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Tax-deductible superannuation contributions explained

Did you know you can claim a tax deduction on certain super contributions when you do your tax return?

Whether you’re employed, self-employed, unemployed or retired, you might be eligible to claim a tax deduction on your after-tax super contributions.

After-tax super contributions are voluntary payments made into your super and don’t include compulsory superannuation guarantee or salary sacrifice contributions.

How do I make a tax-deductible super contribution?

There are various ways to make an after-tax super contribution, including using money from your salary, savings, or the proceeds from an asset sale. When you contribute these funds to your super, you can claim a tax deduction on the amount when you do your annual tax return.

What are some of the benefits?

Putting money into super and claiming it as a tax deduction may be beneficial if you receive extra income that would otherwise attract personal income tax (as this is often higher).

Similarly, if you’ve sold an asset subject to capital gains tax, you may contribute some or all of that money and claim it as a deduction. This could reduce or even eliminate the capital gains tax owed.

What do I need to do to claim a tax deduction on a super contribution?

Make an after-tax contribution to your super

While you can contribute any amount, concessional contributions are capped at $27,500 per financial year. In some cases, you can make catch-up concessional contributions, but it’s important to check because if you exceed the cap, additional tax may apply.

Lodge a form with your super fund

The next step is to lodge a notice of intent form with your super fund, which will acknowledge receipt in writing. Importantly, you shouldn’t make any withdrawals, rollovers or transfers to pension before your notice of intent form has been lodged, as this may reduce or invalidate the tax deduction.

Have the paperwork ready when you do your tax return

Once the financial year ends, you can prepare and lodge your tax return using the written acknowledgement from your super fund.

Are there other things that I should keep in mind?

Your age

Recent changes to super have removed the need to meet a ‘work test’ before making a personal contribution or under a salary sacrifice arrangement. However, if you are 67-74, you must meet the ‘work test’ to claim a deduction on personal super contributions.i

The ‘work test’ requirements state that you must be employed or self-employed for 40 hours over 30 consecutive days in the financial year where contributions are made or meet the work test exemption rules.

For the work test exemption, you must meet three conditions:

  • You met the work test in the financial year before contributing.
  • Your total super balance is less than $300,000 at the end of the previous financial year.
  • You did not use the work test exemption in a previous financial year.

Contribution limits

If you’re claiming a deduction for an after-tax super contribution, the contribution will count towards your concessional contributions cap ($27,500 per year). Note that you may be eligible to contribute more if you have unused concessional contributions from previous financial years.

Importantly, other contributions also count towards the concessional contributions cap, including:

Other contribution incentives

After-tax super contributions that you claim a tax deduction for won’t be eligible for a super co-contribution from the government.

When you can access super

The Government sets rules around when you can access your super. Generally, you won’t be able to access this money until you’ve reached your preservation age and retired.

Super returns aren’t guaranteed

The value of your investment in super can fluctuate. Before making extra contributions, make sure you understand the risks.

Contact us to find out about other ways you can contribute to your super.

Your 7-point retirement planning checklist


Socialising with mates, enjoying leisurely activities and indulging in the odd trip away are all things that have likely crossed your mind when thinking about how you’ll spend retirement.
 
Beyond that though, have you given much thought to the logistics and what it’ll cost? If you haven’t, you’re not alone.
 
AMP’s 2022 Financial Wellness report reveals that almost half (46%) of working Australians don’t know how much they will need to have saved for retirement.

And perhaps this is because so few of us have set specific goals. Only 24% have a financial goal, with the rest of us yet to put pen to paper and flesh out what we’d like to achieve after we finish working.

Given all this, it’s not surprising our confidence about retirement is on the slide. More than one in five (21%) of working Australians are not at all confident they will be able to achieve their desired standard of living in retirement. That’s down four percentage points since the previous survey two years ago. And fewer than one in ten (9%) are very confident – down five percentage points.

So if you’re thinking of getting on the front foot with your retirement planning, here’s a useful checklist with the big points to consider.

Do I have to retire by a certain age?

The retirement age in Australia isn’t set in stone. You can retire whenever you want to, but factors that could play a part might include:

  • your health
  • financial situation
  • employment opportunities
  • your (and your partner’s) individual preferences
  • the age you can access your super.

What’s on my to-do list?

Think about what you may like to do in retirement and what the bigger and smaller priorities may be. Consider things such as:

  • your social life and recreation staying active and healthy staying active and healthy different retirement living options, which might include relocating to a new city
  • helping the kids, if you have any.

How much money will I need?

According to the Association of Superannuation Funds of Australia’s (ASFA) December 2022 figures, individuals and couples around age 65 who are looking to retire today would need an annual budget of around $49,462 or $69,691i respectively to fund a comfortable lifestyle.

To live a modest lifestyle, which is considered better than living on the age pension alone, individuals and couples would need an annual budget of around $31,323 or $45,106, respectively.

All these ASFA figures are based on the assumption people own their home outright and are relatively healthyii, and are compared to the Government’s current maximum age pension rates below.iii(These rates assume the maximum pension supplement and the energy supplement).

Per fortnightSingleCouple eachCouple combinedCouple apart due to ill health
Maximum basic rate$971.50$732.30$1464.60$971.50
Maximum Pension Supplement$78.40$59.10$118.20$78.40
Energy Supplement$14.10$10.60$21.20$14.10
Total$1064.00$802.00$1604.00$1064.00


Use the AMP Retirement calculator to estimate how much money you may require in retirement, taking into account your ongoing expenses and any potential one-off costs.

Where will my money come from?

The money you use to fund your life in retirement will likely come from a range of different sources, such as:

Your super fund

Generally, you can start accessing super when you reach your preservation age, which will be between 55 and 60, depending on when you were born, and retire. Knowing your super balance is a crucial part of planning for retirement, as it’s likely to form a substantial part of your savings.

If you’ve got more than one super account, there may also be advantages to rolling your accounts into one, such as paying one set of fees. However, there could be certain features lost in the process, such as insurance, so make sure you’re across everything before you consolidate.

Investments, savings or an inheritance

You may be planning to sell or use income you’re generating from shares or an investment property, or use money you’ve saved in a savings account or term deposit to contribute to your retirement. An inheritance or proceeds from your family’s estate may also help in your later years.

Government benefits

Depending on your circumstances, as well as your income and assets, you may be eligible for a full or part age pension from age 65 to 67 onwards (depending on when you were born), or you mightn’t be eligible at all.

Along with your savings, government benefits, such as the Age Pension, as well as Carer’s Allowance and the Disability Support Pension, could be an important part of your retirement income.

Concession cards, which are provided if you receive certain government income support payments, or the Commonwealth Seniors Health Card could also help you access discounts on health care and other things.

How can I withdraw my super?

Depending on how you withdraw your super and at what age, there will be different tax implications worth investigating, which will depend on your individual circumstances.

In the meantime, some of the options you’ll have around withdrawing your super include:

Transition to retirement pension

A transition to retirement pension enables you to access some of your super via regular payments (once you’ve reached your preservation age), whether you continue to work full-time, part-time or casually.

This may provide you with some financial flexibility in the lead up to retirement, but there will be things to consider, including that you’ll generally only be able to access a limited amount each financial year.

Account-based pension

If you’d like to receive a regular income when you do retire from the workforce, an account-based pension you’ve saved, so won’t guarantee an income for life.

You also won’t be limited in what you can take out, but each year you’ll need to withdraw a minimum amount. Note, you can generally only transfer up to $1.7 million in super into this type of pension too.

Annuity

Another option is an annuity product, which generally provides guaranteed payments over a set number of years, or the rest of your life, depending on whether you opt for a fixed-term or lifetime annuity.

They tend to be a more secure option as they provide a guaranteed income regardless of what might happen in financial markets. However, you’ll be sacrificing some flexibility as you can’t usually make lump sum withdrawals and your life expectancy may also be a consideration.

Lump sum

Taking some or all of your super savings as a lump sum can be tempting, particularly if you want to pay off debt, assist the kids, or go on a holiday. However, it might not be the best option for everyone, as you’ll need to consider how you fund your lifestyle after the money is gone.

While you may be eligible for government entitlements, such as the Age Pension, it might not cover the type of lifestyle you’d like to have after you finish working.

What other matters will I need to address?

Existing debt

When planning retirement, you may want to consider what outstanding debt you have and ways you may be able to reduce it while you’re still earning an income.

Check out these tips to reduce your debts before you retire and remember, if you’re experiencing financial hardship talk to your providers, as most can assess your situation and help you find alternative payment plans.

Insurance

You might have personal insurance, possibly tied to your super fund, but it’s worth checking you have the right type and that it’s appropriate for you. After all, what you require in retirement could be quite different to when you’re working.

Investment preferences

Investments are part of many retirement planning strategies, and when you’re retiring, it’s worth reviewing your investment style and the options you’ve chosen.

For instance, in retirement, you might consider a more conservative approach with less risk, as when you’re younger you generally have more time to ride out market highs and lows.

Estate planning, including your will

It’s important to think about your estate planning needs. For instance, have you documented how you want your assets to be distributed after you’re gone and how you want to be looked after if you can’t make decisions later in life?

Do I want to make any final super contributions?

The more you can put into super before retiring, the more money you’re likely to have when you retire.

Check out these 10 ways to boost your super, noting there are annual concessional and non-concessional super caps in place and if you exceed them, additional tax and penalties may apply.

You may also be interested to know that when you reach age 55 or over, you can make a voluntary contribution to your super of up to $300,000 using the proceeds from the sale of your main residence.

For couples, both people can take advantage of this opportunity, which means up to $600,000 per couple can be contributed toward super. There are however, downsizer contribution rules you’ll want to be across.

Whatever stage of life you’re at, your super will probably become the cornerstone of your retirement strategy. For more information and assistance planning your retirement, call our team on 5264 7700.

Christmas gifts that won’t blow your budget

Christmas is a wonderful time of year in Australia, filled with summer foods, decorations and of course, gift giving. This year will feel even sweeter for many, as friends and family reunite for the first time in months, if not years. Here are a few ideas to help you stretch your Christmas gift budget further, so you can enjoy more family time, without the financial hangover.

The Australian Retail Association (ARA) is forecasting a spending surge to match 2020, which was officially the biggest on record. Consumers splashed out more than $55 billion last Christmas, after enduring a harrowing 12 months of COVID-19.

Yet, after a year when both the pandemic, and environmental issues, have taken centre stage, is all this spending in our best interest?

Overspending at Christmas time is commonplace in Australia, with many people taking on debt that they have no way to repay.

Add to that, global supply issues have worsened in recent months, which means we’re likely to face shipping delays and product shortages this Christmas. The ARA says that could lead to higher prices at the register.

So if you’d like to avoid a budget blowout and have a more ‘conscious’ Christmas this year, here a few alternative ideas to help you celebrate.

1. Buy local

If you want to avoid price rises and shipping delays this silly season (not to mention helping the planet) one of the best things you can do is buy locally. By purchasing from small businesses, artisans and producers in your local area, you’ll help to create jobs and keep more of the money in your community.

Local suppliers often also have different and unique products for sale that aren’t available from national chains. So look out for your local Christmas market, craft fair or farmers market, or choose gifts from a small businesses nearby.

2. Get creative

If you enjoy making things, this is for you. What could embody the spirit of giving more than creating your own beautiful handmade gifts? This is the perfect activity to do with kids (or without!).

Baked goods, scrapbooks, drawings, paintings, jewellery, soaps, candles, even face masks can all be made. Not only will you save money, giving will feel more meaningful when you’ve put your own time into it.

3. Give an experience

Even better than material goods, why not give the gift of an experience? Experiences are more memorable, offering the recipients a chance to connect and enjoy themselves. The possibilities are endless, so you’re sure to find something that suits. You could go traditional with restaurant vouchers, movie tickets, zoo or aquarium passes, or more unusual, like hot air ballooning, art or cooking classes or even a weekend away.

4. Give your time

If you can’t afford an elaborate gift, you still have something everyone needs – time! Giving your time without expecting anything in return is the perfect way to embrace the spirit of the holidays. Perhaps you could gift an elderly relative with some help around the house, offer to babysit your sister’s kids for a night, finish a DIY project for your mum, or stock someone’s freezer with enough meals for a week. There are lots of thoughtful and creative options that will keep your budget intact.

5. Make a donation

If the people you love truly don’t need anything, perhaps they’d appreciate you donating a gift on their behalf. Here are a few options:

Remember, less is more

Aussies are a generous lot, and we’re each planning to spend $726 on gifts alone this Christmas! Now we all want to give people the world, but perhaps it’s worth taking that more literally this year. In most cases, one simple gift is enough and can even be more appreciated. You’ll be doing them, the environment, and your budget a big favour.

Of course, if you’d prefer to focus on spending time together rather than doing the Christmas shopping, that’s ok too! Discuss how you feel with those closest to you and let them know you’ll be prioritising time together over physical gifts. It could help you start the new year in a better financial position than ever.

What is diversification?

Diversifying your investments will reduce their risks and volatility, but what does it involve?

Often described as “not putting all your eggs in one basket”, diversification is crucial to reducing the volatility of investing. It’s about spreading your risks.

We know that the markets for different asset classes – such as bonds, shares, property or infrastructure – can go up and down for many reasons, but they usually don’t move in exactly the same way. While one market can be up, another can be down. That’s because different asset classes react differently to what’s happening in the economy and developments around the world.

To reduce the pain that can be caused by a fall in one market, the experts believe you should spread your risks across several markets. So, when one asset market is down, the losses may be offset by gains from another market which has been performing better at that time. For example, if shares are down, bonds may be up, and vice versa.

Indeed, it’s been found that a portfolio made up of different kinds of investments will, on average, produce higher returns and have less risks and volatility than any individual investment in a portfolio.

Diversification considerations

When diversifying your portfolio, you need to consider what risk-return trade off you are willing to accept. The asset classes likely to produce the best returns also have the highest risks. These are called growth assets and include shares, alternative investments and property investments. To spread your risks, you would mix them with defensive assets such as cash and fixed interest, which have lower risk and returns.

That said, it’s important to note that asset classes aren’t the only way you can diversify your holdings. You can diversify your share portfolio by investing in both Australian and international shares. You can go even wider by diversifying your overseas share portfolio into both developed markets and emerging markets, or by regions, such as Europe or Asia, or even by country – for example, by investing in Chinese or US shares.

Spreading your risks

The Australian share market accounts for less than 2 per cent of the value of the world’s share markets. This means you have plenty of opportunities to pick from outside of Australia. Different overseas markets are likely peak at different times, depending on their economic conditions. When the US market is in a slump, China might be booming.

Your share portfolio can also be diversified across different types of sectors, for example, financial services, mining, healthcare or industrials. And it can be spread across the size of companies, such as large companies and small companies, or by the different investment philosophies of your fund managers. Fund managers with different focuses – for example, on value or growth investing – perform better at different times of the investment cycle.

Remember that you don’t need to have millions of dollars to diversify. In addition to investing directly, you can access different countries and regions through managed funds, exchange traded funds or investment options offered by your super fund.

Similarly, your bonds investments can be diversified by country or by type, for example, government or corporate bonds. Your property holdings could include direct or listed property, or be spread across residential, retail or commercial property.

As always, we are here to help. If you have any questions about diversification please don’t hesitate to contact our team.

How to help your children with buying property


With property prices rising at a record rate in many cities across Australia, the ‘bank of mum and dad’ is playing a bigger role than ever as many parents feel pressure to assist their children in buying a home.

For many Australians, home ownership is not just seen as the great Australian dream, but it also represents financial security and an important step in adulthood.

However, rapidly escalating prices, particularly in highly-desirable capital cities such as Sydney and Melbourne, has put that first step on to the property ladder out of reach for many young people. This in turn has led to many children turning to their parents for assistance.

According to the AFR, parental contributions are averaging more than $89,000, an increase of nearly 20 per cent in the past 12 months. In fact, the ‘bank of mum and dad’ has about $34 billion in loans, making it the nation’s ninth-largest residential mortgage lender and bigger than HSBC, AMP and Bank of Queensland, according to data from Digital Finance Analytics.

For parents who want to help their children into home ownership, there are a number of strategies and pathways to consider.

Contributing to a deposit

Most lenders recommend prospective home buyers have 20% of their loan available as a deposit, and contributing to this deposit is often what first comes to mind when parents think of how they can help their children, as scraping together a deposit is generally considered the most difficult step in buying a first home.

If you are contributing a cash amount, make sure you have clear discussions with your children about any expectations related to your contribution – for instance, if you are making the contribution in lieu of leaving them money in your will, make this very clear and don’t hesitate to put it in writing, especially if you are doing this for one child but not others.

Acting as guarantor

A guarantor home loan is when someone, in this case a parent, offers up part of their home equity as security to top up the buyer’s cash deposit.

It means the buyer only needs a small deposit or sometimes none at all, and avoids paying costly lender’s mortgage insurance (LMI).

It’s crucial that you only agree to act as guarantor if you have full confidence in your child’s ability to make their loan repayments. If they default, you will be liable and your own home may be at risk.

Providing a loan

Whether through an official loan provider or a private agreement between parent and child, you may be in a position to loan your children the money they need to buy a home or for their deposit.

Keep in mind that this assumes they will be able to make their official home repayments as well as paying back the initial loan, and it is important to have honest discussions that clarify how they will manage this, and a timeframe for repayment.

Always put your well-being first

It may sound selfish and like it goes against what we’re told as parents, but it is crucial that older Australians put their own financial security first.

If you are simply not in a position to assist your child, do not feel pressured to put your financial wellbeing at risk in order to help them, especially if you have doubts about their ability to manage the repayments and responsibility of a home loan.

In this case, have a frank discussion with them about your will and what you will be able to provide for them after you have passed. You can also direct them to seek professional financial advice. Please don’t hesitate to contact our team with any questions.

2021 FEDERAL BUDGET


The 2021 Federal Budget has been announced, providing contribution opportunities for older Australians, ongoing assistance for business owners, and support for people looking to purchase a home. We have compiled some key points which may be relevant to you.

Remember, these announcements are just proposals and legislation would need to be formally passed before they become law.

SUMMARY

Taxation

  • Extension of the low and middle income tax offset (LMITO) for an additional 12 months
  • Tax relief for businesses, including extension of the instant asset write-off provisions
  • Medicare levy surcharge and private health care thresholds unchanged

Superannuation

  • Removing the work-test for people aged 67-74 in respect to salary sacrifice and non-concessional contributions (NCCs)
  • Expanding eligibility to utilise the NCC bring-forward rule to people aged 67-74
  • Reducing the eligibility age for downsizer contributions from 65 to 60
  • Ability to commute certain legacy income stream products

Social security and aged care

  • Changes to Pension Loans Scheme allowing limited lump sums
  • Additional support to older Australians through home care resources
  • Measures in response to the Royal Commission into Aged Care Quality and Safety

Home ownership

  • Additional places under the First Home Loan Deposit Scheme (New Homes)
  • Support for single parents with dependants to purchase a new or existing home.


If you have any questions regarding the proposed Federal Budget and how it may affect you, please don’t hesitate to contact our team. Alternatively you can find further information at https://budget.gov.au/

What does it really cost to raise kids?

We often hear that raising kids is expensive, but just how much will it cost you over the first five, 10 or 20 years? Here’s a closer look at the costs of each stage of life.

If you’re thinking about having kids, or have already taken the plunge, you might be wondering how much you’ll need to budget for their welfare.

There are a few different answers to that, and it largely depends on your own standard of living and income level.

How much does it cost to raise kids in Australia?

2018 study by the Australian Institute of Family Studies looked at the weekly cost of raising a six-year-old and a 10-year old. They found that it cost unemployed families $140 per-week, per-child, and $170 a week for low-paid families.

That figure included the minimum necessary for healthy living, like food, clothing, school and household expenses (e.g. energy and transport costs). Altogether, it adds up to $8840 per year.

On the other hand, a 2013 University of Canberra (NATSEM) report found the cost for a middle-income family of raising two children until they left home was $812,000 and $1,097,000 for high-income families. This research was more extensive, but it’s now eight years old, and living costs have increased since then.

So it’s likely that both the AIFS and NATSEM figures underestimate the true cost of raising kids for most Aussie families in 2021.

What are the costs at each stage of life?

The research is consistent about one thing though, the cost of raising kids increases as they get older, as well as with the family’s income level.

That’s a useful insight to inform your financial planning. If you know that the biggest expenses will come in the teen and post-school years, you can put a plan in place early to cover those costs. Here’s an overview of what to expect at each stage.

Budgeting for baby

Bringing home a baby is an exciting time! It can also be an expensive one for new parents. Consumer watchdog Choice says you can expect to spend $3500 a year on purchases for the first four-years.

Keep in mind, that only includes direct expenses like furniture, clothing, nappies, food and toys. You’ll also need to factor in transport, utility bills, health and medical expenses, entertainment and lost income from time off work. Fortunately, the cost does decrease with each additional child, as you’ll likely be able to re-use some of your baby goods.

Pre-school years

The years between two and five are some of the most precious, when you’ll make a lifetime of memories together!

Now, everyone knows toddlers have the best social lives. But depending on where you live and what you choose to do, all of those outings and social activities can really add up. From swimming lessons to gym classes to zoo trips, you can expect to spend at least $20 per activity, per week.

The biggest expense most parents encounter at this age however, is childcare. Care for Kids puts the average cost of childcare at $113 per day (before subsidies). However, that’s likely to be significantly higher if you live in the city centre. In the Sydney city centre, the average daily price rises to $166, in Melbourne it was $156 and in Perth it was $147.

Outer suburbs fared better, with the cost averaging $108.87 a day in New South Wales’ Camden and $99.90 in Queensland’s Ipswich.

The primary school years

Starting school is an exciting milestone for any family. It also means you’ll no longer have day-care costs, although that’s often offset by the rising cost of education. School uniforms, books, stationary, sports and recreation, social outings – and most recently, technology like laptops and mobile phones – all adds up. You may also need to factor in before and after school care if you’re planning on working full time.

The early primary school years are a good time to start talking to your kids about money, especially earning pocket money, saving and spending it.

Teenager times

Tweens and teens are an expensive bunch, it seems! It’s at this age that the costs of food, education, socialising, technology and clothes really start to make a dent.

The costs of education are especially eye-watering – and unexpected – for many parents. A 2020 study that indexed education costs across the country found that parents are paying a staggering $81,823 on average to put their kids through public school in metro areas, and $66,603 in regional areas.

The researchers said the annual school fee of $433 was “only a fraction of the total, with the remainder going towards other related costs such as outside tuition, school camps, sports equipment, electronic devices, uniforms and textbooks.”

If you’re planning on sending your kids to private school, you’d better start saving early. Parents in Sydney with a child starting at an independent private school in 2021 could expect to pay nearly half a million dollars ($448,035 to be exact) in total. On the flipside, country New South Wales was the cheapest place to send your kids to private school, at just $133,920.

Again, costs varied widely between regions, with the cost in capital cities almost double that of the country.

Given all the expenses associated with the teen years, this is an important time to continue teaching your kids about budgeting, saving and how to prioritise their needs and wants. Don’t forget to educate your kids about debt – with all of the buy now, pay later options available, younger people are increasingly finding themselves indebted at an early age.

Read more: Why a job means more to kids than money

Don’t be left wondering if you’ll be able to afford to give your kids what they need. Start planning for their financial future as early as possible by putting a family budget in place, together with a longer-term financial plan and an estate plan. That way, when expenses come up, you won’t be caught short.

Summer Newsletter 2020

Click here to read our Summer 2020 Newsletter

Deferred loan repayments

What you need to know if you deferred your loan repayments due to COVID-19

If you’re one of 900,000 Aussies who deferred their home or business loan due to COVID-19, you could be getting a call from your bank in the next few weeks. Here’s our guide to your options.
With the initial six-month deferral period coming to an end, lenders have started contacting customers who deferred their home and business loans due to COVID-19.
Over the next month, Aussie lenders will contact more than 450,000 borrowers to assess whether they can start repaying their loans.
That includes at least 260,000 mortgage deferrals and 105,000 business loan deferrals. More than 900,000 loans have been deferred in total since the beginning of the pandemic.
So what are your options if you deferred your loan and you’re yet to resume paying it?

1. If you can afford to resume loan repayments
Borrowers who are in a position to resume their repayments will be asked to do so. That means if you’re employed, or your business is in a better position than when you deferred, you’ll need to start making repayments. But don’t worry, that’s actually a good thing.
This is because lenders can capitalise unpaid interest from your deferred payments into the balance of your loan. So the longer you defer your payments, the more unpaid interest will accrue. You could end up with a higher loan balance – and higher repayments – than when you started the deferral.

2. If you can’t afford your full loan repayments
The Australian Banking Association says banks are keen to work with borrowers to find a way for them to resume making repayments. That might mean restructuring the loan, converting to interest-only payments for a period of time or extending the loan term.
All of these options are designed to reduce the size of your repayments in the short term, which might be just what you need to get through the pandemic.
However, be aware that there may be longer term implications. Always do your due diligence and ask your lender what you’ll end up paying over the life of the loan. And if you’re in any doubt, seek professional financial advice before making a decision.

3. If you can’t afford to start repaying your loan yet
Some mortgage holders who are still struggling financially due to the impact of COVID-19 may be eligible for a further four-month extension to repay their home loans.
The extension won’t be granted automatically, but it will be determined by lenders on a case-by-case basis. If you think you’ll be in a better position to start repaying your home or business loan in a few months’ time, speak to your lender about it.
But once again, don’t forget to find out how much more you’ll pay over the life of the loan, and what your repayments will be.

4. If you’re in severe financial difficulty
If you don’t think you’ll be able to start repaying your home loan in future, and you’d like to understand your options, speak to a financial counsellor as soon as possible.

A financial counsellor can work with you to understand your true financial position and, if possible, put a budget in place to meet your mortgage repayments. They can also help consolidate and restructure other debts, and negotiate the best possible terms with creditors.
If you are thinking about selling your home, speak to your bank and find out whether any fees apply for exiting your mortgage early. Whatever you do, don’t make any major decisions without speaking to a financial counsellor or a certified financial planner first.

5. Get your financial foundations right
Whatever your current circumstances, there’s never been a more important time to get your finances on track. That means sticking to a budget, reining in your cash flow and seeking professional financial advice.
While many people think financial advice is only for the wealthy, in reality you can benefit significantly at any age or stage of life. In such an uncertain environment, getting professional financial advice can give you peace of mind and put you on track to emerge financially stronger than ever.

Remember, we’re here to help. If you have any questions about your loan repayments, don’t hesitate to reach out to the Coastline team.

FEDERAL BUDGET 2020-21

Federal Budget 2020-21 round-upCLICK HERE

Find out how the measures announced in the Federal Budget could affect you.

Federal Treasurer Josh Frydenberg handed down his long-awaited 2020-21 Federal Budget. Among the proposed changes, he announced income tax savings and superannuation reforms.

Read on for a round-up of the proposals, and a look at how they might affect your household expenses and financial future, whatever your stage of life.

Remember, at the moment these are only proposals and could change as legislation passes through parliament.

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