Did you know that First Home buyers can use up to $30k of their super to put towards their deposit?  I didn’t either!  When I heard about this last week, I decided to do some research into it!

First things first – why is this of any interest?  Well because it is becoming increasingly difficult ,with the average spend on a home increasing, it is becoming so hard for our First Home buyers to get their first home.. Well maybe this will help?

The Australian Government introduced, with the new budget in 2017,  First Home buyers  access to super of up to $30k.  In 2018 First Home buyers accounted for 18.1% of all housing acquisitions.  This is a big figure – the largest since October 2012.    Along with this we have also seen an increase of average housing loan.    As at June 2018 the average loan for a first home buyer was $349,800 which was a historic high -10.1% higher year-on-year. By comparison, the average loan size for a non-first home buyer owner occupier was a higher $406,900 but up by a lower 5.5% over the past year.

So what is this Government scheme?  .. This extract taken from ATO website explains it quite well – First Home Buyers Saving Scheme:
From 1 July 2017, you can make voluntary concessional (before-tax) and non-concessional (after-tax) contributions into your super fund to save for your first home.

From 1 July 2018, you can then apply to release your voluntary contributions, along with associated earnings, to help you purchase your first home. You must meet the eligibility requirements to apply for the release of these amounts.

You can use this scheme if you are a first home buyer and both of the following apply:

• You either live in the premises you are buying, or intend to as soon as practicable.
• You intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.

You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. You will also receive an amount of earnings that relate to those contributions.

Three key things to remember are:

• You can only apply for release once.
• Don’t sign your contract to purchase or construct your home until after we have released your money or you may be liable to pay FHSS tax.
• After we have approved the release, it will take about 25 business days for you to receive your money.

to see more about the FHSS go to :

https://www.ato.gov.au/Individuals/Super/Super-housing-measures/First-Home-Super-Saver-Scheme/

This Scheme wont suit everyone, however it is another option to help our First Home buyers access some money that we all know can be really hard to save (especially when you are already renting!)  Of course, should you want to discuss further with a professional  Sokudo Finance are more than happy to assist and we can also refer you to one of our trusted advisors for more information.

• Dementia is the second leading cause of death of Australians contributing to 5.4% of all deaths in males and 10.6% of all deaths in females each year^[1]
• In 2018, there is an estimated 425,416 Australians living with dementia
• Without a medical breakthrough, the number of people with dementia is expected to increase to 536,164 by 2025 and almost 1,100,890 by 2056
• Currently an estimated 250 people are joining the population with dementia each day. The number of new cases of dementia will increase to 318 people per day by 2025 and more than 650 people by 2056^[2]
• Three in 10 people over the age of 85 and almost one in 10 people over 65 have dementia^[2]
• In 2018, there is an estimated 26,443 people with younger onset dementia, expected to rise to 29,375 people by 2025 and 42,252 people by 2056

Frightening isn’t it? 

If there are 10 people in the room you are in now…  if you live to the age of 85 chances are 3 of you will get it….

With the statistics on the rise Dementia will probably have touched all of us at some point in our life.  What can I do to help?  What is our social responsibility?

Having been in banking over the past 20 years, I have a really good understanding of the systems and processes.   I don’t think we have possibly done enough to understand what the responsibility is from the banking industry when a person is diagnosed with Dementia.

When you are diagnosed with Dementia – you are required by law to let the roads authority know that you have Dementia – they test your cognitive ability and make you resit your driving test every 12 months.  Ensuring – you can still drive your car and you are safe on the road.   What do we do with your finances when you are diagnosed?  Does anyone tell the finance industry?  Do we still lend money to someone who has been diagnosed with Dementia?  do you still allow them to “drive” their own bank account?  What happens if they cant remember their name, where they live, how old they are, their PIN?  What if they forget to pay their mortgage?  What if they forget to pay their credit card?  All because they have forgotten to collect their mail that sits in their mail box?

Recently I was on the other end of this story.  I was doing whatever I could to help my family under some very difficult circumstances.  I wasn’t surprised, however very frustrated as I really needed to have a discussions with various organisations on my families behalf – however no one would talk to me.  Living in a different state – not much could be done.

So I ask – how many people are aware of what Dementia /Alzheimers is?

How many people in the service/ Finance industry would know how to help a person with Alzheimers?

What should be done to assist a person with Alzheimers and the family to make a very difficult time – just that little bit easier?

Do we need to formalise rules and protocols – for a person formally diagnosed, whilst still adhering to privacy rules?

Whist I pose these questions – I don’t pretend know all the answers – all I know it is something we really need to work on in the Banking industry (amongst others!)

If Dementia is left untreated in Australia this is what the impact could be:

(Dementia Australia)

• In 2018, dementia is estimated to cost Australia more than $15 billion. By 2025, the total cost of dementia is predicted to increase to more than $18.7 billion in today’s dollars, and by 2056, to more than $36.8 billion^[2]
• Dementia is the single greatest cause of disability in older Australians (aged 65 years or older) and the third leading cause of disability burden overall^[3]
• People with dementia account for 52% of all residents in residential aged care facilities^[2]
  

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So how do we help protect ourselves and our loved ones?

ASIC’s MoneySmart have some good things we can do ourselves to help safeguard our future.

In a Nutshell, you should upon diagnosis look to:

1.  Simplify your Finances
2. Appoint an Enduring Power of Attorney
3. Appoint a Medical Power of Attorney – in some states a separate one is needed
4. Update your will
5. Sort out your Super

Last couple of points from me:

Talk to your Bank, your service providers – any one you pay regally- you should tell them that you have a diagnosis.  You should also appoint someone that can talk to your bank or your service providers on your behalf.

You might be managing and ok today – however the situation can change rapidly with Dementia- things may be different in 10 months or 10 years, so think about what you can do today to make things easier for if and when it is needed.

Talk to your family – just because you have a diagnosis it doesn’t mean they wont love you anymore!  We need to do more to rid ourselves of the stigma typically associated with Dementia and Alzheimer’s.  So lets talk!

I often hear things like – no point they don’t remember me or no point in talking because they wont remember anyway… Well the point is – everyone – no matter who they are or what they can remember enjoys the moment.  Live for what we have today and what we can enjoy now, because who knows, tomorrow, we may not remember the day before!

#dementia #moneysmart #Alzheimers #letstalkdementia #responsiblelending #Socialresponsibilitybanking

(ASIC MONEYSMART)

Most of us will have some memory loss as we age. However, for some people, significant memory loss, arising from illnesses such as dementia, can be a problem. When it gets to the point where you are struggling to manage your finances it’s important to put some safeguards in place.
Here we explain how to set up your finances so they can continue to be managed responsibly if you can no longer do this yourself.

How memory loss can affect your finances
Memory loss can make it difficult to stay in control of your money. Things you found easy before – like tracking your spending, checking your bank statements or investments, or even paying your bills – may become challenging or you may just not remember you need to do them.
You may also find it hard to take in and absorb information from banking staff or your financial adviser or accountant.
All these factors mean you may not be making the best financial decisions or be able to keep up with the regular maintenance of your money.

Vivian was in her eighties when her son Alan noticed she had become increasingly forgetful.  At first she would just lose her train of thought during a conversation but, after a few months, Vivian also had difficulty finding the words she wanted to say.  Alan then found some overdue electricity bills on her kitchen table. When he asked her about them, she said she had forgotten they were there.

Alan helped Vivian pay her overdue bills and then took her to see her doctor to get her health assessed. He also helped her consolidate her bank accounts and set up a list of her regular bills so she would not forget to pay them.

To help recognise the signs of dementia, visit Is it dementia, a resource created by Alzheimer’s Australia.

Planning for the future is important for everyone, but this is especially true as you age.

Although it can be confronting to think about what you want to happen when you can no longer make decisions for yourself, putting a plan in place is the best way to ensure your wishes are carried out.  It also relieves your loved ones of the stress of having to make these decisions for you.

Here are some steps you can take to protect your money:

To help you stay in control of your money as you age, and make it easier for your loved ones to help you, here are some ways you can simplify your finances:

• Consolidate your transaction accounts into one.
• Reduce the number of credit cards and store cards you have.
• Close your cheque account.
• If you have super in more than one account, consolidate them into a single account.
• Put a list on your fridge of what your regular bills are and when they come in (e.g. phone monthly, electricity quarterly, rates annually).
• Put a ‘tick’ beside each bill once you’ve paid it.
• Put unpaid bills on the fridge and take them down when they have been paid.
• Consider whether you would like to set up direct debits to pay some of your bills.

An enduring power of attorney allows you to choose a person to manage your affairs if you lose the ability to make these decisions for yourself.  If you do not have these plans in place then a court or tribunal may need to appoint someone to take care of this for you.

Who to choose?

It is important to choose someone you trust as your enduring power of attorney. They will be responsible for looking after your bank account, paying your bills, and even selling your house if you need to move into an aged care facility. You need to feel confident they will act in your best interests.

This person could be your spouse, child, another relative or friend.  Alternatively, it could be an independent person, such as the Public Trustee, or your solicitor.  Some people prefer to appoint two people to be their enduring powers of attorney. If you do this, you need to be confident that they will generally agree on what is in your best interests.

Whether you choose one person or two people for this role, it is important they understand the responsibilities and legal obligations of an enduring power of attorney.

No matter who you appoint, you should discuss your decision with your family so everyone knows and understands your wishes.  This will help avoid disputes later on.

In some states, you may need to set up separate arrangements to nominate someone to make medical decisions on your behalf.  Advance Care Planning Australia has more information about this.

Review your will to make sure it is up to date.  If you don’t already have a will, now is the time to create one.

To make a valid will, you need to be able to understand the decisions you make about your assets and the effect these decisions will have, so it is better to make or update your will before being diagnosed with dementia. Our article on wills and power of attorney has more information.

A diagnosis of dementia does not automatically mean you have lost capacity to make these decisions for yourself.  However, if you are concerned about memory loss, or someone close to you has been diagnosed with dementia or another form of memory impairment, it is important to acknowledge the issue and obtain legal advice, or consult the Public Trustee, to help you create or update your will.

Here are details for the Public Trustee in each state.

• ACT – Public Trustee and Guardian for the ACT
• NSW – NSW Trustee and Guardian
• NT – Office of the Public Trustee
• QLD – The Public Trustee of Queensland
• SA – Public Trustee South Australia
• TAS – Public Trustee Tasmania
• VIC – State Trustees Victoria
• WA – Public Trustee Western Australia

It is a good idea to give a copy of your will to your beneficiaries.  This is especially useful if you only have one beneficiary, in case you misplace your copy of the will.

Unlike your other assets, your super account does not automatically form part of your estate.  This means you cannot nominate the beneficiaries of your superannuation through your will.

To ensure your super fund goes to the people you choose when you die, you need to make a binding death benefit nomination (sometimes called a binding beneficiary nomination) through your super fund.

Alternatively, you could nominate your estate as the beneficiary of your super fund.  Doing this will ensure your super benefits will be distributed according to the terms of your will.

Visit our super death benefits page for more information.

Reconsider your self-managed super fund (SMSF)

Running your own super fund can be very complex, and there can be very serious financial consequences if you can no longer manage it properly.

If you are diagnosed with dementia or you suspect memory impairment, consider changing your super arrangements.  You could transfer your super assets to a managed fund. Alternatively, you could nominate someone you trust, and who has the right skills, to take over your trustee role as your legal personal representative.

For more information, visit our page on getting out of an SMSF.

For your own peace of mind, and to make things easier for your power of attorney, it is a great idea to set up a file of your personal and financial information.  You could also keep a duplicate file containing copies of these documents in a safe location (such as a safe deposit box with your bank, or with your solicitor). Create a list setting out where these files are located.

The key documents you should include in this file are:

• Birth certificate
• Marriage certificate
• Will
• Enduring power of attorney or guardian details
• Personal insurance policies
• Tax File Number
• Centrelink/DVA Client Reference Numbers
• A list of all of your assets

• House deeds
• Home and contents insurance
• Deeds and insurance policies for any other real estate you own

• Bank account details
• List of any direct debits
• Mortgage documents
• Superannuation papers
• Documents related to any loans you may have
• Investment documents (securities, share certificates, bonds)
• Any pre-payments of funeral investments or plans

• Advance healthcare directive (also called a living will)
• Medicare card number
• Medical insurance details
• Details of your My Health Record
• Pensioner concession card

If you suffer memory loss, you have to rely more heavily on the people around you and trust them to take care of you.  Unfortunately, this can leave you vulnerable to people who might wish to take advantage of that trust.

Your family and friends might have their own opinions about who should be in control of your money or property, but it is important that they do not pressure you or try to influence your decision.  This is financial abuse.

Elder abuse is one of the most common forms of financial abuse, and people with dementia are higher risk of this happening to them.

See our financial abuse webpage for the signs to watch out for and where you can get help.

Our elder care and seniors support page has the contact details of a range of national and state-based organisations that can provide advice, support and assistance for you. The start2talk website also has a lot of useful information and resources for each state and territory about planning ahead for your future.

Article by Liz Wiggill 31July2018