Australia Government Contributions

Its tax time now as it is end of financial year in Australia. New rules always announced on 1st July as this is the first day of new financial year. To low income family it is always good news because any implemented rules always a good contribution to low income family.

Basically to low income family if you over paid your tax you will always get refunded. This year government has changed to childcare benefit rebate 30%. Family who eligible to receive child care benefit will still get a further 30% rebate on the childcare fees that you paid out of your own pocket. This was not a cash refund, this 30% rebate childcare fee was only paid through tax system which will only lower your tax to be paid. But from 1/7/2007, this has changed which brings us good news, this 30% rebate will no longer done through tax system, government will now refund 30% cash right into our bank account if we are receving childcare benefit, and have a child in a approved childcare and have lodged our tax return. This means if your childcare fees is $350 per week, and if you are eligible to receive childcare benefits from government, then out of your pocket you actually pay $200 to childcare and government pays $150 directly to childcare. Then at the end of financial year when you do your tax, you will get further 30% refund of the total fees you paid out of your pocket.

Another new contribution from government is, our superannuation ( in malaysia we called EPF). if your income is not more than $59,800 per year, on top of the super that your employer pays to your superfund, if you contribute some on your own to your super fund, said one year you contribute $1,000 out of your pocket or from salary sacrifice, then government will co-contribute another $1,000 to your super fund which double up your total contribution. $1,000 a year just as little as $20 per week. Not a big deal to contribute that little fund into your own super fund that will give you a big big different of funds to receive when you are retiring. I have calculated from my husband's super, he is contributing $20 to $25 per week to his super, at his retirement, he will have about $400,000++. If he does not contribute, he will gets only about $280,000 at retirement at today dollars. With now government

co-contribution to our super, it makes even more. Therefore I really encourage people just simply contribute abit because it makes different to your retirement. It is a very good investment for my future life.