The tax “cut” is disguised as a rebate - where people will pay the tax but get up to $540 back on $120,000 after they file their next tax return. So really the Tories are planning on the government getting an interest-free loan from low-middle income earners for 18 months or so.
And Morrison has the gall to say “families need this tax cut now”!
Then they propose to give a $7000 cut to people over $200k, which is a 3.5% reduction. The $540 rebate on the $120k income is 0.45%.
One thing you have to credit the Tories for - they always strive for new levels of hypocrisy.
I don’t know if it’s an urban myth but I’ve always heard that they make it very difficult to claim insurance through your super compared to having policy outside super. I understand for income protection you have ‘same job’ and ‘different job’ insurance, can’t remember correct terms, that makes it hard.
The mob you worked for had one of the most ridiculous insurance arrangements I’ve ever seen. If you didn’t make a contribution for a number of weeks, your insurance, which you kept paying $x a week for, was cut off. The insurance component was the simple reason why they struggled to write a new system for it, and eventually why the company was sold. On the legacy system, it was cobbled together over decades and held up, but I bet you it was all spaghetti code.
But the big issue with the insurance component was that young people would get signed up for multiple funds, depending on their employers, and each with an insurance component which they paid a premium for, eating into your account balance. At least that’s been catered for now.
Of course, super is too hard for anyone to actually read the documentation for, so the insurance would default in. Best of luck getting paid multiple times if you cark it though. And young people just don’t need life insurance unless there’s something to be catered for if they die, like a family or a mortgage.
20 year old son of a workmate had 3 super policies and 3 lots of insurance premiums.
I see no reason why insurance shouldn’t be bundled with super. The group cover makes it much cheaper, and less vulnerable to getting eaten by commissions.
You’re thinking of the TPD or total and permanent disability. To be able to claim it if you can never work in your trained job again or never to work any job again. TPD in super can only have the any definition. Outside of super there is quite a difference in premiums between the two definitions.
SMSF has the advantage that you can go with any insurance provider (as long as the policy meets super rules).
On life insurance for group policies as well, if you leave the company you can continue with the insurance but it converts to retail rates. In addition most policies will all assume you are a smoker which doubles the price.
Be aware too most group policies will have any entry fee as well, normally linked to paying an adviser.
That is what any Budget in any election year is. Just a grubby example of desperate incompetent politicians trying to keep their jobs.
And the fact that the tax scale will tend further towards a flat tax rate shouldn’t be a surprise coming from a government which undoubtably has a high proportion of members who believe that the Earth is also flat.
Yes that’s exactly what I was thinking of as I spoke to a super insurance adviser awhile ago who took me through all the insurance types. Out of curiosity - why does super have the any definition only.
I used to think was a myth as I’d never seen it occur. But the my mate got lukemia, was written of by his doctors and then comminsure refused to pay. In the end they did pay when he survived and went on national tv.
I think that particular superfund ditched comminsure after that.
Nothing wrong with salary-based cover in salary-based occupations, as long as the insurance amount was offset by the account balance.
I saw a number of grandfathering arrangement where the insurance amount was based on the old rules. A person insured for 5 times salary pays a huge amount less per annum at age 35 than at age 55. Particularly as a 55-yo will generally have far less need for insurance, with the kids moved out and the mortgage almost gone, than a 35-yo. And the account balance at 55 will usually be vastly higher than at 35. He’ll receive the account balance in addition to insurance.
From memory i’m pretty sure it’s to do with the release clause in super. The benefit is paid to the super fund, thus to get the money out you need to meet the criteria for early release. Thus an own occupation definition doesn’t match where as an any occupation definition does.
I was at a seminar commbank did during this (if it was the same case) and commbank maintained they did nothing wrong.
Trauma and TPD insurance are the ones that get particularly tricky when it comes to payout time. Cancer for example has many definitions and also has medical hurdles to pass before it’s considered their definition for a payout.
What people also don’t know is that there is a PDS (the product disclosure statement) but also a separate book that defines the coverage (i.e. the fine print version). Very hard to get a public copy of this and even when I was working in the industry most companies weren’t easily convinced to give you a copy.
I won’t say that both are a con as I had quite a few clients who were paid out and it honestly made a huge difference to their comfort and recovery.
With regards to insurance within superannuation though it generally bypasses the ‘retail’ arm and goes straight to the reassurers. In Australia there are only 4 companies that offer insurance. The retailers / super companies buy it from them, tweak the model and then onsell it to you the consumer. Those 4 companies are often faceless as they have no retail component so it’s hard to get to the right people to discuss any claims.
In addition group policies will often exclude by default any existing conditions you have. When you hear ‘no medicals or blood tests’ like the endless ads they are simply excluding you for that. The solid insurance covers want to know upfront if they will cover you and will let you know upfront what they won’t cover as an exclusion (thus the needs for medicals etc…). Group policies can also cancel your cover at any time. So for example if you claimed 6 months on your income protection insurance, go back to work, they can cancel all the other covers and your income protection insurance as well. Outside of this, those who do proper checks, it is illegal to cancel cover due to having made a claim.
A lot of people think insurance is straight forward but there is a reason you need to be licensed and give tons or paperwork to give advice in this field. When it comes to insurance most financial planners do work in the clients best interest.
I remember when the firm i worked at did consulting work to the VRC fund, and assessed whether the fund (which self-insured) should pay a TPD benefit to one of their senior guys.
The guy doing the assessment said “he’s got a dodgy heart, you don’t pay TPD for a dodgy heart”.
Two days later, back page of the Sun announced that said guy has died from heart attack.
It gave me an opportunity to use the old epitaph “I told you I was sick”. Not that it mattered with the claim. A letter wouldn’t even have reached them by the time he died.
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You know you’re simplifying it a bit too much there right? TPD doesn’t pay out for a heart attack either or even a quad bypass.
It doesn’t matter what condition you have, it’s a question of if you are permanently and totally unable to ever work again. It’s the idea of what is permanently and what is totally is that makes claims hard.