Hello,

Welcome to the term 2 edition of the MakingCents for parents newsletter. We hope you enjoy the read.

Gather up your school receipts. You may be able to claim the cost on tax.

If you have school-aged children, chances are you’re regularly bombarded with lists of must-haves from textbooks to laptops. It all adds up. But the good news is that you may be able to reduce the expense of many school-related costs through the education tax refund.

Eligibility limited to FTB-A recipients
To be eligible for the refund, parents need to be recipients of  Family Tax Benefit Part A (FTB-A). This an income support payment  funded by the federal government, that’s designed to help families meet the costs of raising children (for more information, take a look at www.familyasist.gov.au) If you receive  fortnightly FTB-A payments  you’re entitled to  claim a raft of education expenses on tax including laptops and home computers, printers, USB flash drives, home internet connections, educational software, textbooks and even stationery.

The education tax refund is limited to 50% of education spending, and age limits do apply. Parents can claim up to $750 for each child in primary school (to receive a refund of up to $375). Or for each child studying at high school, you can claim expenses worth up to $1,500, for a refund of $750.

If your expenses exceed your refund limit for the current year, any excess can go towards the following year’s refund claim, as long as you are still eligible.

Hold onto receipts
To claim the costs of education, it’s essential that you have the receipts to back-up any claim. With tax time approaching, it’s worth tracking down any dockets or invoices for school-related costs paid over the past financial year.  And be sure to hold onto receipts that relate to next financial year.

Unfortunately there are some expenses that cannot be claimed under the education tax refund. These include school fees and uniforms plus extracurricular activities like tutoring. 

For more information speak with your accountant or log onto www.educationtaxrefund.gov.au.

Your child’s toy collection could be worth over $2,000.

The bedrooms of Aussie kids are an Aladdin's Cave of toys and games, with fresh research showing our small fry can own toy collections worth around $2,079.

In years gone by, children received the bulk of new toys at Christmas or on birthdays. But these days 52 per cent of Australian parents buy toys for their children throughout the year – often using the purchase to reward good behavior or as a motivator to do well at school or in sport.

The same study found many parents will happily spend up to $289 on a single toy. West Australian parents dig deepest, shelling out $351 for just one toy, while NSW parents put more of a brake on spending at $248 per play item.

Tips to trim the cost
There’s no denying that toys play a vital role in childhood development. However there are ways to access quality toys at next to no cost.

For parents of preschoolers, your local play group offers a wide choice of toys plus craft activities for a pocket-friendly fee. Visit www.playgroupaustralia.com.au for details of a play group in your area.

Many public libraries offer free or low-cost enrichment activities for children including craft and storybook sessions and in some cases a toy library. For older kids, CDs and DVDs can be borrowed at no cost at all.

Rekindle interest – or just re-sell
Sometimes just cleaning out the toy cupboard can re-ignite interest in long-forgotten toys, books or games. Or try holding a garage sale for play things your child has outgrown. It’s an easy way for the kids to earn a bit of pocket money in return for decluttering their rooms.

Recent changes to super just made you $108,000 richer in retirement.

Like to have an extra $100,000 in retirement? That’s just what the federal government is offering by increasing the super contributions the boss makes on your behalf.

For many years employers have been making super contributions worth 9% of our base wage or salary. However the recent fine-tuning of super rules will see these contributions rise steadily to 12% between 2013 and 2020.

According to Chris Bowen, the Federal Minister responsible for superannuation, the increase in employer contributions means a worker currently aged 30 can expect to have an extra $108,000 in super by the time their working life is over.

Extra contributions still worthwhile.
It’s great news for younger Australians, but older workers won’t enjoy the full benefit of the rise. That makes it worth thinking about making extra super contributions of your own. And there is a range of ways to boost tomorrow’s nest egg while enjoying a few extra perks today.

If you make a super contribution out of your own pocket, the government may add a co-contribution to your nest egg if you earn less than  $61,920 annually. Or add a bit extra to your spouse or partner’s super fund, and if they are a low income earner, you could claim a tax offset worth up to $540.

If you’re serious about saving for retirement, talk to the boss about making additional contributions through ‘salary sacrifice’. This involves having part of your regular pay cheque paid into your super fund rather than receiving the money as cash in hand. It can trim the tax you pay on your income today while building a pool of savings for tomorrow.

Turn your small change into a small fortune!

A study by McCrindle Research estimates that collectively we have around half a billion dollars hanging around in loose change – in the car, under the couch or in jam jars around the house.

That sort of money would go a long way to meeting bills or simply funding a few extra treats for the family. But there are ways to make those wayward coins work even harder.

Let’s say you hunt around and find $20 in loose coins. Deposit the stash in an online savings account paying interest of 6% annually, add just $15 each week, and after ten years you’d have a tidy nest egg worth up to $10,700.

That definitely makes it worth gathering your coins – or getting the kids to have a coin hunt, and saving the loot in an interest bearing account.

Or put your small change to work to whittle away debt. Even small extra repayments can mean saving a bundle in long term interest charges.

For instance, on the average home loan of around $300,000 charging 7% interest, adding that same $15 in small change to your mortgage each week could cut up to $30,000 off your overall bill and leave you mortgage-free almost two years sooner. It’s a great incentive to start collecting those loose coins.