Interested in a cool $150? Update your Medicare account details

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Medicare customers are being urged to update their bank account details to see if they’re entitled to a share of more than $110 million in unclaimed rebates. Here’s how to do so online in a few minutes.

And no, this is not one of those pesky scams doing the rounds! But we’ll touch upon that later.

The government released an interesting stat this week: almost 670,000 people have not provided Medicare with their bank details, which has resulted in more than $110 million in unclaimed rebates.

As such, the average amount owed to each individual is about $150 – a decent injection that could help you pay off your mortgage, an upcoming bill, or a nice Valentine’s Day dinner!

Some people are missing out on far more – and often they’re the people who need it most – if they are regular visitors to their doctor or have had treatment for a serious medical condition. So make sure you let your friends and loved ones know too.

Minister for Health Greg Hunt put out a statement this week encouraging residents to update their bank account details so they could start receiving their cash rebates.

“It only takes a couple of minutes, and the easiest way to update your details is by using one of the Australian Government’s digital channels, such as the Medicare Express Plus app, or through your myGov account,” he says.

Is that it?

Yup, that’s it.

Once you’ve logged into your account and updated your details Mr Hunt says Medicare will take care of the rest.

“The money you’re owed will be deposited in your account in a matter of days,” he explains.

“My advice is to set aside a couple of minutes, to do what is a really simple task that will ensure you receive what you are entitled to quickly and easily.”

Be wary of scammers!

It’s not lost on us that this sounds like a scam. And guess what? There are actually scammers out there trying to take advantage of this rebate payment by getting in touch with people directly over the phone, via SMS, or email.

The scammers are posing as Medicare representatives and contacting people asking for their bank account details, so you need to remain vigilant.

To avoid falling victim: don’t click on any links in emails or texts as they may take you to a fake website. Instead, go directly to www.my.gov.au to update your account.

“As recently as late last year, scammers were actively targeting people through SMS messages, that urged them to click on a hyperlink to claim their outstanding Medicare rebates,” says Minister for Human Services and Digital Transformation Michael Keenan.

“While the department does call, SMS, or email people, it never includes hyperlinks in emails or text messages.”

For more information on how to set up a Medicare online account, visit www.humanservices.gov.au/medicareonline

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Customers set to lose out as Big 4 Banks profit, yet again

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Once again the Big 4 Banks have escaped major punishment and gotten exactly what they wanted: adding a multi-thousand-dollar tax on borrowing that’ll hit consumers and brokers hardest.

By now you might have seen some of the Royal Commission recommendations in their final report.

All in all, the banks got off with a very light rap on the knuckles – as indicated by all four banks having their best day in months on the ASX.

On the other hand, the existing business model for 20,000 mortgage brokers – most of whom run businesses just like ours – is at risk.

That’s because one recommendation made by the Honourable Kenneth Madison Hayne AC QC in the final report is to ban trail commissions on all new loans by July 1st 2020.

It’s then proposed that over the following two to three years, all other commissions be phased out, with mortgage brokers shifting to a consumer-pays model whereby borrowers foot the bill.

This is exactly what the banks want.

Because if implemented, the banning of mortgage broker commissions will strengthen the profits and position of the major banks and reduce lender competition substantially.

What this will save the banks

According to a report on ABC news, Credit Suisse says this move will collectively save the banks a whopping $1.8 billion over five years.

That’s a staggering amount.

Destroying the viability of the mortgage broker channel would immediately reduce competition and drive customers back into the banks with the largest branch networks.

With less competition, the banks will likely increase their rates.

MFAA CEO Mike Felton says these recommendations do not represent a good outcome for consumers.

“These policy recommendations are effectively a new multi-thousand-dollar tax on borrowing. They will put the broker channel at severe risk, damaging competition and access to credit and entrench bank power,” Mr Felton says.

“I fail to see how decimating the broker channel, leaving Australians with a handful of lenders to choose from, is good for competition, or good for customers. We are critical to the health of Australia’s mortgage lending market.”

The fallout

At this stage it remains unclear whether the Final Report is recommending a consumer fee-for-service or the so-called ‘Netherlands’ model.

“If the recommendation is a broker only consumer fee-for-service, that will mean brokers and smaller lenders will no longer be able to compete on a level playing field with the big banks with major branch networks,” Mr Felton explains.

“We know from recent, independent research that 96.5% of customers are not willing to make a payment to a broker of $2,000 and most are unwilling to pay anything at all.”

Meanwhile Peter White, managing director of the Finance Brokers Association of Australia (FBAA), says brokers should never have found themselves in the firing line.

“This royal commission is about the greed of the big banks and insurance companies, and so it should be because their behaviour has been appalling,” he said.

It’s not just the mortgage broking industry that’s been left dumbfounded by the recommendation. Here’s what Financial economist and Australian Financial Review contributing editor Christopher Joye had to say:

“The biggest winners from the royal commission are demonstrably the big banks while the largest losers are Australia’s mortgage brokers. Indeed, the top end of town have done an amazing job convincing everyone that brokers should be made the ‘fall guys’ for their own deeds, surreptitiously fattening their profits, despite no evidence of pervasive misconduct,” Mr Joye said.

What next?

For the time being, the recommendations remain just that: recommendations.

They’re not set in stone. Not yet.

Because while the Coalition and Labor have both said they’ll take action on all 76 recommendations in the report, there is an election coming up.

Enough noise made now could result in one of the two major political parties sitting up and taking notice.

That means there’s still time to let your local MP know that you’re happy with the way the system is and that you don’t want the banks transferring the costs of a mortgage broker onto customers.

If you’d like any further information on this issue, please don’t hesitate to get in touch.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Are you on the NBN? You could be entitled to a big refund

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Ahh, the NBN. Depending on where you live it’s either lightening fast, or so agonizingly slow that you want to pull your hair out. Well, the good news is you could be entitled to a refund worth hundreds of dollars.

Over the last 15 months the ACCC has been negotiating with internet service providers to offer their customers a refund if warranted.

Telstra, Optus, TPG, iiNet, Internode, Dodo, iPrimus and Commander have each admitted that they likely made false or misleading representations about their connection speeds.

So now the ACCC is “urging” you to contact your retail service provider (RSP) to see if you’re eligible for a refund which, in many cases, is worth a few hundred dollars.

That’s a decent injection to help you pay off your mortgage, bills that have accumulated over Christmas, or even some spending money over the upcoming Easter holidays.

Why you might be entitled to a refund

Ok, so when you signed up to the NBN, the RSP that sold you the plan most likely advertised it with maximum theoretical speeds.

This might have looked something like: “100 megabits per second (Mbps) download and 40 Mbps upload” speeds – aka 100/40.

However, if you’re on a FTTN (fibre-to-the-node) or FTTB (fibre-to-the-building) plan, you probably aren’t getting anywhere near those speeds because there are existing copper lines connecting your building to the NBN network.

Put simply: copper = unreliable connections and slower internet speeds.

It’s mainly FTTP (fibre-to-the-premises) that can really reach the advertised theoretical speeds, as it doesn’t rely on any copper for the internet connection.

You have (unopened) mail

Since November 2017, the RSPs were meant to contact more than 142,000 affected consumers to offer them a range of remedies, such as moving to a lower speed plan of their choice, or exiting their contract and receiving a refund.

However, two in three affected consumers – roughly 100,000 households – have not responded to the letter or email from their RSP.

“They may be eligible for refunds, some in the hundreds of dollars,” says ACCC Acting Chair Mick Keogh.

“The ACCC is urging NBN customers to contact their NBN retailer if they have received a letter or email offer of a remedy, or think they might be entitled to a remedy.”

You might even be entitled to a refund if you’re a new customer, too.

Within four weeks of signing up, RSPs must check their speeds and if the speeds are below those advertised for the plan the consumer chose, the RSP must offer remedy options.

How much you could be refunded

Ok, let’s say back in December 2016 Anne purchased a 100/40 NBN plan from a Telco at a cost of $100 a month.

In December 2017, Anne would have received an email from her Telco advising that her connection was only capable of maximum speeds of 37 Mbps download and 13 Mbps upload.

This means she was unable to receive the full benefit of the 100/40 plan.

In the email that was originally sent, but that Anne missed or overlooked, the Telco offered her the following options:

Option 1 – Move to a lower plan of her choice, such as a 50/20 or 25/5 plan, and receive a refund of $360.

Option 2 – Exit the plan without cost and receive a refund of $360 for the difference in plan prices.

Option 3 – Remain on her current plan with no refund.

In this example, with a maximum speed of 37 Mbps download, Anne could receive the maximum speed of the 25/5 plan but not the 50/20 plan.

Therefore, Anne is entitled to a refund of $360, which is the difference between a 100/40 Plan and 25/5 Plan ($30 a month) over 12 months.

All she has to do is let her Telco know.

Your next step

This is the simple part. Simply get in contact with your RSP and see if you’re entitled to a refund.

The ACCC is on their case about it so it should be fairly straightforward and the customer service representative will know what you’re referring to.

Good luck!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Do you Airbnb your property? The ATO has you in its sights

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Sharing is caring, right? However, when it comes to the sharing economy, the ATO is feeling neglected and wants its fair share. Here’s what you need to know if you rent out your property on Airbnb.

If you need any more convincing that the Australian Tax Office (ATO) will be cracking down on undeclared income from sharing economy platforms such as Airbnb this year, check out the name of the consultation paper that Treasury released this week:

‘Tackling the black economy: A sharing economy reporting regime.’

Now, the number of Australians involved with “the black economy” is quite hard to quantify, but Treasury has given it a crack.

They believe almost 11 million Australians earned extra money from sharing economy services – including Airbnb, Uber, Uber Eats, Airtasker, Parkhound and many other platforms – from July to December 2017.

And while Airbnb doesn’t release any official data, independent monitoring website Inside Airbnb says listings in Australia grew from 43,610 in 2016 to 89,863 in December 2017.

No wonder the tax man feels like he’s missing out.

Consultation paper findings

It’s no secret the ATO is well aware that a lot of people haven’t been declaring income from sharing platforms in recent years. In 2016 they released this video, and more recently built this information webpage.

However this consultation paper is the clearest indication yet that a tax crackdown is nigh.

“During its consultations, the Taskforce heard that as the sharing economy grows there is an increasing risk that sellers may not be paying the right amount of tax,” the report states.

“The ATO has already begun to work with businesses on a reporting regime, obtaining information from some ride-sourcing providers and accommodation providers under its formal information gathering powers.”

In a nutshell: the ATO will be granted access to your Airbnb and Uber income data if they require it.

What to do?

Well, if you’re not already, then it’s time to start keeping accurate records of the income you’re earning in the sharing economy space. That includes platforms such as Uber, Airtasker and many other players.

Declaring the income is straightforward and just like any other form of income you earn: basically keep statements showing income from your guests, and don’t forget to keep receipts of any expenses you want to claim deductions for. That will make it straight-forward come tax time.

It might be worth checking out this information page from the ATO for further tips.

Finally, keep in mind that if the ATO is cracking down in this space they might also look more closely into some of your past tax returns. In which case, here’s what you need to know about correcting a past income tax return if declaring income in the sharing economy space slipped your mind in the past.

It may increase the tax you owe, but the ATO generally treats it as a voluntary disclosure. You’ll still have to pay any outstanding tax, but you’re likely to receive concessional treatment for any penalties and interest charges that apply.

If you’d like any further information on this new and emerging space, feel free to get in touch. We’d be happy to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Property buyers are increasingly turning to mortgage brokers

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Excuse the humble brag, but property buyers are turning to mortgage brokers in record numbers. Here’s why that’s great news for the both of us.

Ok, ok, sure, we know we’re beating our own drum a little here.

But there’s a good reason why, we promise.

Firstly, it’s fantastic to see that at a time when the royal commission is dominating headlines and consumer confidence in the big banks is tanking, our industry is proving worthy of people’s trust.

During the September 2018 quarter, mortgage brokers settled an unprecedented 59.1% of all residential home loans.

That’s up from 53.6% in 2016 and 55.7 per cent in 2017 over the same period.

MFAA CEO Mike Felton points out that the result reflects not only the trust and confidence customers have in their mortgage broker, but the systemic importance of the mortgage broking industry.

“As banks have persisted in making it more difficult to secure a loan, turning many would-be borrowers away, consumers have continued to increasingly utilise the broker channel for experience, expertise and greater market choice to secure access to credit,” Mr Felton says.

Take that, banks

The figures emerge as the big banks continually try to curb the effectiveness of mortgage brokers. And it doesn’t take Einstein to figure out why: mortgage brokers promote a more competitive lending market at their expense.

According to Deloitte Access Economics, over the past three decades brokers have contributed to the fall in net interest margin for banks of over 3% points. This saves you $300,000 on a $500,000 30-year home loan (based on an interest rate fall from 7% to 4% pa).

Furthermore, on average, mortgage brokers have 34 lenders on their panel, and 28% of the time arrange residential loans through lenders other than the big four banks.

“In addition to providing customers access to a panel of 34 lenders on average, brokers are ideally positioned to help customers, especially those with more complex lending scenarios, to understand the ever-evolving application process and provide the information necessary to meet changing lender requirements,” adds Mr Felton.

Current model under threat

There’s been a recent push by at least one of the big four banks to make the customers pay for the services of a mortgage broker. If they had their way, that would be an industry-wide standard.

However, news that more and more customers are flocking to mortgage brokers under the current system will hopefully help us both out in the long run.

Better yet, a recent report shows that 9 out of 10 customers are satisfied with the services provided by mortgage brokers, so we sincerely thank you for your support.

Got a minute help us out a little more?

Besides continuing to use our services, and recommending us to family and friends, another way you can support us is by contacting your local MP to let them know you’re happy with the mortgage broking service we’re currently providing.

By letting your local Federal Member of Parliament know this you can help prevent the cost of our future services being transferred from the bank over to you – and you’ll also be showing your support for us.

If you’d like any more information on this issue don’t hesitate to get in touch. We’d love to speak to you more about it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.