By Wendy Webb
At tax time we often look for ways we can legally manage our finances to our best advantage. Chronic illness and pain can have a significant effect on one’s finances, but there are many ways to minimise the impact.
Everyone’s financial situation is different and the following suggestions are only general. Specific advice can be obtained from Medicare; Centrelink; health funds; superannuation funds; tax agents and financial advisors.
Claiming Medical Expenses on your Tax return
Tax Pack Supplement pages 55-56, available on the Australian Taxation Office website or from newsagents, details the ‘20% tax offset on net medical expenses over the threshold amount’, which is $2000 per family, and can be claimed on either spouse’s tax return. Items such as prescriptions, allied health services and medical aids can be claimed, and it is surprising how these costs can add up. Medicare, health funds and pharmacies will provide tax statements for this purpose, and additional receipts can be included.
Start this new tax year by keeping all relevant receipts to ensure that you can claim all possible expenses next year. Ask your GP for referrals for treatment and ‘medical aids’, even if not required for Medicare, so that they can be claimed as well.
Managing Work with a Health Problem
If you can work while managing your health condition you will probably be better off financially. Keeping your employer or manager informed, in a general sense, about your health problems will enable them to provide suitable working conditions, perhaps by modifying your work area or reducing your hours. Many employers would rather keep someone they know in a part time job than lose their skills and knowledge altogether. Maybe consider taking long service or extended leave to see whether your health improves while not working, or to have therapy and learn to manage your condition better. If your job is aggravating your condition, or cannot be modified to suit you, options include changing jobs or working from home. Is there something else you have wished you could try if you had the chance?
Insurance and Superannuation
Some people are unaware that their superannuation fund has income protection insurance as well as life insurance included in their policy. There may be a small compulsory component that can be enhanced by voluntary contributions. The pre-existing condition can be an issue, but it’s worth enquiring to see whether you might either be eligible for a support payment or making sure you, and/or your partner, are covered for future contingencies through your super or a separate insurance policy.
If you have had to retire prematurely there may be the possibility of accessing your superannuation early. This decision would need to be taken in the context of professional advice on your whole financial situation.
Entitlements and Allowances
The Department of Human Services now covers all services previously supplied by Centrelink, Medicare, the Child Support Agency and CRS Australia, and in many cases a ‘one stop shop’ will enable easier access. Look online or ask staff to help you check your entitlements for a health care card; ensure you and your family are registered for the Medicare safety net; enquire about a disability support pension; sickness allowance; mobility allowance and various carer payments if your condition requires significant assistance from a family member.
Start a new PBS prescription record form at the beginning of each calendar year so that as soon as your family reaches the safety net, you will be eligible for reduced or free prescriptions. The form is available from any pharmacy, but should be presented with each prescription so that a sticker can be attached. If you forget to take your card, ask for the sticker to attach yourself.
Under the Chronic Disease Management Program, your doctor may provide a Medicare referral for some allied health services, to reduce the cost of appointments.
If you belong to a health fund, ensure you claim all you can for ‘ancillaries’. If you do not currently belong to a fund, look at whether joining would be worthwhile, depending on your need for hospital treatment and usage of other rebatable services. Shop around for the best deal (try iselect.com.au) and look out for special offers to avoid waiting periods for existing conditions.
Managing our finances can be tedious, but these efforts can be worthwhile in the long run so get stuck into it and reap the benefits!