How to give yourself the best chance of a pay rise
By: Nicole Pedersen-McKinnon
Getting your money to stretch each week can be a hard slog. Expenses seem to go up and up while, for many people, income stays intransigently low.
But there are some ‘quick wins’ available when it comes to boosting your bottom line – you just have to be in the know...
Smart money move 1: Collect your tax refund every pay
Do you get a tax refund at the end of every financial year (in truth probably well after it)? Then you are letting the government use your money while you are sweating on every dollar. You can fill out what’s called a withholding variation form on the ATO’s website to have your PAYG (pay as you go) tax reduced accordingly – and get your refund spread all through the year.
Smart money move 2: Love your spouse and slash your tax
If you have a low (or no) earning spouse, their super will be limping towards your shared retirement finishing line. Meanwhile, you might be paying a bucket-load of tax. You can help both of these situations by making an after-tax contribution into your spouse’s super fund. If they earn less than $40,000, a $3000 contribution will snare you a tax offset of up to $540. The receiving spouse can’t have had more than $1.6m in their super immediately before the financial year the contribution was made and must not exceed their allowable annual after-tax contributions in the present year. Far from onerous criteria! (Note all my figures and thresholds are for the 2017/18 tax year.)
Smart money move 3: Get free money from the government
This is not extra cash in hand, but it will be when you retire. There is a bonus up-to-$500 super co-contribution available to everyone making less than $51,813 who pays in $1000 after tax. You have to be earning something to get this one and the same restrictions as above apply with respect to fund size and being below the annual contributions cap. But you wouldn’t look a gift horse in the mouth, right?
Smart money move 4: Buy health cover (maybe)
You get a tax rebate for private health insurance. Possibly more persuasive, though, is that if you earn over $90,000 as a single or $180,000 as a couple and don’t have it, you’ll pay a fine of up to 1.5 per cent. This Medicare Levy Surcharge usually amounts to more than the cost of the cover itself… so you may as well actually hold the cover. Oh and you’ll be charged a ‘lifetime loading’ of 2 per cent extra on your premiums for every year you delay getting insurance beyond age 31.
Smart money move 5: Check for bonus bucks
It probably sounds unrealistic that you could have unclaimed money but there’s some $18 billion in Australia without an owner: Besides the whopping $16 billion in ''lost'' super, which you can track down via your myGov account on ato.gov.au, the possibilities are:
- More than 150,000 people are the unknowing owners of $1 billion in shares, courtesy of the raft of demutualisations in the past few decades. Go to ASIC's central register of lost money to check for particular demutualisations. Call your relevant Office of State Revenue to reclaim your portion of the $150 million in related dividends.
- People have lost track of savings and term insurance to the tune of $700 million; again, this site will tell you if some is yours. Remember, if you’ve not touched a bank account for just seven years, it is deemed “lost” and snaffled by the Federal Government – the average is almost $1000!
Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product