may include high-interest savings accounts or a mortgage offset account that allows you to redraw funds while reducing what you pay in interest on your home loan.

Apply for financial hardship with your lenders

If your redundancy payout does start to run out and you’re struggling to make repayments, you may be able to seek assistance from your lenders by claiming financial hardship.

All providers must consider reasonable requests to change their terms in instances where you may be suffering genuine financial difficulties and feel help would enable you to meet your repayments, possibly over a longer period of time.

Know government assistance rules

You won’t be eligible for Centrelink benefits for the period of time you’ve been paid for as part of your redundancy. You may also have a ‘liquid assets waiting period’ based on any assets you have that could be used as income.4

Note, your eligibility for payments will also depend on your partner’s income.For more information and to request payment assistance, contact the Department of Human Services.

Look into your super situation

See how much money you have in super and think about the effect a break from work may have on your balance. If you have insurance inside super and are paying premiums with your super money, also consider how this may affect you if your retirement savings are not being offset by contributions.

3. Create a plan for your return to work

You might have a bit of leeway to take some time off, but when you do look to join the workforce again, a good place to start will be your resume. Make sure your previous roles and responsibilities are up to date and that you’ve listed all your skills and achievements.

In the meantime, set up relevant online job searches, tidy up your LinkedIn profile, touch base with recruiters in your field and don’t be afraid to target companies directly.

And, if you’re lucky enough to have found a role and still have money from your payout leftover, think about ways you may be able to invest it.

4. Contemplate the benefits of training

Depending on whether you want to remain in your industry or make a career change, further training could help you gain new qualifications, keeping in mind this can still cost time and money.

Check out the Career Development Association of Australia for information and if you’re receiving income support services you can also get help through government initiatives like Jobactive.

5. Seek further assistance

You may wish to speak to us for further assistance  . Please contact  us on |PHONE| to discuss.

1 http://www.abs.gov.au/ausstats/abs@.nsf/products/795FEBA87AB92A40CA257D0E001AC702?OpenDocument
2 https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Leaving-your-job/Redundancy-payments/
3, 4, 5 https://www.moneysmart.gov.au/life-events-and-you/life-events/redundancy

Source: AMP 8 August 2017

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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