Friday, May 18, 2012

bad finance karma

The money story goes on and it becomes apparent, that I don't have a good touch with this topic at the moment. Our payroll people calculated my new net pay as it most likely will be after the LAFHA tax changes come into effect in July. It’s devastating! My net pay will decrease by 1k AU$ per month! That is A LOT! And still there is no final official statement about the whole process, so nobody who will be affected can actually make any sophisticated arrangements - 1.5 month before it all gets started! And it does not seem as if paying the full tax rate would come with getting the same benefits as the general full tax rate person.
But that's not the only bad news! When I signed my contract I was told, that I have to join a superannuation fund. That's in principle not so bad - but I was wondering what happens to this money, when I leave Australia for good. So I asked this question and was told, that I'll just get the money back. Sounded good, so parts of my salary are just parked somewhere, where it might even grow a bit (which it actually doesn't - that's part three of the bad karma story) and when I leave the country, I just get it back. This is correct in principle, just that the lady I asked forgot to tell me about this tiny tiny extra bit of information, that BEFORE the money is transferred back to me, it will be taxed with at least 35%. this is much higher than my current tax rate!
So, this is all very slow and bad information politics and I feel quite ripped off! And I'm still in a good position, as I don't have any big financial burdens. What is with the people who have kids, a sick family member, have to pay a credit back... and they planned with the net pay as it is right now? Can we please be informed about such harsh cuts so much beforehand, that we have the chance to adjust our lifes to it, dear Government?


  1. Depending on whether you want/ need the superannuation money, you may be able to collect it at retirement time (at which point, it should have hopefully grown quite a bit). They should be able to send you the money owed to you at where ever you are, and it should be taxed at a much lower rate since it is meant as a retirement savings fund. It doesn't help you now, but may be worth looking into.

  2. In principle I could leave the money in Australia after my employment here. But as soon as my employment ends, the money has to be moved out of the superannuation fund. If I wanted to avoid the direct tax it would mean that the money just gets stored at the tax authority. And there it doesn't yield interest. So unfortunately that's not a "profitable" option as well.