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Presented by Accounting & Super

Karen Quagliata Director The name, ‘Accounting and Super’ defines exactly what we do. Our firm is boutique style, meaning we only deal in a specific space, and that is small to medium enterprise and self-managed superannuation.

We are a highly experienced team of accountants and aim to deliver quality, personalised service to our clients. Accounting & Super Townsville Office Level 1, Suite 3, 54 Denham Street Ayr Office 132A Young Street www.accountingandsuper.com

We are protecting our income. It is just another expense, so why should we bother?

Insurance is just one of those things. If you have it, you may feel it’s a waste as it’s unlikely you will ever make a claim, but if you don’t have it, you wish you did when an unfortunate event occurs. As any financial, taxation or insurance professional would say, it is always in your best interest to consider protecting yourself from as much risk as possible. Most of us insure our health, our vehicles, our boats, our pets, and our houses (despite the excessive costs), but should we be insuring our income? More the question, why would we not insure our income? You never know what is around the corner, so the best course of action is to plan. Especially where you have debt, dependants, and little to no surplus cash set aside for a rainy day, you have even more reason to review your situation and consider income protection insurance. This type of insurance, in the event of a claim, provides monthly income regularly while you are unable to work due to an accident or illness. Income protection is one of the few personal insurances that you can generally declare as a personal tax deduction.

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Meaning it is an expense you can claim to offset against your assessable income, which in turn reduces your taxable income, and overall tax payable amount. However, if you paid your income protection insurance via your superannuation fund, you are unable to claim this amount as a tax deduction personally (the fund has this luxury instead). There are other aspects of consideration for this type of insurance inside or outside superannuation. Income protection policies usually provide a comprehensive cover, including additional features that the policy inside super may not offer. Superannuation held policies, because they are an expense to your fund, reduce your member balances frequently, and usually restricted to the option of indemnity with limited optional extras. Policies outside of super can also be based on the income of the individual at the time of the application. In the event of a claim, the payment is assessed on that income. It is especially helpful if that person’s income had reduced at the time of the claim.

So check your policy. Talk to your advisor or insurance company directly. Know what you cover you have, and what you don’t. It also doesn’t hurt to seek a second opinion and check whether it is more appropriate to have this protection outside versus inside superannuation. It is better to be on the safe side. It might cost a bit more in the long run, but if and when you face an adverse situation, and your income earning capacity is affected, you will be glad you had a policy in place, for that rainy day. Just like this city of ours might be ‘Brownsville’ now, I can guarantee, it will rain. I just don’t know when!

DISCLAIMER: The information provided is general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of a qualified advisor before you make any decision regarding any products mentioned. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly Accounting & Super Pty Ltd employees or agents shall not be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

Profile for DUO Magazine

DUO Issue 157 January | February 2020  

The Magazine of the North DUO is an elegant, intelligent publication highlighting style, home, fashion, food, travel, culture and exclusive...

DUO Issue 157 January | February 2020  

The Magazine of the North DUO is an elegant, intelligent publication highlighting style, home, fashion, food, travel, culture and exclusive...