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On 1 July 2014, superannuation fund payments will be made electronically using the new SuperStream system. According to the Australian Taxation Office, the new system has been introduced to assist employers in making their contributions in a more efficient, timely and consistent manner into a member’s account. SuperStream simplifies the process by which funds are deposited by providing the common standards that are lacking under the current system.

Members will be required to ensure that their SMSF bank accounts are set up to receive electronic payments and messages containing information about contribution payments. One projected benefit is that record-keeping will be improved for the purposes of taxes and auditing.

On the deadline date, all employers with twenty employees or more will be required to send all payments and contribution data through SuperStream. Smaller businesses, with 19 or less employees, will have an extra year (until 1 July 2015) to become compliant with SuperStream.

Employees of small businesses will be required to update their information with their employers by 31 May 2014. This includes the Australian Business Number (ABN) of their SMSF, the bank account in which their SMSF receives contribution payments and an electronic service address where receipt of contribution messages can be received.

With vacancies on a slight rise and rents plateauing in most areas around Perth, many property investors are focusing on finding properties that they can improve to create more revenue from rent.

Using your Property to Increase Revenue

Those who invest in rental properties are investing not only in property, but in lifestyles. People have different expectations when they rent properties. Some want to be in the inner ring of suburbs where they are close to more amenities and to the CBD. Many are willing to pay higher rents for homes that are fit and furnished to a higher quality.

For example, a dishwasher, security and air conditioning are seen by many renters as essentials on the middle to upper end of the rental market. A split reverse cycle air conditioner allows tenants to both heat and cool their property, depending upon need. These three improvements alone can increase rent by as much as $40 per week and decrease vacancy time due to increased demand.

Outside appearance is another factor in the allure of a rental property. A well-maintained garden can make a big difference in rental and vacancy. Many landlords are contracting gardeners to keep their grounds attractive and building the expense into the rent.

According to the recent Household Financial Wellbeing Index by banking giant ING, two out of every three households report that they don’t have enough funds to live comfortably between paydays.

One out of three of those households charges necessities on credit cards between paydays, while nearly half estimate that they would still need to take home another $300 per week to live comfortably. However, nearly four out of five respondents said that they would rather save a raise of 5% than spend it.

The ING Household Financial Wellbeing Index is released quarterly and ranks levels of wellbeing using six different indicators, including mortgage debt, credit card debt, household income, investments, savings and ability to pay their bills.

According to the index, only 9% report being satisfied with their present take-home pay. And among those who reported themselves as being cash strapped between paydays, 15% reported that they are chronically strapped for cash. 35% of those who feel they are often cash strapped reported using money from their savings to catch up on household expenses during shortfalls, while 31% reported using credit cards to get them through to the next payday. One out of ten report having borrowed from their family.

Many Australians purchase income protection insurance and think they are fully covered, only to find out that their policy only provided partial protection and that they don’t have enough to cover all of their expenses. While it’s great to compare policies, a lot of people look for the wrong things and end up making bad choices.

Here are some pitfalls of comparing insurance protection quotes.

Limited Payment Periods

If one is permanently disabled and can no longer produce income, they would expect to be paid for the rest of their lives. However, many policies cap payments to periods of one or two years. We won’t recommend any particular length here, but be sure that you know exactly how long you will be paid in the event that something terrible does happen to you and you can no longer work.

Note that payment is often capped depending upon occupation.

All Australians are currently required to have a superannuation policy. Many of those compulsory policies include death and disability cover, but some don’t. You may, however, purchase death and disability insurance through your super fund if you don’t have it yet.

When Can You Collect?

Nobody likes to think of death or disability, but they are events that happen to someone every day. Many find it comforting to know that they are prepared that if they are disabled and can’t work, they will have enough money to live on for the rest of their lives. Obviously, death is easy to prove. But when is one considered disabled?

Disability standards can differ from state to state or insurance company to insurance company, but there are some typical standards and tests that are a good guideline of what to expect if you do become unable to work.

One of the basic tests for collecting disability insurance is whether or not you can earn income through your own physical efforts for any occupation in which you are reasonably qualified to participate due to experience, training or education. Another way of expressing this is whether or not you are able to make two thirds of your present income through physical exertion.

Trauma cover is a relatively new product in the insurance industry. One of its more endearing qualities for many is that it provides a lump sum payment that can help those who suffer traumatic illnesses pay expenses if they are unable to work. But many ask whether it is necessary if they already have income protection cover.

Everyone’s financial situation is different and we always recommend contacting a professional financial planner or insurance provider. In the meantime, here is some information about trauma cover compared to income protection.

What is Trauma Cover?

Trauma cover is a form of insurance that provides a lump sum payment to those who sustain one of the illnesses that are on their coverage list. Usually, somewhere around 35 different illnesses are included in the coverage. The insurance is paid upon proof of being diagnosed with an illness on the list of covered conditions.

The main reason that most decide to take out trauma cover is to take care of expenses that health insurance doesn’t cover, such as rehabilitation, carers, treatments not included in health cover and loss of income.

In response to the many questions we routinely field about trauma cover, we would like to provide some of the basic facts.

What is It?

Trauma cover provides you with a lump sum payment if you sustain an injury or illness that is specifically covered in your policy. After suffering a traumatic illness or injury, the money can help you take care of the immediate adjustments you may have to make to your lifestyle as a result of trauma.

Why Would You Need It?

Nobody plans on having a traumatic event such as a severe injury or illness, but the sad reality is that a severe injury or illness can happen to anyone at anytime. If you decide that it’s appropriate to make plans to protect yourself from the financial consequences of such an event, trauma cover can provide you with the assurance that if something does happen, you will have resources to help with your financial well-being while you recover.

Doesn’t My Private Health Insurance Cover Trauma?

Your health insurance usually covers medical treatments, hospital stays and any extras you pay. However, when traumatic events occur, there are often expenses that aren’t covered by your health insurance. For example, you may need rehabilitation equipment or certain kinds of specialised therapies that aren’t included in your health insurance.

Many Australians think that they can find a mortgage with the best rates and terms for their situation by going to their bank or preferred lender. On occasion, your lender will actually have the best mortgage for your situation. But the odds are that they won’t.

Look at the situation mathematically. If a mortgage broker has access to more than twenty different lenders and you are seeing one lender, who is most likely to find the terms and rates that are best for you?

Why You Should Choose Your Mortgage Broker Carefully

Finding the right mortgage isn’t easy. Lenders often vacillate between strict guidelines and borrower-friendly standards. Some lenders use tactics that can not only cost you money, but can compromise your standard of living and affect your ability to obtain future loans.

Some mortgage brokers do things the right way. They know their market like the back of their hands and do their due diligence in the beginning with their clients, obtaining exactly the information they need to figure out which lenders will be appropriate for any given client. Then, they will apply only to those lenders.

30 June is a date with which financial planners and their clients are equally familiar: the date on which paperwork must be filed with the Australian Tax Office (ATO). For the financial planner, this date produces two main challenges: keeping their clients’ affairs in order while constantly monitoring the government for any last-minute changes to rules or regulations that may be relevant to their clients.

In recent years, the industry trend has been to be much better prepared by 30 June, but the proximity of “Budget Night,” when the Government announces the budget for the next twelve months and 30 June can still present a busy six weeks or so for financial planners and taxpayers alike.

This year, the budget was announced on 13 May, leaving 47 days until the 30 June deadline to make any adjustments caused by changes in the budget. However, well-prepared financial planners stay on top of projected changes and see the timeframe as long enough to be prepared but short enough to discourage procrastination.

Retirement is a lot tougher than it once was. Gone are the days when a family could pay off the family home, put away some savings and maybe a small investment or two and live happily ever after. In this era, it takes careful planning to have enough money to retire. At this point, we like to see people in their 20’s start planning for their futures.

If you want a comfortable retirement, you need to start early. You should also avoid these crucial mistakes.

Failure to Plan

As the old adage goes, “If you fail to plan, you plan to fail.” The fourth edition of The ANZ Survey of Financial Literacy in Australia, which was conducted in 2011 and is their most recent, showed that among adult Australians, only 37% had come up with an estimate of how much money they would need for retirement. A good plan should include what risk you deem acceptable, which investment vehicles you want to use, how much you have to invest, your preferred cash flow and what insurance you need to protect your investments.

Failure to Formulate a Budget

You should formulate a budget and stick to it if you want to have investment success. A budget accomplishes two things; it lets you know where your money is going and earmarks a set amount for your future.