FY25 Bill Refresh: Two Expenses to Review Now
Jul 24, 2024
By Sophie Ryan, iSelect Comparison Expert
(This is a sponsored post by iSelect )
The start of a new financial year doesn’t typically spark the same kind of joy that ringing in a new calendar year does, but a bumper tax refund could be worth celebrating! Whether you’re already booked in with an accountant or tackling the task yourself, it’s time to organise that shoebox full of receipts and find out what’s in store for your FY24 tax return. OK, maybe your record keeping skills are far more superior than simply stashing your paperwork into an old shoebox throughout the year, but have you thought about overhauling your household bills too?
A new survey from comparison service iSelect found that almost half of Aussies (48 per cent) say the new financial year is prompting them to review common bills and expenses to make sure they’re getting a good deal. Read on as we explain why you should too and share some practical tips to make the most of your ‘bill refresh’.
Start with private health insurance ☂️⚕️
Yes, you did read that correctly. Not having private hospital cover can have tax implications, which is why July is a great time to get up to speed if you don’t know the difference between the Medicare Levy and the Medicare Levy Surcharge. Yes, they are different!
iSelect General Manager – Health, Andres Gutierrez explained that most taxpayers pay the Medicare Levy, while the surcharge is an extra amount on top of that.
“The Medicare Levy Surcharge is imposed on higher-income earners who don’t purchase and continue to hold an appropriate level of private hospital cover during the financial year,” he said.
“You may have to pay this extra tax if you’re earning over a certain amount annually. These income thresholds are set by the Australian Taxation Office, and recently increased on July 1.”
In nutshell, if you don’t have any form of private hospital cover, don’t delay and check the new thresholds to see if you could be affected. You may have to pay the tax man for every day that you are without hospital cover when you could be paying for a policy instead that provides some peace of mind. For example, if you’re single and earning between $97,001 and $113,000 a year, you’ll fall into the tier 1 income threshold. This means you may have to fork out 1 per cent of your annual income in extra tax via the Medicare Levy Surcharge if you don’t hold eligible cover for the entire financial year. The more you earn, the more you pay.
If you do have health insurance, take this opportunity to make sure it still suits your needs and budget. It’s
important to dodge the ‘set and forget’ trap when it comes to insurance, and unfortunately, it seems too many of us are making that mistake. The study found that most Aussies with private health cover (69 per cent) have either never switched their health insurance plan and/or provider or haven’t for more than two years. That’s a lot of people potentially missing out on extra savings, with 85 per cent of people surveyed who said they did switch within that timeframe claiming to have saved money. (1)
As well as reviewing your policy to make sure you’re not paying for things you don’t need, here’s a few extra tips to help you find suitable cover (and possibly pocket some extra cash:
• Could a higher excess save you money on your premium? Generally, the higher the excess or co-payment you are willing to pay, the lower the premium. If you think it’s unlikely you’ll be admitted to hospital in the near future, you could opt for a higher excess on eligible policies in exchange for lower overall premiums. Note that the highest eligible excess must be no greater than $750 for singles and $1500 for couples/families if you want to avoid the Medicare Surcharge Levy.
• Offers, deals and freebies - Some funds may be offering incentives around certain times of the year, and it could be a good idea to shop around and take advantage of any deals and offers! Remember though, a good deal doesn’t necessarily mean the cheapest. Make sure the policy is suited to your needs.
• The extras - There is a wide variation between funds on what services are offered and what you’ll get
back as rebates under extras cover. Ask yourself if you even need extras. You could consider flexible
products that combine your separate extras limits into a single annual limit for you to use across different
services.
Fight back against high power bills 👊⚡
The next household expense to take a closer look at is your electricity bill. If you can’t remember when you last checked how much you’re being charged, this information is for you! Depending on where you live, you may have scored a slight electricity price decrease on July 1 (or you will soon).3 Don’t celebrate just yet because you may already be paying more than you need for power after years of price hikes. The best way to check is to work out how much you’re currently paying (including what your service and supply fees are) and compare it against what other providers are charging and see if you can switch to a cheaper rate. It’s also a good idea to consider these extra tips:
• Explore flexible payment options - If offered by your provider, pay your bills weekly, fortnightly or
monthly, or sign up for bill smoothing, which can divide your annual usage into evenly spread
smaller instalments, to help avoid bill shock.
• Look out for special offers - Some retailers will offer you a better deal if you pay on time, manage your
bills online or pay by direct debit. Keep an eye out for these offers but be aware that some may expire
after a year or two.
There you go - two household expenses to review now to help you start the new financial year off on the right foot. To save you some time and effort, why not enlist iSelect’s comparison experts to help you find a health insurance policy that suits your needs and budget? They can also help you compare your energy deal against a range of other plans and providers and take care of the switching process.
