Understanding insurance: Protect what’s most important to you

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Should something ever happen to you, personal insurance is there to provide financial security for you and your family. Find out about the insurance options available and some of the things you should think about when it comes to protecting what’s most important to you.

Choosing the right insurance

Choosing the right type and the right amount of insurance is a good way to make sure that if anything were to happen, you and your loved ones would be looked after financially. There are four types of personal insurance every Australian should understand. These include:

  • income protection
  • total and permanent disablement (TPD)
  • trauma cover
  • life insurance.

Learn more about choosing the right insurance

Insurance and super

Income protection, TPD and life insurance are available through most super funds.

And if you’re making super contributions through your employer’s default super fund, it’s likely your employer will have negotiated some cover for you.

While you may already have some insurance through your super fund, you need to make sure the type and amount of that insurance is suitable for your circumstances.

Learn more about insurance through your super

We’re here for you

In 2018, AMP paid $1.212 billion in claims across its trauma, life, terminal illness, total and permanent disablement, and income protection insurance plans. We have a proactive, fair and transparent approach to assessing claims and we’ll be there for you every step of the way if you need to make a claim.

See a sample of our claims amounts and the age groups of the people we paid claims to in 2018.

What kind of money parent are you?

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Many parents approach the topic of money differently, but could your way of doing things influence your kids’ success?

The majority of Aussie mums and dads recognise that they’re accountable when it comes to shaping their children’s perspective around money matters.

A recent report published by the Financial Planning Association of Australia (FPA), revealed parents listed themselves (95%), followed by grandparents (63%) and teachers or coaches (59%) as the top three biggest influencers when it came to instilling money values in their kids1.

What money conversations are parents having?

As part of the research, parents said they mainly concentrated on day-to-day issues when talking money with their children, admitting that more contemporary issues, such as making transactions digitally, were sometimes overlooked2.

What parents said they discussed3:

  • 52% – how to spend and save
  • 43% – how to earn money
  • 32% – how household budgeting works
  • 24% – how much people earn
  • 19% – making online purchases
  • 13% – in-game app purchases
  • 5% – buy now, pay later services, such as Afterpay.

What approach do you take with your kids?

The research undertaken indicated that there were four prominent personalities parents assumed when discussing money with their children, with some parents initiating conversations more frequently, while others were sometimes a little more hesitant4.

The four distinct personalities that came out of the research included5:

The engaging parent

Common traits:

  • You have the most conversations around money with your kids and feel comfortable doing so
  • You tend to have a higher household income
  • You’re more likely to use money to encourage good behaviour in your children
  • Due to high engagement, your kids are often more financially prepared than other kids
  • Your kids have a greater interest in learning about all types of money matters.

The side-stepping parent

Common traits:

  • You are less comfortable talking to your kids about money so have fewer conversations
  • You may have less money coming in as a household
  • You’re less transparent about what you earn and money matters in general
  • You tend to provide the least amount of pocket money and as a result your children may be less interested in learning about money and how to make transactions.

The relaxed parent

Common traits:

  • You’re comfortable talking to your kids about money but don’t do so too often
  • You take a relaxed approach to money matters and are transparent about money issues
  • There is little financial stress in your home
  • Your relaxed nature may lead to your children missing out on opportunities to learn about money, which means your kids may need to explore money matters on their own.

The do-it-anyway parent

Common traits:

  • You’re not always comfortable talking about money but still have frequent conversations
  • You’re mainly concerned your child will worry about money if you talk about it
  • Despite your discomfort, your perseverance generally pays off
  • Your teenage children are more likely to have a job than the average child.

What approach is best according to the research?

Engaging parents were more likely to report that their children were more curious, confident, and financially literate than they were at their age6.

According to parents who fell into this category, their children were the most equipped to understand and transact in today’s digital world and their teenagers were the most likely to have a job and make online purchases for themselves or their family7.

In addition, the research found children with a paid job outside of the family home were more financially prepared to engage with money8.

They were also used to transacting digitally and showed greater interest in learning about paying taxes and superannuation than those who didn’t have a job9.

2019-20 Federal Budget roundup

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Grow My Wealth | 03 April 2019

Find out how the measures announced in the 2019-20 Federal Budget could affect you

Federal Treasurer Josh Frydenberg has handed down the Morrison Government’s first Federal Budget. Among the proposed changes were personal income tax cuts and changes to super rules.

Read on for a round-up of the proposals put forward and a look at how they might affect your household expenses and financial future, whatever your stage of life.

Remember, at the moment these are just proposals and could change as legislation passes through parliament.

Tax

Personal income tax cuts

The government is proposing to expand the personal income tax cuts that have been legislated from the 2018-19 budget. These tax cuts will particularly benefit low-to-middle income earners.

The indicative tax cuts in 2018-19, compared to 2017-18, are as follows.

Reduction in tax paid – individuals

Taxable income Tax reduction
$30,000 $244
$50,000 $1,080
$80,000 $1,080
$90,000 $1,215
$120,000 $315
$130,000 $135

These cuts will be achieved through a combination of changes to tax offsets, adjustments to personal income tax brackets and marginal rates.

Changing tax thresholds and marginal tax rates

  • From 1 July 2022, the top threshold for the 19% marginal tax bracket is proposed to increase to $45,000.
  • From 1 July 2024, the government proposes to reduce the current 32.5% marginal tax rate to 30%.

Increasing the Low and Middle Income Tax Offset (LMITO)

  • For the 2018-19 to 2021-22 tax years, the LMITO will increase to provide tax relief of up to $1,080 per year to low and middle income earning Australians.

Increasing the Low Income Tax Offset (LITO)

  • From 1 July 2022, the LITO is proposed to increase to $700.

New proposed personal tax rates and thresholds

Marginal tax rate (%) Thresholds – income range from 1 July 2018 Thresholds – income range from 1 July 2022 Thresholds – MTR (%) and income range from 1 July 2024 ($)
0 0 – 18,200 0 – 18,200 0% 0 – 18,200
19 18,201 – 37,000 18,201 – 45,000 19% 18,201 – 45,000
32.5 37,001 – 90,000 45,001 – 120,000 30% 45,001 – 200,000
37 90,001 – 180,000 120,001 – 180,000 –
45 >180,000 >180,000 45% >200,000
LMITO Up to 1,080 – –
LITO Up to 445 Up to 700 Up to 700

Effective tax-free threshold 2018-19

LITO and LMITO (Individuals below Age Pension age) – $21,884

Increasing and expanding SME access to the instant asset write off

The instant asset write-off threshold is increasing from $25,000 to $30,000. The threshold applies on a per asset basis, so eligible businesses can instantly write off multiple assets.

Small businesses (aggregated annual turnover of less than $10 million) will be able to immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from budget night to 30 June 2020.

Medium sized businesses (aggregated annual turnover of $10 million or more but less than $50 million) will also be able to immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from budget night to 30 June 2020.

However, medium sized businesses must also acquire these assets after budget night to be eligible.

 

Super

The government has proposed a number of measures to make it easier for Australians aged between 65 and 67 to top up their super.

Super contribution work test to apply from age 67

Currently, people aged 65 to 74 must be in paid work for a minimum of 40 hours in any consecutive 30-day period in the financial year to make voluntary super contributions.

From 1 July 2020, this ‘work test’ will only be necessary where contributions are made by people aged 67 to 74.

This proposed change means that people aged 65 or 66 who don’t meet the work test because they, for example, only work one day a week, or do volunteer work, will be allowed to make voluntary concessional and non-concessional contributions to their super.

Age limit for ‘bringing forward’ non-concessional contributions increasing to 67

The government is proposing to extend the ‘bring-forward’ rules which allow Australians aged less than 65 at the start of the financial year to make up to three years’ worth of non-concessional contributions to their super in a single financial year.

From 1 July 2020, the bring-forward rules will be extended so they also apply to people aged 65 and 66 at the start of the financial year.

 

Age limit for spouse super contributions increasing to 74

Currently, Australians aged 70 years and over cannot receive contributions made by their spouse on their behalf. The government is proposing to increase the age limit for spouse super contributions from 69 to 74 years from 1 July 2020.

Spouse super contributions are counted towards the receiving spouse’s non-concessional contribution cap. It is expected that the receiving spouse will need to continue to meet the work test from the work test age (please see above).

 

Medicare levy changes

While the Medicare levy remains unchanged at 2% of taxable income, the thresholds for low-income singles, families, and seniors and pensioners will increase in the 2018-19 income year.

The threshold for singles will increase to $22,398. The family threshold will increase to $37,794 plus $3,471 for each dependent child or student.

For single seniors and pensioners, the threshold will increase to $35,418. The family threshold for seniors and pensioners will increase to $49,304 plus $3,471 for each dependent child or student.

Social security

Help with paying energy bills for Australians on income support

Individuals in receipt of a qualifying income support payment will receive a one-off Energy Assistance Payment of $75 for singles and $125 for couples (combined) to assist with energy bills.

Qualifying payments include the Age Pension, Disability Support Pension, Parenting Payment Single, Veterans’ Service Pension, Veterans’ Income Support Supplement, Veterans’ disability payments, War Widow Pension, and permanent impairment payments under the Military Rehabilitation and Compensation Act 2004.

 

Aged care

The government has allocated $320 million for a one-off increase to the basic care subsidy for aged care residents.

Also, 10,000 extra home care packages will be released over the next five years.

Want to learn more?

Remember, at this stage these are proposals which may change as they pass through Parliament.

If you’d like more information about the budget measures you can:

Your financial adviser can also help explain how the budget proposals might affect you. If you don’t have an adviser, we can help you find one.

Payment demanded by gift card? It’s a scam

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Gift cards are increasingly the payment method of choice for scammers. Scamwatch reports show more than $5 million was lost in 2018, a 38 per cent increase compared with 2017.

iTunes cards accounted for $3.1 million in losses — a 156 per cent increase from the $1.23 million reported in 2017. However Scamwatch has also seen an increase in reports involving other gift cards such as Google Play, Amazon, and Steam cards, and Australia Post Load & Go prepaid debit cards.

Losses to scams where non-iTunes gift cards were used as payment increased by 530 per cent in 2018 to around $1 million.

“Scammers like to get gift cards as payment as it’s easy for them to quickly sell them on secondary markets and pocket the cash,” ACCC Deputy Chair Delia Rickard said.

“It’s concerning that the scammers are now demanding payment in other forms of gift cards. This is likely in response to scam warnings about using iTunes cards for paying scammers that are in stores like supermarkets and on the cards themselves.”

“It’s clear the scammers are diversifying their payments to try get around these warnings, so it’s vital people are aware that no legitimate company or government agency will ever ask you to make a payment with any sort of gift card,” Ms Rickard said.

There are several common types of scams involving gift cards:

ATO impersonation scams

  • The scammer pretends to be from the Australian Taxation Office and claims there is a warrant for their victim’s arrest. The scammer asks the victim to pay an immediate ‘fine’ using gift cards or bitcoin, and claims police will come and arrest them if not.

Catch-a-hacker scam

  • The scammer calls and pretends to be from a law-enforcement agency or internet provider and convinces the victim they are trying to trace the location of a hacker who has compromised the victim’s computer. They claim they can do this by sending money from the victim’s bank account or via gift card serial numbers.

Victims are also tricked into giving up personal details with the promise of gift cards. Scammers entice victims to participate in surveys by promising gift cards as a prize, however the surveys extract personal information such as your name, date of birth, address details and even financial details like your credit card or bank numbers.

“If anyone asks for payment using a gift card, it is a scam, simple as that,” Ms Rickard said.

“If you paid a scammer with a gift card, report it as soon as possible. Call the company that issued the gift card and tell them the gift card was used in a scam. It’s very difficult to get your money back but the sooner you report it, the better your chances.”

Businesses that sell iTunes, Google Wallet and similar gift cards are encouraged to inform their staff about these scams so that they can help warn customers.

“If staff are informed they can identify the warning signs of a scam when they notice a customer spending large amounts of money on gift cards,” Ms Rickard said.

Further information is available online about where to get help. People can also follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts.