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Sunday, 24 May 2009

This and that

DS1 competed in his first Judo tournament today. There were only three competitors in his age/weight category, so he only had two 1.5 minute bouts - winning his first bout and losing the second in a close contest. The competition was held at a nice venue at the Sydney Olympic Park, and only cost $10. On the downside, weigh-in, getting organised, and the competition took four hours - so there was a lot of waiting around involved, which DS2 found boring after a while.

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DS1 had broken his clarinet (again) at the end of last term, so I gave him my clarinet to use for his practice and at school band. He managed to break the ligature on my clarinet after taking it to school for two weeks, so I had to buy a new ligature at the music store yesterday - $30 for a small bit of plastic strap and a thumbscrew! I keep threatening to deduct the repair costs from the money he earns busking with his recorder, but so far I haven't actually made him pay for anything. At nine years of age it seems a bit harsh to take money off him for being careless.

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Centrelink has sent us a form to update our income estimate for the new financial year starting 1 July. Under the new rules any net investment losses (such as resulting from a negatively geared rental property or using a margin loan to invest in the stock market using borrowed funds and paying more interest charges than are received in dividends) are added back in when calculating "assessable income" to decide if/how much government benefit we should be paid. DWs income will rise slightly as her superannuation salary sacrifice will now be included in her assessed income. My income estimate will rise considerably under the new rules as I have negatively geared stock investments and make large pre-tax contributions into superannution (although next FY my salary sacrifice amount will be severly reduced under the new $25K cap on concessionally taxed superannuation contributions). We're unlikely to receive much in the way of Family Tax Benefit payments after 1 July, and I expect that will also mean we no longer get any childcare rebate. I have no idea how I can accurately estimate my income for 2009/10 before the 15 June deadline - our company doesn't even announce the pay rise for the new financial year until just before 30 June, and I have no way of knowing what stock dividend payment and margin loan interest payments will be next year. I'll probably just assume a 4% pay rise (the most we can expect without a promotion, based on the current AWE data) and that I have no net investment income. Any net loss from my geared share investment portfolio is likely to be offset by the net income from our rental property. If our estimated income turns out to be too low we will eventually have to repay any excess benefits we've received, which I'd prefer to avoid. On the other hand, overestimating income might result in us not receiving childcare benefits that we should be entitled to - as far as I know you have to claim childcare benefits within a few months of making a childcare payment, and any under-payment won't be "topped up" after our tax return is finalised in October 2010.

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As the recession continues to worsen in Australia, people at work are starting to wonder about their job security. With unemployment still around 5% and predicted to rise to around 8.5% in the next few years, odds are that most of us will probably be OK. However, you never know if your company will be one of those that slashes it's workforce, or goes out of business entirely, so everyone is understandably nervous. My immediate boss was retrenched last December, which left me as the only internal audit/QC resource with extensive knowledge of our systems and processes. Hopefully this makes my job somewhat secure - but you can never be certain.

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The two main supermarket chains are slugging it out with competing rewards programs. Both Coles and Woolworths offer 4c/L fuel discount coupons if you spend more than $30 in one transaction. Woolworths had been sending occasional email offers of higher fuel discounts - for example a 15c/L discount if you spent $300 with them in one week. To counter this Coles has introduced a gift card offer for a limited period - if you spend over $30 in a transaction you accumulate points that count toward the value of gift card you will receive at the end of the promotion period. It's quite clever marketing as the cumulative value of the points, and the minimum required to be eligible for a gift card, means that many customers may prefer to shop at Coles instead of Woolworths during this promotion period.

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I arranged the transfer of $500 each into the superannuation accounts of DS1 and DW (from their savings accounts). That brings their total personal, after-tax contributions into their super accounts to $1000 each this financial year. They should each be entitled to receive the government's $1500 co-contribution. I also contributed $1000 after-tax into my SMSF this year, but I probably won't get any co-contribution - I think salary sacrificed income is included when deciding if you're within the co-contribution cap.

Next year the co-contribution has been reduced to a maximum $1000 match if you contribute $1000 post-tax into superannuation (and are under the $38K cap for maximum co-contribution).

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1 comment:

Penny in Australia said...

oops - I incorrectly posted this on your current post (12.6.09) - but it actually belongs here!

"but I probably won't get any co-contribution - I think salary sacrificed income is included when deciding if you're within the co-contribution cap" no, for the financial year 2008/2009 (and prior) salary sacrifice incomed is NOT included as part of your total income, which is what is taken into consideration by the ATO when deciding if you're eligible for the Co-contribution.

From 1 July 2009 though, it is. Therefore, it would probably not be worth it to make personal (after-tax) contributions to your super account after 1 July 2009 if you earn over $60,000, because from then on you WON'T get the Co-contribution. (Can you tell what industry I work in?!).