Aug 16, 2007

10 Things to Know

DID YOU know that some Australians can receive up to $36,000 from the Federal Government just for staying in the workforce? You'll have to do more than just stay put in a job to qualify for the $4000-plus baby bonus, but it doesn't require much effort - or even a partner - to claim $1500 from the Federal Government for your super co-contribution.

Most of the time, we know if a benefit is coming our way and some are automatically paid to those who qualify. But sometimes we forget to apply for special benefits or we haven't noticed that the qualifying rules have changed. So here's a snapshot of some of the popular and lesser-known government benefits and who's entitled to them.

You never know, there might be a nice big chunk of cake out there with your name on it!

1 IT PAYS TO BE GREY

If you are aged 60 and not working full-time, chances are you'll qualify for the coveted Seniors Card, issued free by each state and territory government. The card enables holders to get a wide range of discounts on public and commercial activities. The savings on public transport alone are potentially worth hundreds of dollars a year (see http://www.seniorscard.nsw.gov.au or http://www.seniorscard.vic.gov.au).

In NSW about 1.1million cardholders (90 to 95per cent of all those eligible for the card) also have access to the Senior Shopper service - a concierge-style service that aims to find the best price for a particular item from a preferred list of suppliers. Another prized Federal Government benefit for self-funded retirees of pension age is the Commonwealth Seniors Health Card. This card provides access to concessions on prescription medicine and the telephone allowance. It is available to people with an annual adjusted taxable income of $50,000 (singles) or $80,000 (couples) with lower limits for those with dependent children or ill health. See http://www.centrelink.gov.au.

2 BABY REWARDS

Federal Treasurer Peter Costello issued a challenge to Australia's flagging fertility rate in the 2004 budget in the form of the baby bonus. This one-off payment of $4133 to the parents of every newborn child is set to rise to $5000 from July 1 next year. It is not means-tested, but there are eligibility requirements, such as Australian residency. See http://www.familyassist.gov.au.

3 KEEP YOUR TODDLER HEALTHY AND GET $229

It literally pays to get your baby immunised. There's a one-off payment of $229 for children aged between 18 and 24 months who are fully immunised. See http://www.familyassist.gov.au.

4 FIRST HOME BUYER PERKS FOR CO-OWNERS

First home buyers in NSW can now buy a house with mum and dad and still qualify for first home buyer concessions. Most first home buyers living in NSW and Victoria would be aware of the First Home Owner Grant of up to $7000. Both states also provide first home buyers with generous concessions on stamp and mortgage duty. But it was only in May this year that the NSW Government decided to extend its duty concession (on a proportional basis) to first home buyers purchasing a property with friends or relatives who have previously owned residential property. Under the First Home Plus One scheme, buyers are required to have at least a half share in the property. See http://www.osr.nsw.gov.au.

5 CHILD-CARE TAX REBATE

A word of warning: if your child is cared for by a paid nanny or attends a child-care centre that is registered but not approved by this scheme, you will not be able to claim the rebate. The rebate covers 30per cent of out-of-pocket costs, calculated as the total fees charged for approved child care minus the child care benefit (CCB) entitlement. To be eligible families must receive CCB and meet the CCB work/training/study test and there is a maximum rebate payable of up to $4000 a child. Child-care tax rebate claims for the 2004-05 and 2005-06 financial years can be claimed through the Tax Office. From 2006-07 the payment is delivered through the Family Assistance Office. See http://www.familyassist.gov.au.

6 SPOUSE SUPER CONTRIBUTION

The spouse super contribution is the sort of offset that could easily be overlooked. It's not going to make anyone rich in retirement, but it could put an extra $540 in your pocket. If your spouse earns less than $10,800 a year, then you can claim an 18per cent tax offset on contributions up to $3000. The offset reduces up to a salary of $13,800 at which point it cuts out. See http://www.ato.gov.au.

7 UP TO $1500 WORTH OF FREE SUPER

Need some help saving for your retirement? How does a free $1500 a year sound? Whether you're a teenager with a part-time job or a 60-year-old who has already amassed a respectable retirement nest egg, the Federal Government's co-contribution scheme could boost your super fund by as much as $1500 a year. The scheme is open to anyone earning less than $28,000 a year and phases out at $58,000. All you have to do is contribute $1000 a year (after-tax) into superannuation and the Government will top it up with as much as $1500.

For those who took advantage of the co-contribution scheme in 2005-06, the Government was even more generous, increasing the top-up to $3000 in a once-only bonus. The earlier you take advantage of the scheme, the better, as the scheme is worth potentially hundreds of thousands of dollars in extra retirement savings to participants. See http://www.ato.gov.au.

8 BE PAID EXTRA TO STAY IN THE WORKFORCE

To stem the tide of age-pension applicants, the Federal Government now offers a range of financial incentives aimed at encouraging older people to stay in the workforce. Even those who don't consider themselves to be all that old are getting rewarded for going to work. If you are aged 55 or more, for example, you may qualify for the mature age worker tax offset, which can reduce your tax bill by up to $500 a year.

Even better for those that qualify is the pension bonus scheme, which rewards seniors who defer claiming the age or service pension. This scheme could be worth as much as $32,000 to a single person over five years or nearly $54,000 for a couple. While the scheme isn't relevant for self-funded retirees, more people are likely to benefit with the broadening on the age pension means test later this year.

But to qualify you need to register early as a member of the scheme then continue working to meet a work test for at least 12 months before claiming the bonus.

And don't forget the sweetest offset of all: the senior Australians offset, which is available to those who meet certain eligibility conditions. In a nutshell, this tax offset allows you to earn more income before you pay tax.

It may even result in you no longer having to lodge a tax return. For the 2007 year, this offset is worth up to $2230 to a single and up to $1602 to each spouse of a couple. This means a single person can earn up to $24,867 before paying tax, or up to $20,680 for each member of a couple.

For further details, see the Tax Pack 2007, http://www.ato.gov.au and http://www.centrelink.gov.au.

9 REDUCE YOUR TAX BY 25 PER CENT

Who wouldn't want to reduce their tax? But, strangely enough, many people haven't heard of the 25per cent entrepreneurs' tax offset, which benefits more than half a million Australian small businesses each year. A discount applies to businesses or sole traders with a turnover of $75,000 or less, with the maximum discount of 25per cent available on turnovers of $50,000 or less. The maximum possible benefit depends on the amount of tax that would otherwise be paid.

For example, if a company has a turnover of $50,000, the maximum tax it would pay would be $15,000 (i.e. 30 per cent of $50,000). The 25per cent discount would reduce this tax liability by $3750, to only $11,250. The discount has the potential to reduce the tax paid by eligible businesses or sole traders by several thousands dollars a year. See http://www.ato.gov.au.

10 MEDICAL SAFETY NET

So you've just forked out a couple of thousand dollars for the kids' braces? Ouch. But help may be at hand with the often overlooked net medical expenses tax offset, which applies even if you are also claiming the private health insurance rebate.

This allows you to claim a tax offset of 20per cent on your net medical expenses (what you have paid in expenses minus any refunds you got from Medicare and your private health insurer) over a $1500 threshold.

You can claim expenses relating to an illness or operation paid to legally qualified doctors, dentists, nurses or chemists and public or private hospitals. Orthodontic expenses may be eligible if the procedure is used to fix crowded teeth or a misaligned jaw. The key to getting the most from this offset is to keep all of your receipts - from major surgery right down to receipts for Panadol or cough syrup. For more information, see http://www.ato.gov.au.

CASE STUDY: He's got a ticket to ride

A FREQUENT user of public transport, Tony Antill knew he would get great value from his Seniors Card from day one.

"I knew I would be using it straight away so when it came to arranging my working hours after my 60th birthday I made sure I didn't work more than 20hours a week," says the now 68-year-old former accountant who these days enjoys an active life as a volunteer for a range of organisations including the Blood Bank and the Sydney Harbour Federation Trust.

Tony estimates that the card has saved him thousands of dollars in reduced travel costs as well as store discounts over the past eight years.

"One of the major assets is obviously the discounts on travel but I've been surprised at how many small businesses provide a discount just for the asking," he says.

These include car-hire companies, pharmacies, men's wear stores and Tony's local cinema, where the seniors' discount on ticket prices is as high as 50per cent. Despite there being no formal reciprocal rights between states when it comes to the Seniors Card, Tony's experience travelling interstate is that any seniors card probably holds sway if you're brave enough to flash it.

"I think the key to success with the card is to pipe up and ask if a discount applies to seniors. The worst thing that can happen is that the answer is no."


Source from somewhere.

Aug 9, 2007

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Jul 18, 2007

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Jun 19, 2007

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