Why go through the worry (and expense) of moving when you can turn your current place into your dream home? While renovations aren’t always stress-free (or cheap) there are some straightforward ways to finance your property’s facelift so it suits your post-pandemic lifestyle.

The type of renovation you want and the budget you’ll need will ultimately dictate the type of loan required so it pays to plan ahead. If you choose the wrong loan, you could be left with a skip load of unexpected debt.

Tradie comparison site hipages crunched the numbers in 2021 to reveal the average cost of renovating a home. Today, significant home extensions and renovations in Australia start at about $100,000 and can cost up to $300,000 for a traditional family home.

Hipages also drilled down to discover what the standard room by room breakdown would be. A kitchen typically costs between $10,000 and $45,000 to renovate – however, a Masterchef-worthy space could be as much as $70,000. A bathroom redo could clean you out between $10,000 to $35,000, living rooms tend to be cheaper at between $10,000 and $15,000 while a deck or backyard blitz could be about $2,000 to $10,000.

So, once you have the ballpark budget, then you can decide just how you might finance your home improvement.

Refinance your home

Renovation time just might be the perfect opportunity to review your home loan and see if it still works for you. Refinancing to renovate is basically you, as the homeowner, obtaining extra cash to fund your renovations and you don’t have to stay with the same lender. Changing lenders could provide a better rate and additional product features, but you’ll have to pay for the costs of refinancing. Negotiating with your current lender and extending your loan with them may allow you to avoid such costs. Ultimately, if you renovate wisely then you will be increasing the value of your home and the long term benefits should outweigh any upfront loan costs.  

Redraw from your mortgage

If you’ve been making additional payments on your home loan over time then redrawing some of the extra money could help fund your renovation. You’ll only be able to use the additional amount you’ve added so you’ll need to ensure it will be enough before redrawing. Just check whether your home loan has a redraw facility and verify whether your lender charges for such transactions.

Top up your mortgage

When you top up your home loan, you’re basically increasing your mortgage amount so you can borrow extra money against your home. If you have plenty of equity in your home and the ability to make extra repayments, then your lender may increase your existing home loan limit so you can pay for your home renovations. Remember, however, that topping up your home loan means taking on more debt.  

Take out a construction loan

This option will allow you to access larger amounts of money for significant structural work, with the understanding that your property will be worth more once renovations are complete. In order to apply for a construction loan, however, you’ll need council approval and a fixed price building contract from a registered builder. The upside to a construction loan is that the interest is calculated on the outstanding amount, not the maximum amount borrowed. As a result, you have more money in your renovation kitty, but you’ll only pay interest on the money you choose to spend. It is also worth noting that construction loans usually come with slightly higher interest rates than a typical home loan. 

Home equity loan (aka a line of credit loan) 

Put simply, equity is the dollar value amount of your home that you own. Lenders will let you use that equity to fund a renovation through a home equity loan. Homeowners can generally call on up to 80 per cent of their loan-to-value ratio (LVR). To calculate just how much you might be able to dip into, subtract your current loan balance from your property’s value and then multiply by that by 80 per cent. This kind of loan will often charge a lending establishment fee and possibly a monthly loan account fee, so do your homework before choosing a loan to suit you.  

Getting ready before renovating

• Have a valuer review how much equity you have in your property so you can then budget your renovations

• Research the values of properties in your neighbourhood. There’s no point undertaking a pricey renovation of your humble home if it means you’ve overcapitalised and might not be able to recoup costs when it comes time to sell. 

• Be aware that borrowing more than 80 per cent of your home’s value will require you to pay Lender’s Mortgage Insurance. 

• Plan your renovations thoroughly before going to a lender because changing your mind halfway through a project could lead to budget blowouts. 

When weighing up your finance options, consider all the pros and cons associated with each option and get in touch with us on Phone: 07 5641 4134 to discuss what would work best for you.

5 tips that could help you save on a renovation

1. Organise a working bee: get your friends and family together to help with painting, installing shelving and sprucing up the garden and thank them with dinner and drinks.

2. Choose the right time of the year: Just like travel, renovations and odd jobs can be more cost effective in low season. For example, your air conditioning could be installed during winter.

3. Check out newly built / renovated homes: While high end architects generally come with a price tag to match, you can go to inspections for inspiration and concepts to recreate in your own home.

4. Reuse materials: Cabinetry and doors can be given a cost-effective facelift with a paint, new handles or new cabinet doors while keeping the existing cabinet body in place.

5. Update with new furniture: Sometimes an update of your current furniture can give you that brand new feeling you’re looking for. Keep an eye out for used display home furniture that is both on trend and sold at heavily discounted prices.

Lower tax on your investments can help you reach your financial goals sooner. But don’t choose an investment based on tax benefits alone.

How investment income is taxed

You need to include investment income in your tax return. This includes what you earn in:

• interest

• dividends

• rent

• managed funds distributions

• capital gains from property, shares and cryptocurrencies

You pay tax on investment income at your marginal tax rate. 

Use MoneySmart’s income tax calculator to find out your marginal tax rate.

You’re allowed tax deductions for the cost of buying, managing and selling an investment. But there are rules around what you can and can’t claim as a tax deduction. See the Australian Taxation Office (ATO)’s investment income deductions.

Investing and tax can be complex. Speak to us for help.

Making capital gains or losses

Capital gains

If you sell an investment for more than the cost to acquire it, you make a capital gain. You need to include all capital gains in your tax return in the year you sell the investment. Capital gains are taxed at your marginal rate.

If you’ve held the investment for more than 12 months, you’re only taxed on half of the capital gain. This is known as the capital gains tax (CGT) discount.

The ATO has information to help you work out your capital gains tax on different investments.

Capital losses

If you sell an investment for less than the cost to acquire it, you make a capital loss.

You can use a capital loss to:

• reduce capital gains made in the year the loss occurs, or

• carry forward the loss to offset future capital gains

Positive versus negative gearing

Positive gearing

Positive gearing is where you borrow money to invest and the income from the investment (for example, rent or dividends) is more than the cost of the investment (interest and other expenses).

If you’re positively geared, you’ll have extra money coming in. But you’ll also have to pay tax on this income at tax time.

Negative gearing

Negative gearing is where you borrow to invest and the investment income is less than the cost of the investment.

Investors negatively gear as they can generally claim a tax deduction for the investment loss. The aim is for the capital growth to offset the loss in earlier years.

If you’re making an investment loss, it is still costing you money. You’ll need to have cash from other sources, like your salary, to cover interest and expenses.

Tax-effective investments

A tax-effective investment is one where the tax on your investment income is less than your marginal tax rate.

Choose investments based on your financial goals, risks you’re comfortable with and expected returns. Tax benefits should be a secondary consideration.

Superannuation

Super is a tax-effective investment and one of the best ways to save for retirement. This is because the government provides tax incentives to save through super. These include:

• A tax rate of 15% on employer super contributions and salary sacrifice contributions, if they’re below the $27,500 cap.

• A maximum tax rate of 15% on investment earnings in super and 10% for capital gains.

• No tax on withdrawals from super for most people over age 60.

• Tax-free investment earnings when you start a super pension.

See Tax and super for more information.

Insurance bonds

Insurance bonds are investments offered by insurance companies. They can be tax-effective if you’re planning to invest for 10 years and follow certain rules.

All earnings in an investment bond are taxed at the corporate tax rate of 30%. If no withdrawals are made in the first 10 years, no further tax is payable. They can be tax-effective for investors with a marginal tax rate higher than 30%.

Important: Beware tax-driven investments

Tax-driven schemes offer tax deductions now for investing in assets that may provide income in the future. These schemes can be high risk and some are scams. Get professional advice from an accountant or financial planner.

Investing and your tax return

Keeping good records will help you at tax time to:

• Report investment income.

• Claim all tax deductions you’re entitled to.

It will also help you calculate any capital gains or losses when you sell an investment.

For all investments such as shares, property and cryptocurrencies you need to keep records to show:

• How much you paid for it — contracts for purchase of the asset and receipts.

• How much you sold it for — contracts for the sale of an asset and receipts.

• Income you get from the investment — keep all records of income payments such as distribution statements, rental payment receipts and dividend statements.

• Expenses paid while owning the investment — receipts for payments made to manage, maintain or improve the investment.

You’ll need to keep records for five years after you included the income and capital gain or loss in your tax return.

Contact us on Phone: 07 5641 4134 if you have any questions about investing or speak to your accountant if you have any tax queries.

Source: moneysmart.gov.au
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-to-invest/investing-and-tax

Important note: 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.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.
 

Being close to paying off your home loan is an enviable position. If you’re wondering what to do next, we discuss some benefits of investing further versus being mortgage free.

Your mortgage, your super or your investments

It’s tempting to pay off your mortgage as quickly as possible. But what about investing?

Building your wealth by paying off your mortgage, doesn’t mean you shouldn’t also consider other investment opportunities. With Australia’s residential mortgage interest rates at historic lows you can pay off your mortgage sooner. But it’s worth considering whether you should use your savings to invest in other assets, such as an investment property or shares.

It’s all about looking at a bigger picture of your wealth building strategy and the many options you can take to accumulate wealth.

Benefits of investing in your home loan – the power of pay down

Reducing your interest is always good. Paying off a $160,000 loan with a 4% interest rate in 30 years means interest is approximately $115,000. Paying it off in 15 years brings interest down to around $53,000 – a saving of just over $61,000. These savings could be invested and used to make more money for your retirement – or simply enjoyed.

Up your equity

Investing into your mortgage will increase your equity. You can use this credit to renovate your property and increase its sale value.

Liberate your lifestyle

There are other significant benefits to investing in your mortgage. The peace of mind of being debt free is high on the list. Three-quarters (76%) of the 2040 people surveyed¹ said that their mortgage has a big impact on their lifestyle. Removing one of life’s biggest financial burdens can have a huge effect on you and your family.

With your income freed up, you can also save, splurge or invest.

Key watch out

Don’t forget, that depending on what type of mortgage you have, there could be limits to how much you can repay in a given period.

The benefits of investing outside your home loan

There are many benefits of investing outside your home loan that are worth considering as part of your complete wealth building strategy.

Build your super

Investing into your super is certainly an option homeowners should consider; given 60% of Australians expect they will not have enough for retirement, according to MLC research.²

One great benefit of investing into your superannuation is that concessional (before tax) contributions are taxed at a maximum rate of 15%. Or at 30% to the extent your concessional contributions together with your income is over $250,000.

Investing into your mortgage, however, is drawn from after tax income which was subject to tax at your marginal tax rate. Your marginal tax rate could be as high as 47%.

You can contribute up to $27,500 per annum before tax as a concessional contribution. You can also contribute up to $110,000 per annum after tax as a non-concessional contribution into your superannuation fund. The annual contribution caps available for you to make personal contributions may be limited by employer contributions, salary sacrifice contributions and your total super balance. If you exceed the contribution caps additional taxes and penalties will apply.

Key watch out

The key issue with investing in super is that generally you can’t access the funds until you’ve reached preservation age and retired, or you’ve turned 65.

Preservation age is 55 for those born before 1 July 1960 and gradually increases to 60, depending on your date of birth.

Spreading your risk across multiple assets

To spread your risk and potentially increase your opportunity, often financial advisers will recommend diversification. Which means spreading your investments across other asset classes.

Investing in shares or fixed income securities is one of many ways to diversify your holdings. Not only can this help you potentially build your wealth, it could offer some protection if the residential property market reduces in value.

Access share funds managed by experts

Knowing what to invest in is a challenge as past performance isn’t a guarantee of future performance. So another option is to let fund managers do some of the hard work for you. Fund managers have research teams who interview companies to understand their strategies and decide whether they’ll invest a managed fund’s money with them. Their teams regularly review these investments with the aim of gaining the highest return for investors like you.

Claim tax benefits where you can

There are many tax benefits you can claim on an investment property, including interest on the investment property loan and depreciation on fittings and fixtures. Unfortunately you can’t claim investing tax benefits on the mortgage on your home, as it’s viewed as your main place of residence.

You can also make the most of negative gearing if you’re losing money on the property, offsetting your losses against your income. 

Factors to consider when investing outside your home loan

Your return rate should be higher than your home loan rate

You should also think about other costs and income (rent or dividends) of any investment, including the tax benefits or costs. For example earnings from investment property, shares and managed funds are subject to income tax. You may also have to pay capital gains tax if you sell them for more than you bought them for.

Think about how easily you can sell your investments

As property is an illiquid asset, this means it takes longer to access your money if you need cash for some reason quite quickly. Without a crystal ball it’s difficult to predict what you’ll need, but the basic principle of investing is to make sure you have a rainy day fund and room to move in your cash flow if interest rates rise or other expenses arrive.

Know your time horizon

Decide whether you’re looking for a long, medium or short-term investment. While share dividends can offer an additional income stream, their prices can fluctuate from month to month, as can share prices. So if you want to sell, it will work in your favour if you don’t have to do it in a hurry and can ride out a downward market turn.

Above all, talk about your options with a qualified financial adviser

Sometimes paying off your mortgage faster is a great way to save on interest and accumulate wealth. But it’s always a good idea to look at your complete wealth building strategy and make sure you’re not missing opportunities to build wealth elsewhere.

Have confidence in your future with help from us, call us today on Phone: 07 5641 4134.

1 MLC-IPSOS, Australia Today report, 2016

2 MLC, Quarterly Australian Wealth Sentiment Survey, Q1 2017

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/home-property/pay-off-home-loan/should-i-pay-off

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2022 National Australia Bank Limited (“NAB”). All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

It’s a phenomenon widely being described as “the Great Resignation”.

With many countries now having removed the tight operating restrictions they imposed on businesses during the COVID-19 pandemic, there’s been a quick ramp-up in economic activity.

That ramp-up has spurred a surge in job vacancies around the world, and enticed record numbers of people to resign from their existing job to take up a new one, often with a better salary package.

Australia has lagged the global trend to date. But many employment experts expect the Great Resignation to accelerate here now that all states and territories are effectively fully open for business once again.

Considerations if changing roles

Probably one of the biggest considerations for anyone changing jobs, or contemplating a change, is financial security.

That’s because changing jobs can potentially place you in a financially vulnerable position.

Budget for any income gaps between when you leave your job and start the new one. 

Also, when you switch jobs, consider that in most cases you’ll be on a probationary period with your new employer.

That period can last anywhere from three to six months, depending on the terms of your employment contract.

And, during this time, your new employer will generally have the right to terminate your contract at short notice.

So it’s important to prepare for that possibility and have a financial gameplan in place.

Here’s a few steps you can take: 

• A good starting point is to take a financial stocktake so you have a clear picture of your net cash flow after ongoing living expenses, including regular commitments such as mortgage or rent payments.

• If you have some savings set aside, it’s good to retain them for the time being in the unlikely event that your new job doesn’t work out and you find yourself unemployed.

• Along the same lines, if you receive any form of payout when you leave your job, including accrued annual leave, it makes sense to put that money to one side until your new role is secure.

 Another consideration is that, if you’re planning to borrow money in the near future, most lenders will want to see you have a stable employment history.

If you apply for a loan soon after you’ve switched roles, especially while you’re still completing a probationary period, they’ll most likely determine you’re a higher risk than someone who’s been in their role for longer. 

Lenders will generally want to see that you’ve been in your role for at least 12 months to ensure you’re able to service the loan, although they’ll take other factors into account such as your total assets and liabilities, your salary package, and your longer-term employment history. 

Maintain continuity and plan

Another key step when changing jobs is to ensure any investment strategies you have in place are not inadvertently disrupted by your move.

For example, if you’re already salary sacrificing some of your pay into superannuation, make sure you set that up with your new employer so your personal contributions continue.

There could also be new investment opportunities from changing jobs.

Review your long-term financial goals and the strategies you have for achieving them.

If you’re receiving more income in your new role, you may want to consider starting up an automated regular investment plan.

That will enable you to put money into different investments at set intervals, which can be used for specific savings goals such as saving for a house, your children’s education, or for other purposes.

If you need help with your investment strategy, speak to us on Phone: 07 5641 4134.

Source: Vanguard March 2022

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

Australia’s superannuation system is based on individual accounts, with men and women treated equally. But that’s where equality ends. It’s a simple fact that women generally retire with much less super than men.

The latest figures show women aged 60-64 have an average super balance of $289,179, almost 25 per cent less than men the same age (average balance $359,870).ⁱ

The reasons for this are well-known. Women earn less than men on average and are more likely to take time out of the workforce to raise children or care for sick or elderly family members. When they return to the workforce, it’s often part-time at least until the children are older.

So, it makes sense for couples to join forces to bridge the super gap as they build their retirement savings. Fortunately, Australia’s super system provides incentives to do just that, including tax and estate planning benefits.

Restoring the balance

There are several ways you can top up your partner’s super account to build a bigger retirement nest egg you can share and enjoy together. Where superannuation law is concerned, partner or spouse includes de facto and same-sex couples.

One of the simplest ways to spread the super love is to make a non-concessional (after-tax) contribution into your partner’s super account. Other strategies include contribution splitting and a re-contribution strategy.

Spouse contribution

If your partner earns less than $40,000 you may be able to contribute up to $3,000 directly into their super each year and potentially receive a tax offset of up to $540.

The receiving partner must be under age 75, have a total super balance of less than $1.7 million on June 30 in the year before the contribution was made, and not have exceeded their annual non-concessional contributions cap of $110,000.

Also, be aware that you can’t receive a tax offset for super contributions you make into your own super account and then split with your spouse.ⁱⁱ

Contributions splitting

This allows one member of a couple to transfer up to 85 per cent of their concessional (before tax) super contributions into their partner’s account.

Any contributions you split with your partner will still count towards your annual concessional contributions cap of $27,500. However, in some years you may be able to contribute more if your super balance is less than $500,000 and you have unused contributions caps from previous years under the ‘carry-forward’ rule.

If your partner is younger than you, splitting your contributions with them may help you qualify for a higher Age Pension. This is because their super won’t be assessed for social security purposes if they haven’t reached Age Pension age, currently 66 and six months.ⁱⁱⁱ

Re-contribution strategy

Another handy way to equalise super for older couples is for the partner with the higher balance to withdraw funds from their super and re-contribute it to their partner’s super account.

This strategy is generally used for couples who are both over age 60. That’s because you can only withdraw super once you reach your preservation age (currently age 57) or meet another condition of release such as turning 60 and retiring.

Any super transferred this way will count towards the receiving partner’s annual non-concessional contributions cap of $110,000. If they are under 67, they may be able to receive up to $330,000 using the ‘bring-forward’ rule.

As well as boosting your partner’s super, a re-contribution strategy can potentially reduce the tax on death benefits paid to non-dependents when they die. And if they are younger than you, it may also help you qualify for a higher Age Pension. These are complex arrangements so please get in touch before you act.

A joint effort

Sharing super can also help wealthier couples increase the amount they have in the tax-free retirement phase of super.

That’s because there’s a $1.7 million cap on how much an individual can transfer from accumulation phase into a tax-free super pension account. Any excess must be left in an accumulation account or removed from super, where it will be taxed. But here’s the good news – couples can potentially transfer up to $3.4 million into retirement phase, or $1.7 million each.^iv

By working as a team and closing the super gap, couples can potentially enjoy a better standard of living in retirement.

If you would like to check your eligibility or find out which strategies may suit your personal circumstance, contact us on Phone: 07 5641 4134.

i https://www.superannuation.asn.au/ArticleDocuments/402/2202_Super_stats.pdf.aspx?Embed=Y

ii https://www.ato.gov.au/individuals/income-and-deductions/offsets-and-rebates/super-related-tax-offsets/#Taxoffsetforsupercontributionsonbehalfof

iii https://www.ato.gov.au/Forms/Contributions-splitting/

iv https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/transfer-balance-cap/

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 the author detailed above is separate and external to our business. Our business does not take any responsibility for any action or any service provided by the author. 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.

What is Home Care?

Home Care (also known as in-home care, community care, home help, home support and in-home nursing care) is the umbrella term for a range of services that allow people to remain living independently in their own homes. Many elderly Australian’s take advantage of these services as an alternative to moving into traditional residential aged care homes.

Home care services mean that you or your loved one can stay connected with family and friends and stay involved in the local community.

Home Care services can assist with a wide range of tasks. The most common include dressing, bathing, meal preparation, cleaning & laundry, gardening & basic home maintenance, transport, nursing and allied health & therapy services.

If something you need assistance with is not listed, you don’t need to worry. Just talk to your preferred home care provider and they’ll more than likely work with you to find a suitable solution.

Most Australian’s access home care services through a Home Care Package.

What is a Home Care Package?

A Home Care Package is a coordinated and flexible package that allows individuals to remain living in the comfort of their own homes. Each Home Care Package is tailored in order to cater for a variety of care needs. 

There are currently four levels of Home Care Packages:

• Level 1: basic level care needs

• Level 2: low level care needs

• Level 3: intermediate level care needs

• Level 4: high level care needs

Home Care Packages receive funding from the federal Government, however if you are able to do so, you may be asked to make a contribution towards your Home Care Package costs.

Do I have to pay for a Home Care Package?

You may be eligible to receive funding from the Federal Government to help pay for a Home Care Package, however you may need to make a contribution. This will be determined by a Centrelink assessment.

Home Care Packages are now delivered on a Consumer Directed Care (CDC) basis, which means that you have more choice regarding how your allocated home care funds are spent. You will also be able to choose your own Home Care provider.

Click here to find out more about Consumer Directed Care.

If you are not eligible to receive a Home Care Package, you can still access the full range of home care services independently and at your own expense.

What services can I access with a Home Care Package?

Some common services that can be accessed with a Home Care Package include, but are not limited to:

• Personal Care: showering, dressing, shopping & mobility

• Domestic Assistance: cleaning, laundry, washing & vacuuming

• Assistance with meal preparation & eating

• Medication management

• Nursing care

• Transportation

• Allied health services

What services are excluded from a Home Care Package?

Products and services that are excluded from the Home Care Packages program include but are not limited to:

• Food items

• Payment for permanent accommodation (including assistance with mortgage payments & rent)

• Travel and accommodation for holidays

• Home modifications that are not related to the consumer’s care needs

• Club memberships

• Tickets to sporting/music events

• Gambling

Do you need a home care provider?

The CareSide can help you with the best value home care in Australia delivering more hours of quality care for both fully managed and self-managed home care packages.

The CareSide team is ready to help – call today for a friendly chat!

Call 1300 414 219

How much is a Level 4 Home Care Package?

Where can I access Home Care Packages?

Home Care Packages are available Australia-wide. To begin your search for home care providers in your area, simply click on your state below:

• Home care in the Australian Capital Territory

• Home care in New South Wales

• Home Care in the Northern Territory

• Home care in Queensland

• Home Care in South Australia

• Home Care in Tasmania

• Home Care in Victoria

• Home Care in Western Australia

How can I access a Home Care Package?

There are five simple steps you can follow to determine your eligibility and access a Home Care Package:

1. Check your eligibility by undergoing an assessment by an Aged Care Assessment Team. Call My Aged Care on 1800 200 422 to register & organise an Aged Care Assessment.

2. Find a suitable Home Care Package provider

3. Work out the costs

4. Accept a Home Care Package

5. Begin your home care services

Click here to find out more about the steps involved in accessing a Home Care Package.

How do I find out if I am eligible to receive a Home Care Package?

To find out if you are eligible, you will need what is called an aged care assessment. They’ll discuss your current situation and determine if a Home Care Package would be suitable and at what level. The assessments are free.

Call My Aged Care on 1800 200 422 to register & organise an Aged Care Assessment.

If you find that you are not eligible to receive a Home Care Package or you need more than the level you’ve been allocated, you can pay for additional home care services yourself. All you need to do is contact a home care services provider in your area and they’ll assist you in putting together a suitable home care program.

If you are considering moving into an Aged Care facility, you should put an estate plan in place. Call us to discuss further on Phone: 07 5641 4134.

Source: This article was originally published on https://agedcareonline.com.au/aged-care-online/understanding-aged-care/your-guide-to-home-care.
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 the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

If you’re already retired or on your way to retiring, have you been obsessively checking your portfolio balance and dreading the next piece of news that might cause it to dip further? Or have you been keeping up with the news as you usually do, but confident that your portfolio will largely weather the volatility it is currently experiencing?

If you nodded at the former, it’s a good indicator that you may need to revisit your asset allocation; it’s likely that it is no longer aligned to your risk appetite and thus unlikely to achieve the goals you’ve set out in the time horizon you have.

If you said yes to the latter, good on you – you’ve likely set yourself up well. But whether or not you’re feeling comfortable with how your portfolio is doing, it is important to regularly think about the risks that you face as a retiree (or a soon-to-be-retiree), and put in place strategies to mitigate them.

Market risk

Without a regular pay check to counterbalance capital losses, retirees inevitably feel it more when market volatility is in play. But while you cannot control the market and what it returns, you can control your discretionary spending. Temporarily reducing your spending could help alleviate financial stress through this momentary dip. And spending plans can resume once markets are back in the black.

Inflation risk

Inflation continues to be a hot topic but the risk it brings is nothing new. Planning for inflation should be part of your investment strategy. Also don’t get caught out during your retirement planning process – using ‘real returns’ rather than ‘nominal returns’ is important when punching in the numbers.

Longevity risk

Australians are living longer than we ever have. According to the Australian Bureau of Statistics, the average person can now expect to live past 81 if you’re male, or 85 if you’re female. You should plan for your retirement savings to last you at least 16 years and possibly up to 30 years, assuming you retire at 67. And if you’re retiring before 67, plan accordingly. Don’t forget to factor in expenses to account for health issues as you age.

History has shown that investors who remain invested in the financial markets despite troubling headlines are rewarded when the market eventually picks up. As such, maintaining discipline and focusing on the long-term will help you navigate the years ahead.

If you’d like to discuss your retirement goals, call us on Phone: 07 5641 4134.

Source: Vanguard February 2022

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

Many of us have seen our home’s value grow significantly over the last few years. This could mean that your equity is now large enough to put to a new use. So, whether you’re looking to renovate, invest in property or splurge on the holiday of a lifetime, the equity you have in your home can open up exciting possibilities.

Let’s look at ways to release it and some important things you need to keep in mind.

Calculating your usable home equity

Home equity is the difference between your property’s current market value and the amount you still owe. To keep a financial buffer in place that helps protect your home, most lenders will only let you access 80% of your equity. Say your home is currently valued at $800,000 with $200,000 still owing on the mortgage. Your equity is $600,000 but lenders will generally only allow you to access up to $440,000.

As with any loan, when deciding how much equity to release, lenders will look at your income, expenses and all your debts as well as the value of your home. If you’re using your equity for an investment property, then the amount of rent and overheads for that property are also taken into consideration.

Depending on your loan and lender, your equity could be released as a drawdown or redraw facility, a line of credit loan or via an offset account on your existing mortgage. And if your lender won’t approve an equity loan, a mortgage with a second lender may be a possibility. All these options come with different interest rates and conditions, so it’s a good idea to take the time to assess which suit your plans and circumstances, including if restructuring your mortgage is necessary.

Choosing what to do with your equity

Once you know how much equity you can access, it’s time to choose what to do with it. You can build up your asset through renovations or look to invest the money in either shares or an investment property. Reviewing and accessing your equity could also provide you with opportunities to explore, for example consolidating your debts or buying a new car, realising a passion project like that extended road trip or offering a source of income during a career break.

Whatever you decide to do with your equity, you’ll need to show the bank you can afford the repayments on the full loan amount, which in the case of an investment property, will include both the original and new mortgages.

Funding an investment property

When buying an investment property, lenders often allow up to four times the amount of your usable equity. So, if we look to our previous example, the usable equity of $440,000 means you could, in theory, spend up to approximately $1,700,000 on a property, inclusive of stamp duty, legal fees and other costs.

However, this is subject to you demonstrating you can afford the repayments on both mortgages. Lender calculators can give you a rough idea of what your investment repayments would be.

Weighing up the risks

While releasing equity in your home frees up capital, it does mean you are increasing the size of your loan and can carry risks, particularly when reinvesting. It’s also important to note that your equity does also depend on the value of your property and property values do fluctuate and can decline significantly. One of the main dangers is extending your financial position to a point where you can no longer service the monthly repayments. This would put any new investment, and even your home, at risk of repossession by the lender.

The current talk of interest rate rises makes it especially important to assess the amount of equity release you can realistically afford going forward. And please remember that all loan application decisions are recorded on your credit file and influence your credit rating. It’s another reason to discuss your options and work out exactly what you are likely to be approved for before applying for any equity release.

To find out how much equity you can realistically release and discuss your plans, please get in touch on Phone: 07 5641 4134. We can work out a strategy to help you achieve your goals.  

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 the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

It seems like June 30 rolls around quicker every year, so why wait until the last minute to get your personal finances in order?

With all the uncertainty and special support measures of the past two years, it’s possible your finances have changed for better, or for worse. So it’s a good idea to ensure you’re on track for the upcoming end-of-financial-year (EOFY).

Starting early is essential if you want to make the most of the opportunities on offer when it comes to your super and tax affairs.

New limits for super contributions

A key task for EOFY is maximising your super contributions to boost your retirement savings and take advantage of the available tax benefits. Annual contribution limits for super rose this financial year, so this strategy is even more attractive.

From 1 July 2021, most people’s annual concessional contributions cap increased to $27,500 (up from $25,000). This allows you to contribute a bit extra into your super on a before-tax basis, potentially reducing your taxable income.

If you have any unused concessional contribution amounts from previous financial years and your super balance is less than $500,000, you may be able to “carry forward” these amounts to further top up.

Another strategy is to make a personal contribution for which you claim a tax deduction. These contributions count towards your $27,500 cap and were previously available only to the self-employed. To qualify, you must notify your super fund in writing of your intention to claim and receive acknowledgement.

Non-concessional super strategies

If you have some spare cash, it may also be worth taking advantage of the higher non-concessional (after-tax) contributions cap. From 1 July 2021, the general non concessional cap increased to $110,000 annually (up from $100,000).

These contributions can be a great help if you’ve reached your concessional contributions cap, received an inheritance, or have additional personal savings you would like to put into super. If you are aged 67 or older, however, you need to meet the requirements of the work test or work test exemption.

For those under age 67 (previously age 65) at any time during 2021-22, you may be able to use a bring-forward arrangement to make a contribution of up to $330,000 (three years x $110,000).

To take advantage of the bring-forward rule, your total super balance (TSB) must be under the relevant limit on 30 June of the previous year. Depending on your TSB, your personal contribution limit may be less than $330,000, so it’s a good idea to talk to us before making your contribution.

More super things to think about

If you plan to make tax-effective super contributions through a salary sacrifice arrangement, now is a good time to discuss this with your employer, as the ATO requires an effective arrangement to be documented prior to commencement.

Another option if you’re aged 65 and over and plan to sell your home is a downsizer contribution. You can contribute up to $300,000 ($600,000 for a couple) from the proceeds without meeting the work test.

And don’t forget making a contribution into your low-income spouse’s super account could score you a tax offset of up to $540. To take advantage of these super tax concessions, ensure your contributions meet all the eligibility rules and are received by your super fund well before June 30.

Get your SMSF shipshape

If you have your own self-managed super fund (SMSF), it’s important to check it’s in good shape for EOFY and your annual audit.

Administrative tasks such as updating the fund’s minutes, lodging any transfer balance account reports (TBARs), checking the COVID relief measures (residency, rental, loan repayment and in-house assets), and undertaking the annual market valuation of fund assets should all be started now.

It’s also sensible to review your fund’s investment strategy and check whether the fund’s assets remain appropriate.

Know your tax deductions

It’s also worth thinking beyond super, to see what else you can do to reduce tax.

If you’ve been working from home due to COVID-19, you can use the shortcut method to claim 80 cents per hour worked for your running expenses. But make sure you have detailed records of hours worked to substantiate your claim.

You also need to prepare supporting documents to claim work-related expenses such as car, travel, clothing and self-education.

Check whether you qualify for other common expense deductions such as tools, equipment, union fees, the cost of managing your tax affairs, charity donations and income protection premiums.

Review your investment portfolio

After a year of strong investment market performance, now is also a good time to do a thorough analysis of your finances outside super.

Review your investment strategy, benchmark your portfolio’s performance and check whether any assets need to be sold or purchased to rebalance the portfolio back into line with your strategy.

You might also consider realising any investment losses, as these can be offset against capital gains you made during the year.

There’s a lot to think about, so if you would like to discuss EOFY strategies and super contributions, call our office on Phone: 07 5641 4134.

2021-22 EOFY tips for business owners

• Ensure any Super Guarantee and employee salary sacrifice contributions you plan to claim a tax deduction for in 2021-22 are made prior to June 30

• Consider whether to take advantage of the temporary full expensing regime that allows an immediate 100% write-off of eligible assets purchased and installed in the period 6 October 2020 to 30 June 2022

• Ensure your quarterly BAS, GST returns and Single Touch Payroll reports are all up-to-date

• Check whether your enterprise meets the eligibility rules for small business capital gains tax (CGT) concessions if you are contemplating winding up or selling your business soon

• Consider bringing forward any expenses due early in the new financial year to reduce your taxable income. Small expense amounts under $1,000 can be claimed without triggering the prepayment rules

• Write off any bad debts so you can claim a tax deduction

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 the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.

For the first-time business owner, your ability to control costs is a critical success factor. But have you factored in these often-overlooked costs of running a business?

What could be more cost-effective than starting your own small business?
Running your business from home means no commute and money saved. No managers or investors to keep most of the profit for themselves and no (additional) rental overheads.

For many, it sounds like the perfect antidote to a busy, expensive lifestyle. But is it?

The truth is, running a business carries various costs that are easy to overlook – even if you’re operating it out of your parents’ garage. And if you don’t plan and prepare, your dream business could become a financial nightmare.

To help you get prepared for running your own business, here are 10 business costs that every business owner should consider.

1. Your own time

The irony is many entrepreneurs begin working for themselves to better value their time, but many completely fail to do so.

Instead, they fall into the habit of trying to do everything themselves, assuming their effort is innately productive – but that isn’t the case.

Part of the reason for this is that it’s possible to value your time in an abstract sense (recognising that you have useful skills) without monetarily valuing it.

As a business owner, understand what every hour of your time is worth and use that as a yardstick to figure out what you should (and shouldn’t) be spending your time doing.

2. Staff (permanent or freelance)

The dream of flying solo isn’t sustainable if you have any ambition to scale your offering.

No matter how skilled or dedicated, there’s only so much a person can accomplish in a day. Sooner or later you need to start building a team.

And however inevitable it may be, it’s all too easy to treat it as something that might happen one day but isn’t an immediate priority.

But if you know you’ll need employees worth investing in some day, you need the funds to offer competitive salaries – and that requires preparation and saving. 

3. Employee benefits

The employment landscape is competitive. Attracting quality people to your team – and then keeping them – often means being able to offer benefits in addition to a competitive salary.

Think hard about what benefits or perks you could offer your staff – and don’t be afraid to get creative.

Perks don’t have to cost a lot. Benefits like fixing workdays to school hours, an extra day off for your birthday and free swag go a long way to piquing the interest of would-be team members.

4. Business software subscriptions

Without the advent of software-as-a-service (SaaS), or cloud-based software, it wouldn’t be possible for a lone entrepreneur to build a scalable online business.

From your word processor to your website, if it’s digital then it can be delivered over the internet for a relatively low monthly rate.

One example of a business-critical solution is online accounting software. Adopting this early on makes it easier to get paid faster with automated invoices, capture your receipts and prepare cash-flow forecasts.

Many new business starters figure they can do all this manually, but your time is valuable, and much better spent on other things. And the introduction of Single Touch Payroll in Australia and Payday Filing in New Zealand means that, if you intend to employ staff, you will need to acquire this kind of software to report salaries and super with each pay run.

There can be also be hidden costs in choosing between SaaS utilities. What you think is the best deal might work out as more expensive in the long run.

I follow e-commerce closely and both Shopify and BigCommerce are great website hosting solutions, with the latter being nominally cheaper. But Shopify’s native multichannel selling, automation options and higher growth rate may justify the higher price and ultimately make it cheaper as your business scales.

Ultimately, the right software solution for your business will come down to your individual circumstances, so consider your options carefully.

5. Industry memberships

These costs can really take people by surprise, because many people don’t know they exist.

Industry memberships are sometimes mandatory, but more often simply recommended, and involve businesses joining governing bodies (of sorts) that oversee their industries – whether regionally or internationally. The ACCC lists a number of these industry associations on its website, while New Zealand also have an array of industry and trade associations.

For instance, if you ran a decorating business, you may need to join a regulatory body tasked with making sure all decorators are working safely and correctly (depending on the country).

6. Insurance policies

When you start running your business, you’re riding on a wave of optimism. Finally, everything’s going to go your way. You’ll make the money you were previously denied, have the freedom you always craved, and be able to truly express yourself.

But things won’t always go your way, so business insurance is important.

Depending on the type, breadth and level of insurance you go for, this can be a modest cost or a massive one. Either way, it’s not something that any business owner should ignore.

The long-term survival of your fledgling business is more important than your early profit levels, so take it seriously, shop around to find the best insurance deal, and get your operation covered.

7. Permits and licences

Running your cupcake business from the convenience of your own kitchen sounded so perfect.

But failing to take into account permits that your local council requires may mean that your business is cooked before you can even get it off the ground.

Find out what permits and licences you’ll need to do business in your area. There might be local, state or national requirements for your business to be legal – and they are often annual expenses.

Account for how often the permits need to be renewed and what the renewals will cost.

8. Equipment upgrades and maintenance

Sure, starting a business with just yourself and your laptop was a great idea at first, but that won’t be the case forever.

Remember that all office equipment – like computers, printers and even office furniture – has a functional lifespan. And nothing lasts forever.

Smaller items like paper, scanners, storage furniture and ergonomic chairs can often be overlooked.

Over time, everything you use in your business will need maintaining and upgrading, so make sure you think ahead about how much this might cost.

9. Invoice payment delays

One thing that can really hit your cash flow and your ability to pay yourself and your overheads are payment delays.

Just because you did the work and sent the invoice in good time doesn’t mean your client will pay you immediately. Forgotten invoices, bounced cheques and holiday delays often cause hiccups to your payment schedule.

Wages, insurance, rent and bills need to be covered, no matter what, so make sure you account for a float to keep you afloat.

10. Professional services

Bookkeeping, legal and accounting fees can run into thousands of dollars annually, but these experts can save you money and time. You may want to procure the services of a financial planner or business mentor to help you get a step ahead, but these valuable services come with a price tag.

Professional services could make critical improvements to your business, so factor these costs into your business planning.

Source: MYOB July 2021

Reproduced with the permission of MYOB. This article by Kayleigh Alexandra was originally published at https://www.myob.com/au/blog/hidden-costs-running-business/

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 the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. 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.