Centrelink help

Ldp1 on 21/06/2014 - 19:49

I realise that this post may just confirm the cliche of the middle class culture of entitlement but here goes.

We are expecting child no. 3 in December this year. I am mum, self employed and sole income earner while he has been a stay at home parent for the last 6 years. It appears from the rules on paid parental leave that I am going to be over the $150k income test for the current 2013-14 financial year by about $4000. In hindsight I should have taken the remainder of the year as unpaid leave as soon as I discovered I was pregnant.

I realise that this is a pretty good income and I am not saying that I should be entitled to anything, but it does rile me that if I earned $149999 and my partner $1 million I could claim full PPL payments.

Anyway to the actual problem, namely that as a family we will have zero income other than about $200 a fortnight family tax benefit between December and whenever I return to work around April or May. Savings have been run down considerably over the last year due to replacing one car, both bathrooms in the house and general repairs and maintenance.

Has anyone been in a similar situation and able to advise what may be available to us other than FTB for that 5 months, or should we just suck it up and get used to home brand for everything?

Financial

Comments

  • robbyjones on 21/06/2014 - 22:20

    I think you may have picked the wrong forum for this post. Good luck with your new baby.

  • Typical16-bitEnjoyer on 21/06/2014 - 22:54

    I think you need to go to http://www.essentialbaby.com.au/forums/ and not ozbargain…

    Speak to an accountant. If you're self employed earning 150k hopefully you use one. Good luck.

  • tinx on 22/06/2014 - 00:00

    how about parenting payment ?

  • endotherm on 22/06/2014 - 00:06

    No tax deductions? The $150k is an adjusted taxable income figure.

    Adjusted taxable income for family assistance purposes is the sum of:

    • taxable income
    • reportable fringe benefits
    • reportable superannuation contributions
    • total net investment losses
    • tax free pensions and benefits
    • foreign income
    • tax exempt foreign income
    • less any child support you pay

    If you can reduce your taxable income by a few grand I'd think you would qualify. Although I thought I read somewhere the figure was going to be $100k.

  • Geewhizz on 22/06/2014 - 07:25
    +2

    Call Centrelink and ask to speak to the Financial Information Services Officer. Given that the end of the financial year is just days away I wouldn't be putting this off.

  • dp1 on 22/06/2014 - 11:32
    +1

    I will get on to centrelink on Monday. I have been going through my finances and the figures will be approximately $133k adjusted income but centrelink will add my $25k Super contributions to this (again, in hindsight I should have suspended contributions this year despite the tax effectiveness) . I don't have investment properties, equipment financing or any complex Trust structures etc, tax returns are very straightforward as a sole trader so I ditched the accountant a few years ago when they kept making mistakes and I realised I got better deductions by understanding the rules in depth myself.
    I might try essential baby forums if I can get past the sentimental fluffiness of it. Thanks for the comments so far.

  • mskeggs on 22/06/2014 - 12:22

    Ithere is still time to make tax deductions. Charity if nothing else.

    • endotherm on 22/06/2014 - 16:49
      +1

      Good idea, just give away $4000 in donations. I'll give you my BSB number :)

  • Bystander on 22/06/2014 - 19:38
    +1

    A "good" financial adviser/planner should be able to point you in the right direction regarding tax deductible investments. It used to be popular at this time of year for people to invest in things like movie production, olive farms, alpacas and other assorted high risk businesses. Things would have changed but surely they can help you defer $4k of income.

  • Kevan2 on 23/06/2014 - 11:32

    Some good things mentioned here in these posts. ====++++ Financial Planner / Adviser , Accountant, Super to whom, Split income below threshold , dost of mail, phone services and so on, Allowable tax deductions , depreciation, car costs prepayment of work related expenses. Lawer with the above 2 for right structure. Also do not overlook Income Protection and Spouse income protection deductable hard to get but thats why you talk to a CFP and also CPA equivalent.

    But get advice from the above before Centrelink has been advised of real figures, if seeing first you are not sure of actual $s spent.

    Good luck with bub.

  • modsec802 on 23/06/2014 - 12:07

    Consider that a stay at home mum with a husband who earns much less than $150k is eligible for nothing as she doesn't meet the work test.
    Can your partner find some work considering you'll both be at home not working for a number of months?
    Else as other stated if government PPL is going to make or break your finances it might be worth just donating $4k to charity this week.

  • dp1 on 23/06/2014 - 13:17

    Husband has been out of the workforce for 6 years and only previously worked overseas never in Australia. It is not really fair to a prospective employer for him to take a job with the intention of leaving it in 5 months time, and without any experience he would be lucky to earn the same as PPL. He has never had a super account so I doubt it can be set up and accept a contribution within a week.
    The prepayment of next year's expenses is a good suggestion, might ring round and see if it's possible.

    • Kevan2 on 23/06/2014 - 22:23

      Walk into any Bank and most will have a 'no fee' base level super , almost over counter service.

      as the word - dost , sorry not new word as I am not a Shakespeare person making up new words, and , even though it 'dost' was poor typing and proof reading [I owned up, but may have already seen the word - damn those Sword and Sorcery books =] dost is an archaic second person singular present of do.

  • MITM on 23/06/2014 - 23:00

    Have you factored your new car depreciation for year 1 - it would be large. Or % of purchase price if it works out better.

    Pre-pay something from next years business expenses such as income protection insurance or business insurance, buy/stockpile tyres, pre-pay a lease.
    Buy a new computer and laptop. $1000 items (may be more) receive 100% deductibility.
    Pre-pay interest on a business loan/credit card. You must have a large business expense you could bring forward to this year - the bonus being you won't have to pay it next year.

  • dp1 on 24/06/2014 - 16:19

    Thanks for all your help so far
    I sat down properly yesterday with the spreadsheets and it appears I am $14K over the threshold- nothing to show for it so god only knows where it has gone! Black hole of being a parent I suppose.
    I think there is no point in spending $14k to gain $11K so we are in for a few months of belt tightening next year.
    Parenting payment at $460/fortnight for hubby is definitely an option as we have no assets other than mortgage redraw funds (which are exempt from the assets test).

    MITM- my finances are far too simple for your suggestions, excellent as they are. My car is 6 years old, 24K on the clock hence no way to pretend I do 5K business miles a year, so can't depreciate it as a business asset (and it's only worth about $8k anyway). I also have had only 1 fixed workplace as of Jan 2013.
    I think I might have gone well over my new computer allowance for the assets pool (they are supposed to have a life of ?4 years I think before being allowed a replacement, the desktop may just be approaching that but the rest are newer).
    I work as a contractor to the business owners and my expenses (=their cut) are a fixed % of turnover- hence no turnover = no expenses while I am not physically at work. I suppose could have a guess at what my expenses for Jul-Nov 2014 plus May-Jun 2015 might be, but over the last 6 years my income has varied from $79k to $221k for the same job.
    I would have no need of a business loan as my qualifications and experience are my only assets ;). I don't own business premises or use any expensive equipment as such, the arrangement with the business owners is that consumables if any are supplied by them are covered by their % cut of turnover.
    I could pre-pay an insurance payment at $4700, but that is about all.

    EDIT- I see the comment about replacing the car was confusing- it was his money-sink German car that was replaced for a sensible Toyota, not my trusty Ford wagon.

  • [Deactivated] on 25/06/2014 - 15:54

    Wasn't the income cap reduced to $100K recently by Tony Abbott?

  • dp1 on 25/06/2014 - 18:03

    The cap for the proposed new PPL rules (if they are passed by the Senate), is full replacement of income and super to a maximum of $50k over 6 months, equivalent to a $100k annual income pro rata. I believe that there will be no income test however and any woman can claim the payment but none will receive more than $50k. If this baby had waited another 7 months I would be vastly better off.

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