Debt recycling is a wealth-building strategy that converts your non-deductible home loan into tax-deductible investment debt, helping Australian homeowners pay off their mortgage faster while building an investment portfolio.

Debt recycling, also known as mortgage recycling, is best suited to homeowners with equity in their home, a stable income, and a long-term investment horizon – typically seven years or more. High-income earners can benefit particularly from the strategy, as larger tax deductions apply at higher marginal tax rates.

This guide covers:

• How debt recycling works
• The step-by-step debt recycling process
• Tax benefits of debt recycling
• Debt recycling vs offset account
• Benefits and risks
• Who debt recycling suits
• Frequently asked questions

Or if you’d like to find out more about how debt recycling may apply to your specific financial situation, you can talk to an investment advisor.

What Is Debt Recycling?

Debt recycling is a way to turn your existing bad debt, such as your mortgage, into good debt that is tax deductible.
Debt recycling, at its most basic form, involves leveraging the equity in your non-tax-deductible asset, i.e. your mortgage, to invest in an income-producing asset (which you can claim a tax-deduction on). You then use that income to pay off your home loan. Once your home loan is paid off, you only have the tax-deductible loan on your investment assets to pay.

Look, I know it can sound complicated! Keep reading, as we’ll explain everything in this comprehensive guide.

Bad Debt vs Good Debt

We define good debt as a debt that is tax-deductible, or is owing on a nest egg asset which is helping you grow your long-term wealth. Bad debt, on the other hand, is any that is not tax-deductible and/or is not owed on an asset that is helping you grow your wealth.

Common examples of bad debt include car loans, credit card debt and even the mortgage on your principal place of residence. Yes, that’s right, while owning a home can have a number of financial benefits, your mortgage may actually be considered bad debt! This is because, even though you’re paying off an asset, you’re not getting any income or tax benefits out of that money in the meantime.

That’s where debt recycling comes in.

How Debt Recycling Works

This is an example of debt recycling. You’re paying off your mortgage and realise that you’ve built an equity in your home of $300,000. You draw out some of that equity and invest it into a rental property or shares – some kind of income-producing asset. The interest on the investment loan to purchase the income-producing asset is tax-deductible. And now you use the tax savings and investment income to pay down your outstanding home loan balance more quickly.

Here is an expanded example: a homeowner has a $600,000 mortgage and makes $1,000 in extra repayments each month. Rather than simply reducing their loan balance, they redraw that $1,000 and invest it into a diversified share portfolio. The interest on the redrawn $1,000 is now tax-deductible. Over time, their non-deductible home loan balance shrinks, their investment loan grows by the same amount, and the investment income and annual tax refund are directed back into the mortgage – accelerating the process further.

Debt recycling does not increase your total debt – it restructures existing debt from a non-deductible to a deductible position.

If you simply invest rather than recycling your debt on your home loan, you won’t receive the tax benefits of the income-producing asset. This is because you now have a tax deduction – where before, you didn’t.

If you simply invest rather than ‘recycling’ your debt on your home loan, you won’t receive the tax benefits of the income-producing asset. This is because you now have a tax deduction – where before, you didn’t.

Now it’s important to realise that you’re not actually ‘increasing’ your debt. As you continue to pay off your home loan, you can draw that money out to invest. You are then creating multiple assets, one of which is producing income that helps to offset the costs of the other.

More importantly, you are able to use that income to pay off your non-deductible loan more quickly. Typically, you’ll see the non-deductible home loan shrink over time, while your ‘tax-deductible investment loan’ grows. The idea is to keep recycling your debt until you have effectively moved all your debt into a tax-deductible position.

Now you might wonder why you don’t just invest, without drawing out your equity to do so? Great question – simply put, if you do that you won’t access the tax savings on the interest. And these savings can be very significant over time. Debt recycling can particularly benefit those with a high income who may otherwise end up paying more in tax.

Step-by-Step: How to Recycle Debt

Debt recycling typically follows a structured, repeatable process:

• Make extra repayments on your home loan to build equity. Every extra dollar you put toward your home loan reduces your non-deductible balance and builds the equity pool you can redraw for investing.
• Set up a separate investment loan split with your lender. Keeping the deductible and non-deductible portions clearly separated is critical from day one. Each split should have its own account number and statement trail. A mortgage broker can help you structure this correctly – the ATO requires you to be able to trace borrowed funds directly to their investment purpose.
• Redraw from your investment loan split to fund your investments. Your loan is split into two portions: a home loan split and an investment loan split. The interest on the investment split is tax-deductible; the home loan split is not, so it’s important to keep them separate. When you redraw, the amount you take out must match the amount you put in, and it must come from the investment loan split, not your offset or everyday account. This keeps a clean trail for the ATO and ensures your interest stays deductible.
• Invest the redrawn funds into income-producing assets. Shares, ETFs or managed funds are the most common vehicles, as they generate assessable income through dividends and distributions. The borrowed funds must be used to purchase income-producing assets for the interest to be deductible.
• Use investment income, dividends, and tax refunds to make further repayments on your home loan. In our experience, many investors choose to reinvest dividends directly back into their share portfolio to compound their returns, and it’s an approach we often see work well as part of this strategy. The key is that other income streams, like tax refunds and any cash distributions, flow back into your mortgage to reduce the non-deductible balance further and free up more equity to recycle. The more consistently you feed the cycle, the harder it works over time.
• Repeat. Over time your home loan shrinks and your investment portfolio grows. The strategy rewards consistency and patience rather than timing the market.

Loan structure is critical. The split must be set up correctly from the start to maintain ATO deductibility – if investment and personal debt are mixed in the same account, you risk losing the tax deduction entirely. Getting this right from day one is one of the strongest arguments for working with an experienced financial adviser and mortgage broker before starting.

Here’s a video from our licensee company, GPS Wealth, to help you understand what debt recycling looks like in action:

But I do want to emphasise, debt recycling is not a strategy that is ideal for everyone. There is a level of risk involved in managing two loans instead of just one.

Since you will end up with two loans during this process, both of which will likely be leveraged against your principal place of residence, you need to be comfortable and confident you are able to keep paying your loans.

While using a debt recycling strategy can help you amplify the benefits of investing and build your wealth in a quicker and more efficient way, it also amplifies the risks you may encounter if there is a market turndown.

Determining whether debt recycling is the right strategy for you will depend on your risk tolerance, the time until you need to access your investment assets and your short, medium and long-term financial goals.

When we approach this strategy with our clients, we carefully evaluate each element of your financial situation to ensure that debt recycling is the right fit for you and your unique financial circumstances, and that it will achieve what you want it to.

The Tax Benefits of Debt Recycling

The primary tax benefit of debt recycling is that interest on money borrowed for investment purposes is generally tax-deductible under Australian tax law. 

The ATO doesn’t look at where the loan is secured, it looks at what the money is used for.

So if you borrow against your home and use that money to buy investments that earn income, the interest on that part of the loan can usually be claimed as a tax deduction.

There is an additional tax advantage for investors who hold Australian shares: franking credits. When companies pay you dividends, they may already have paid tax on their profits. With fully franked dividends, you get a credit for that tax. This can lower the tax you owe or even lead to a refund, depending on your personal tax rate.

Higher income earners benefit most from debt recycling because larger deductions apply at higher marginal tax rates. For someone on a 47% marginal rate (including Medicare levy), a $10,000 interest deduction is worth $4,700 in tax savings. For someone on 32.5%, the same deduction is worth $3,250. The strategy’s after-tax advantage scales with income for maximising your tax benefits.

Tax outcomes will vary depending on your individual circumstances. We recommend speaking to a qualified adviser – our tax advice team can help you understand what applies to your situation.

The Benefits of Debt Recycling

In a nutshell, when debt recycling is done right, you’ll have the benefits of

1. Owning your home sooner
2. Saving on tax
3. Building & diversifying your investments (and your wealth)
4. Not sacrificing your current lifestyle while getting better results

Just like many financial strategies, debt recycling can have different benefits depending on your particular financial situation, income and future financial goals. One of the most important benefits of debt recycling is that it helps you build an investment portfolio and grow wealth faster.

In the traditional route, you would pay off the mortgage on your family home first before building an investment portfolio. But, that means that you are sacrificing the compounding returns you would have gained had you started building your investment portfolio earlier. When you consider that it takes 25-30 years for the average family to pay off their mortgage, the returns you potentially miss out on over that time will have a significant impact on the likelihood of you achieving other financial goals – or building wealth for retirement.

Finally, utilising a debt recycling strategy can allow you to build a diverse investment portfolio from the beginning. While a more traditional investment strategy would lock you into one type of investment – for example property – until it was completely paid off, debt recycling can be used to free up extra money that can then be used to invest in shares or other diverse investment assets such as investment properties. This way you not only gain the benefits of compounding returns but also ensure that your wealth is spread across multiple asset types and sectors as it continues to grow, thus protecting it from market downturns when they occur.

The Downsides of Debt Recycling

While debt recycling does have a number of benefits, there are a few downsides worth considering – especially if your strategy is not structured correctly or you don’t have the required income to support the endeavour over the long term.

The number one thing you should know before considering debt recycling is that just as your returns are compounded, so too are any losses you might suffer when markets experience a downturn. Since you have debt owing on two types of investment assets, when the market experiences a turn it’s highly likely you will feel it on both sides.

In most debt recycling strategies, the asset that your strategy is leveraged against is your family home. You have to be comfortable with the level of risk associated with this strategy.

It is also due to this increased risk factor that we usually only recommend debt recycling as a longer-term strategy. This allows you time to recover from any market dips that might occur, before you have the need to draw out the income from your assets. In fact, we usually like to start with an investment timeframe starting at 7 years, with a longer time frame generally leading to better benefits.

Debt recycling  is most effective for those with a secure income, who will be able to comfortably service both loans (and who’ll benefit the most from the tax advantages). However, depending on the situation, we also use the strategy successfully with clients who are looking to purchase their first investment property using the equity in their home.

If you are able to tick the financial boxes, it’s also important that you have a sufficient amount of personal protection to ensure you or your loved ones are able to continue meeting your loan repayments in case something unexpected happens. You can also speak to a financial advisor about what insurances are recommended in these situations.

Debt Recycling vs Offset Account: What’s the Difference?

Debt recycling and using an offset account are both strategies for managing your mortgage, but they serve very different purposes.

Some people actually use both strategies together, keeping an offset account for short-term cash flexibility, while using debt recycling for longer-term wealth building.

The offset acts as a handy buffer and helps cut down daily interest. Meanwhile, the debt recycling side does the heavier lifting by gradually converting non-deductible debt into deductible debt over time.

One key difference to keep in mind: most experienced practitioners suggest keeping extra cash in an offset account rather than letting it sit in a redraw linked to the investment loan. Mixing those two can make your records more complicated if you ever need to deal with the ATO.

Is Debt Recycling Worth It?

Whether it is worth it for you depends on how this technique will affect your current financial situation and your future investment goals.

Before building a debt-recycling strategy on your own, we highly recommend speaking to a financial professional who has experience in this area. This is  because your situation can really impact how successful you will be in using the strategy. And you need to know what the outcomes might be in order to 1) protect yourself, and 2) achieve the financial security you desire.

However, as we’ve covered, there are a bunch of great outcomes for those who are in a situation to use this strategy. These include:

• Using investment income to make extra repayments on your non-deductible debt, and
• Replacing your debt with tax-deductible debt (the interest is what is deductible, not the entire amount).

Indirectly you are able to diversify your portfolio into things like shares or other properties, and potentially even achieve some passive income from any positively-geared investments.  Having other assets that you need to look after, such as investment property, can also be used to reduce your taxable income. Not to mention the ongoing benefits of growing your family wealth. This truly is a long-term strategy.

Approach the strategy with care

What debt recycling is not. Debt recycling isn’t a magic bullet for your bank account. In order to be successful, it requires the same perseverance and good savings and money management skills as any other financial strategy. Not to mention, the ability to follow through on paying off your debts!

Experienced investors may feel confident of managing this kind of strategy on their own. Nevertheless, we recommend that most people seek the advice of a financial advisor, who is capable of evaluating their current financial situation.

Is Debt Recycling For You?

You can assess whether debt recycling is the right strategy for you by looking at a few areas of your financial life.

• Do you own your home (with a current loan), and have you built up equity?
• Do you have a stable income that allows you to pay off your loan, and still have some surplus cash flow?

Once those practical questions are answered, you need to consider what you want to get out of this strategy.

• Are you interested in having a long-term focus towards investment goals? Debt-recycling is not suitable for short-term results.
• Do you have an understanding of the risk involved and are you comfortable with your ability to weather some market fluctuations?
• Finally, do you have any level of protection for you and your family in case of an emergency? For instance, if you cannot work for a period of time due to injury. When faced with a situation like this, income protection insurance can be extremely valuable.

If you feel comfortable answering yes to these questions, then debt-recycling could be a good option for you. If you’d like to discuss your eligibility for this kind of strategy, you can call our office on 07 3852 4114 to talk with a financial advisor.

Loan Structure and the ATO: What You Need to Know

These strategies are a completely legal way of using your debt to reduce your tax. Keep in mind that the Australian Tax Office is very clear about what you can claim in this regard. You can only claim interest on a debt that has been incurred for an income-producing purpose, according to the official statement.

Another thing to consider is how to approach your loans. There are a variety of methods and rules around loan splits, using your offset account effectively, and even ensuring that your home loan has the flexibility for this strategy. Some professionals will also recommend using different combinations of interest-only loans and principal-and-interest loans to achieve the most efficient financial result.

We won’t go into too much detail here, as these complicated decisions are so particular to each individual. We recommend getting financial advice, and also speaking with a mortgage broker if you are not sure what your current loan will enable you to do.

Still Unsure About Debt Recycling? We Can Help

In summary, debt recycling is a wealth creation strategy that can be beneficial if you are an investor who is comfortable with the risks, has access to good advice, and has the means to support your strategy.

If you think debt recycling sounds like something you’d like to consider to help you build wealth, you’re welcome to contact our team for a free consultation.

We provide professional advice to everyday families, and we’ve helped many of them grow their wealth using techniques such as debt-recycling.  We get to know you and then we assess your situation and short, medium and long-term goals before guiding you in making the financial decisions that will really make a difference.

Get In Touch With An Investment Expert Today

Frequently Asked Questions About Debt Recycling

What is debt recycling in Australia?

Debt recycling is a strategy where Australian homeowners use equity in their home to invest in income-producing assets, gradually converting their non-deductible home loan into tax-deductible investment debt. Over time, investment income and tax refunds are redirected to pay down the home loan faster while a share or ETF portfolio grows in parallel.

Is debt recycling legal in Australia?

Yes. Debt recycling is a legal strategy under Australian tax law. The ATO confirms that interest on borrowed money is deductible where the funds are used for an income-producing purpose. The key is that the loan must be structured correctly and the funds must be traceable to their investment use. You can refer to the ATO’s official guidance on interest deductibility for the precise rules.

How much equity do I need to start debt recycling?

Most lenders require at least 20% equity in your home to avoid Lenders Mortgage Insurance (LMI), though the more equity you have available, the more debt you can recycle at the outset. Your lender will also assess your income and overall borrowing capacity. A mortgage broker can help you understand exactly how much equity is accessible in your specific loan structure.

What investments are used in debt recycling?

The most common investment vehicles are shares, ETFs (exchange-traded funds), managed funds, and investment property – all of which generate assessable income through dividends, distributions or rent. The critical requirement is that the assets produce income, as this is what makes the interest on the investment loan deductible under the ATO’s purpose test.

What is the difference between debt recycling and negative gearing?

Debt recycling restructures your existing home loan debt into deductible investment debt – it does not increase your total borrowing. Negative gearing involves borrowing specifically to invest in an asset where the costs (including interest) exceed the income generated, with the loss used to reduce your taxable income. They are different strategies: negative gearing is often used with investment property, while debt recycling is about converting the debt you already have.

What happens to debt recycling if interest rates rise?

Rising interest rates increase repayments on both your home loan and your investment loan split, which is why stable income is so important before starting. Higher rates also increase the size of the interest deduction, which partially offsets the cost – but the net effect depends on your tax rate, investment returns, and cash flow buffer. This is one of the key risks of the strategy and should be stress-tested before you commit.

Do I need a financial adviser for debt recycling?

Professional advice is strongly recommended. The loan must be structured correctly from the start – mistakes in how the accounts are set up can cost you the tax deduction entirely and are difficult to fix after the fact. A good adviser will also model the strategy against your specific income, loan balance, investment horizon and risk tolerance to confirm it suits your situation before you begin. Our team at My Wealth Solutions can walk you through whether it’s the right fit.

The post Your Comprehensive Guide to Debt Recycling appeared first on My Wealth Solutions.

You can download the 2025/2026 Tax Planning Guide here or read below.

What the guide covers:

• Tax strategies to use before 30 June 2026
• Key rules around super, deductions, investments and business expenses
• What the 2026-27 Federal Budget means for you and what needs your attention now

One thing worth keeping in mind as you read: your financial decisions are all connected. A super decision can shift your investment strategy, a property move can affect your CGT position, and a business structure change can send ripples across your entire financial picture.

At My Wealth Solutions, we look at all of it together, because the best outcomes come from seeing the whole picture. Call us on 07 3852 4114 or book your discovery appointment here. We’d love to help you make the most of what’s left of this financial year.

Individuals: Tax Guide 2026

Concessional Superannuation Contributions

Concessional contributions include employer contributions (including the Superannuation Guarantee) and any personal tax-deductible contributions you make. The concessional contributions cap for 2025/26 is $30,000. If your total super balance was below $500,000 on 30 June 2025, you may be eligible to carry forward unused concessional cap amounts from previous years (up to five years) and contribute above the standard cap.

Super contributions can also help reduce the impact of capital gains. By lowering your taxable income, a top-up contribution may place you in a lower tax bracket, reducing or eliminating CGT liability on asset disposals.

From 1 July 2026, the general concessional contributions cap is $32,500

Action: If you would like to understand whether you have available contribution capacity or whether additional contributions may be appropriate for your situation, contact us to review this before 30 June 2026. Any contribution strategies should be confirmed with advice tailored to your circumstances, and contributions must be received and acknowledged by your fund by 30 June 2026.

ATO Contribution Caps

Minimum Pension Payments (SMSFs)

If you have an SMSF and are drawing a pension from it, you are required to withdraw a minimum amount each financial year. If that minimum is not met, the fund loses its tax-free status on pension assets for that year, meaning investment earnings that would otherwise be taxed at 0% are taxed at 15% instead.

The minimum withdrawal is calculated using a percentage based on your age, applied to your account balance as at 1 July 2025. The ATO publishes the current percentage factors for each age group on its website. The payment must be received by you on or before 30 June 2026. A pension paid on 30 June counts; one paid on 1 July does not. Partial commutation payments do not count toward the minimum for the year.

Action: Talk with your accountant if you have any questions before EOFY.

ATO: Income stream (pension) rules and payments

Government Super Co-Contribution

If you earn less than $62,488 and make a personal after-tax super contribution before 30 June 2026, you may be eligible for a government co-contribution of up to $500.

The government contributes 50 cents for every $1 you put in, up to a maximum of $500. The co-contribution phases out above $47,488 and cuts off at $62,488.

You must also be under 71, have a total super balance below $2 million, and earn at least 10% of your income from employment or running a business. You don’t need to apply, the ATO calculates and pays it automatically once you lodge your tax return.

Action: Assess whether you or a family member may be eligible. Even a partial contribution generates a partial co-contribution.

ATO: Super co-contributions

Medicare Levy Surcharge

If you do not hold an appropriate level of private hospital cover and your income for MLS purposes exceeds $101,000 (singles) or $202,000 (families) for 2025/26, you will be liable for the Medicare Levy Surcharge (MLS). This surcharge ranges from 1% to 1.5% depending on your income tier, and applies in addition to the standard 2% Medicare Levy.

Action: Compare the cost of a basic hospital cover policy against the MLS you would otherwise pay. The MLS is calculated on a pro-rata basis, so obtaining cover partway through the year still reduces your liability.

ATO Medicare Levy Surcharge

Division 296: Large Super Balance Tax ($3M & $10M Thresholds)

From 1 July 2026, individuals with a Total Superannuation Balance (TSB) exceeding $3 million (indexed) will pay an additional 15% tax on the proportion of fund earnings attributed to the balance above that threshold. 

A further 10% surcharge (25% total additional tax) applies to the portion of the balance exceeding $10 million (indexed). The tax applies only to realised earnings and is assessed at the individual level, though it can be paid personally or via the super fund.

Action:

• Obtain Valuations: For SMSFs, ensure all assets have a formal, documented market valuation as at 30 June 2026. This is critical for calculating the cost base reset, which “locks in” gains made prior to the new tax regime.

• Total Balance Superannuation (TSB): Review your aggregate TSB across all accounts via myGov. Ensure you account for any defined benefit interests, which are valued using specific actuarial formulas.

• Withdrawal Strategy: If you meet a condition of release (e.g., age 60 and retired), you have until 30 June 2027 to withdraw amounts in excess of the thresholds to mitigate or eliminate the tax for the 2026–27 year and beyond.

ATO: Better Targeted Super Concessions (Division 296)

Income Protection Insurance

Premiums paid for income protection insurance held outside of superannuation are generally tax-deductible. This deduction does not apply to policies held inside superannuation.

Action: If you pay your premium annually, ensure payment is made before 30 June 2026 to claim the deduction in this financial year. Check for “bundled” cover–if your policy includes Life Insurance, Trauma, or TPD (Total and Permanent Disability), only the income protection portion is deductible.

ATO: Income protection insurance

Work from Home Expenses

You can claim working from home costs using one of two methods: 

Fixed rate method: Claim 70 cents per hour worked from home in 2025/26. This covers electricity, gas, internet, phone, and stationery. You must keep a contemporary record of actual hours worked (timesheet or diary); the ATO no longer accepts estimates. 

Actual cost method: Claim the work-related proportion of individual expenses. This requires receipts, floor area calculations, and a usage log for every item. Note: Claiming occupancy costs (rent/mortgage interest) if your home is a principal place of business requires specialist advice, as it may trigger Capital Gains Tax on your home. 

Action: Audit your 2025/26 hours log now. Note: If your home is also used as a principal place of business (for example, your employer does not provide you with a workplace), you may be entitled to claim occupancy costs such as a proportion of rent or mortgage interest. This requires specialist advice.

ATO: Working from home expenses

ATO: Occupancy expenses

Work-Related Deductions

You can claim a deduction for work expenses incurred in your job, provided they aren’t reimbursed and you have records. Common deductions:

• Uniforms & Laundry: Occupation-specific/protective gear only. 
• Tools & Equipment: Stationery and tools.
• Self-Education: Must relate to your current role. 
• Fees: Union fees, professional memberships, and technical subscriptions.
• Phone/Internet: Work-related portion only. Note: If using the 70c Fixed Rate for WFH, you cannot claim these separately.

Action: Gather receipts now. The ATO’s data-matching targets “standard” $300 claims, so only claim what you can fully substantiate.

ATO: Deductions you can claim

Motor Vehicle Expenses

If you use your personal vehicle for work (excluding ordinary commuting), you can choose between two methods: 

Logbook method: Maintain a 12-week continuous logbook to establish a business-use percentage. This logbook is valid for five years. You claim that percentage of all actual costs: fuel, registration, insurance, servicing, and depreciation. Keep all receipts, though fuel can be estimated using odometer records. 

Cents-per-kilometre method: Claim 88 cents per km for up to 5,000km per vehicle. No logbook is required, but you must be able to show how you calculated the distance (e.g., diary entries). 

Action: The 88c rate is now very generous; for exactly 5,000km, it yields a $4,400 deduction without receipts. If your work travel exceeds 5,000km or your vehicle has high running costs, start a 12-week logbook immediately to maximise your claim. 

ATO: Cents per kilometre method (88 cents)

Travel Expenses

You can claim travel expenses if you are required to travel away from your home overnight for work. You must keep actual receipts for all costs (accommodation, meals, and incidentals). If traveling for six or more consecutive nights, you must also maintain a travel diary detailing the nature of the work, the date, and the duration of each activity.

Action: Retain all digital and physical receipts. If you receive an allowance, check the ATO’s 2025/26 Reasonable Travel Amounts (updated annually in July) to see if your claims fall within the “no-receipt” limits. 

ATO: Travel expenses you can claim

Investment Property & Capital Gains Tax

Repairs vs Improvements: 

Repairs (fixing broken items) are deductible in the year incurred. Improvements (renovations) are capital works and must be depreciated. Initial repairs to fix defects existing at purchase are capital, not deductible. 

CGT and contract dates: The CGT event is triggered on the contract date, not settlement. If held for over 12 months, a 50% CGT discount generally applies. 

Depreciation reports: For rental properties, a quantity surveyor’s report is essential to claim structural and fixture depreciation. 

Action: Consider completing and paying for repairs before 30 June 2026. Sale contracts will need to be signed before 30 June if you want the gain/loss in this financial year. 

ATO: Rental properties – repairs and maintenance

Holiday Homes – Key Tax Rules (2025/26)

The “genuinely available for rent” test. The ATO scrutinises whether a property is truly on the market. Red flags include advertising only by word of mouth or in low-visibility channels, setting rent well above market rates, blocking out peak periods for personal use, or imposing unreasonable conditions (e.g. no children, no pets, personal approval of all tenants). Properties failing this test may have all deductions denied for those periods. 

Action: Collate your records now:  days rented, days used privately, days available for rent, and all expense receipts. Bring these to your tax appointment so deductions can be correctly apportioned.

ATO: Holiday homes 

Income Protection Insurance

Premiums paid for income protection insurance held outside of superannuation are generally tax-deductible. This deduction does not apply to policies held inside superannuation.

If your policy is bundled with Life Insurance or Total and Permanent Disability (TPD) insurance, only the income protection component is deductible. Your insurer usually provides a breakdown of these costs in your annual statement.

Action: If you pay your premium annually, ensure payment is made before 30 June 2026 to claim the deduction in this financial year.

ATO: Income protection insurance

Charitable Donations

Donations of $2 or more to organisations with Deductible Gift Recipient (DGR) status are tax-deductible. Not all charities hold DGR status, so it is important to verify before making a claim.

Action: Ensure you have receipts for all donations made this financial year. To check if an Australian charity is a Deductible Gift Recipient (DGR), search the ABN Lookup tool by name or ABN and check the “Deductible gift recipient status” section.

Businesses: Tax Guide 2026

Instant Asset Write-Off: $20,000 Threshold

For 2025/26, small businesses with an aggregated annual turnover below $10 million can immediately deduct the full cost of eligible assets costing less than $20,000 each. The asset must be installed and ready for use before 30 June 2026; just ordering or paying for an asset is not sufficient.

Action: If you need equipment costing under $20,000, consider purchasing and installing it before 30 June 2026. Keep invoices and installation records.

ATO: Instant asset write-off

Small Business Depreciation Pool

Eligible assets costing $20,000 or more are allocated to the small business general depreciation pool, deducted at 15% in the first year and 30% per year thereafter on the diminishing value. If the pool balance falls below $20,000 at year-end, you can write off the entire remaining balance.

Action: Ensure all new eligible assets are correctly allocated to your depreciation pool. Review the pool balance before 30 June 2026.

ATO: Small business depreciation pool

Prepay Deductible Expenses

On a cash basis of accounting, prepaying deductible business expenses (such as rent, insurance, and subscriptions) before 30 June 2026 brings those deductions into this financial year. On an accrual basis, speak with your accountant to understand what applies.

Action: Review upcoming deductible expenses and consider prepaying eligible items before 30 June 2026

ATO: Prepaid expenses

Deferral of Income

Where your cash flow permits, deferring the invoicing of completed work or the recognition of income until after 30 June 2026 shifts taxable income into the next financial year. This strategy requires careful planning and is not always possible depending on your accounting method.

Key considerations:

• Cash flow vs. tax savings: Delaying invoices means delaying your actual cash coming in. Ensure you have enough cash in the bank to cover your June/July overheads if you choose to wait.
• Future tax brackets: Only defer income if you expect your tax rate to be the same or lower next year. If you expect a massive 2027, “pushing” more income into that year could actually push you into a higher tax bracket, costing you more in the long run.

Action: Review outstanding invoices and discuss with your accountant whether income deferral is appropriate and achievable given your circumstances.

ATO: Assessable income accounting methods 

Write Off Bad Debts

On an accrual basis, if a customer owes you money that you have a genuine belief will not be recovered, you can claim a deduction by formally writing off the debt before 30 June 2026. The debt must have been previously included in assessable income.

Action: Review your aged debtors list. Formally document and write off any irrecoverable debts before 30 June 2026.

ATO: Deductions for unrecoverable income

Superannuation for Employees: Payday Super Commences 1 July 2026

Payday superannuation commences from 1 July 2026. From that date, all employers will be required to pay employee super contributions at the same time as wages are paid, not quarterly as is currently the case.

Cashflow warning: Super contributions for the quarter ending 30 June 2026 will generally be due by 28 July 2026. Combined with the new payday super obligations taking effect simultaneously, this has the potential to significantly strain business cashflow. Be prepared well in advance.

To claim a tax deduction for June quarter employee super contributions in the 2025/26 year, contributions must be paid and receipted by the fund on or before 30 June 2026.

Action: Consider moving to monthly super remittances from April 2026 to smooth your cashflow ahead of the payday super transition. Speak with your accountant to model the cash flow impact.

ATO: About payday super 

Fringe Benefits Tax (FBT)

If you provided non-cash benefits to employees or their associates during the FBT year (1 April 2025 to 31 March 2026), you may be required to lodge an FBT return. The self-lodgement deadline is 21 May 2026. Benefits subject to FBT can include:

• Motor vehicles made available for private use (including certain utes)
• Entertainment (meals, events, recreational activities)
• Housing or accommodation
• Payment of private expenses, such as school fees or private health insurance
• Private use of company assets, such as boats or caravans

Action: Speak with your accountant immediately if you are unsure whether FBT applies to your business.

ATO: Fringe benefits tax rates and thresholds

Trust Distribution Resolutions

Trustees must decide how to distribute trust income and formally document that decision in a resolution before 30 June 2026. Failure to do so means the trustee, rather than the intended beneficiaries,  may be assessed at the top marginal tax rate.

When distributing income to adult children, trustees must ensure the arrangement satisfies the requirements of Section 100A, which targets reimbursement agreements where a lower-taxed beneficiary receives income, but the economic benefit flows to someone else.

Action: Prepare, sign, and date trust distribution resolutions before 30 June 2026. Speak with your accountant about Section 100A compliance if you are distributing to adult children or non-arms-length beneficiaries.

ATO: Trust income losses and capital gains

ATO: Section 100A

Division 7A: Company Loans

If you have borrowed money from your private company, the loan must be supported by a written loan agreement and a minimum yearly repayment (MYR), including interest at the ATO’s benchmark rate, must be made before 30 June 2026. The benchmark rate for 2025/26 is 8.37%.

Consider the tax implications of paying dividends from your company before 30 June 2026, including the use of available franking credits to reduce the effective tax rate for shareholders.

Failure to make the MYR results in the shortfall being treated as an unfranked deemed dividend, assessable to the borrower.

Action: Review all outstanding Division 7A loans with your accountant. Confirm the minimum repayment required and make payment before 30 June 2026. Also consider whether declaring a dividend is advantageous before year-end.

ATO: Loans by private companies

ATO: Division A benchmark interest rate 

Professional Firm Profits (PFP)

If you operate a professional services firm, the ATO has specific guidelines governing how profits are to be allocated between principals and related entities or family members.

These rules are designed to ensure that income generated by the skills of individual professionals is returned to those individuals and not arbitrarily streamed to lower-taxed entities or family members.

Action: Speak with your adviser to review how profits are being allocated within your professional practice and ensure the arrangement complies with the ATO’s guidance.

ATO: Assessing the risk–allocation of profits within professional firms

Government Grants

Both federal and state governments offer a range of grants, rebates, and incentive programs for eligible businesses. 

Unless a grant is specifically declared as “Non-Assessable Non-Exempt” (NANE) by the government, it is taxable. You will pay tax on the grant at your marginal rate or company tax rate.  

Action: Review every deposit into your bank account from a government body (Federal, State, or Local Council) and check the agreement to confirm if the grant is “Assessable Income” or “NANE.

ATO: What to include in your business’s assessable income   

Looking ahead: Tax guide for 2026/2027

The 2026-27 Federal Budget, handed down on 12 May 2026, contains a number of significant changes that will affect individuals, investors and businesses in the coming years. While none of the measures below impact your 2025-26 tax return, some require decisions to be made now, particularly around property and investments.

You can read our full Federal Budget 2026/2027 report here, and we’ve outlined some key changes below.

Income tax cuts

From 1 July 2026, the tax rate on income between $18,201 and $45,000 will drop from 16% to 15%, and again to 14% from 1 July 2027. No action is required, but it is worth factoring into cash flow and salary packaging arrangements for the year ahead.

$1,000 instant deduction for work-related expenses

From 1 July 2026, Australian residents will be able to claim a standard $1,000 deduction for work-related expenses without substantiation. If your work-related expenses are likely to exceed $1,000, it is worth keeping receipts and records now so you are prepared to claim actual expenses instead.

Instant asset write-off permanently set at $20,000

From 1 July 2026, the $20,000 instant asset write-off threshold for small businesses becomes permanent. If you are a small business considering a significant asset purchase, it may be worth timing that purchase to maximise the benefit under this measure.

Limits on negative gearing

From 1 July 2027, negative gearing concessions for residential property will only be available on new builds for properties acquired after 7:30pm (AEST) on 12 May 2026. 

If you acquired or are under contract on an established residential property before this date, you are protected under the existing rules. 

CGT discount replaced by indexation and minimum tax rate

From 1 July 2027, the 50% CGT discount will be replaced by CPI indexation and a minimum 30% tax rate on capital gains. Transitional rules mean gains accrued before 1 July 2027 will still qualify for the existing discount. If you are holding assets and considering whether to sell, the timing of that decision relative to 1 July 2027 could have a material impact on your tax outcome. This is worth discussing with us sooner rather than later.

Family trust distributions: minimum 30% tax

From 1 July 2028, discretionary trusts will be subject to a minimum 30% tax on trust income. For many families, this represents a significant shift. Discretionary trusts have long been a legitimate and effective way to distribute income across family members in a tax-efficient way, and that flexibility is about to become considerably more limited.

If you currently operate through a family trust, now is the time to review your structure. The Government has indicated that rollover relief will be available from 1 July 2027 for those wishing to restructure out of a discretionary trust into a company or fixed trust, which could help minimise the CGT and income tax implications of making a change.

We’re here to help you navigate what’s next

Tax laws change. Life keeps moving. What stays constant is the opportunity to make smart decisions that set you up for the future you’re working toward. We trust you found our tax guide helpful—whether these changes affect your investments, your business or your everyday finances, the most important step is knowing what to do next and having the right team in your corner to help you get there.

At My Wealth Solutions, we’re here to turn uncertainty into clarity and help you make confident, informed decisions at every stage of your journey. Give us a call on 07 3852 4114 or request your discovery session here.

The post How to Reduce Your Tax Bill Before 30 June 2026: A Tax Planning Guide for Australian Individuals and Business Owners appeared first on My Wealth Solutions.

While acknowledging that the key to housing affordability is supply, the Government clearly sees changes to negative gearing and the capital gains tax (CGT) discount as being important pieces in the housing affordability puzzle.

The Government has called this its most ambitious budget and if the proposed measures are implemented, the impact will be felt directly by a wide cross-section of Australian society, including individual taxpayers, investors, businesses, employers and those suffering from a disability.

The year’s budget has been released against a backdrop of significant economic challenges, including global fuel price shocks, persistent inflation, rising interest rates and growing concerns around housing affordability. These themes are reflected in the measures that have been announced by the Treasurer. While the Government has announced some significant changes to the tax system, the superannuation system looks to have been left alone this year.

Budget 2026-27: at a glance

Key initiatives include:

Housing

• Changes to the tax system to reduce existing concessions for property investors.
• Extending the temporary ban on foreign purchases of established dwellings until 30 June 2029.
• An investment of $2 billion to help local governments and state utilities build infrastructure to support new housing.

Health

• Medicare Urgent Care Clinics will receive additional funding to ease the pressure on GPs and hospitals.
• Funds are allocated to list new medicines on the Pharmaceutical Benefits Scheme, including treatments for cystic fibrosis, kidney disease and various cancers.
• An additional $25 billion in funding for public hospitals.
• Reforms to the NDIS are expected to save $37.8 billion over the next four years. The scheme will be more focused on those with permanent and severe disabilities.
• Private health insurance subsidies for Australians over 65 are being cut, with savings being used to fund aged care and dementia care units.

Defence

• The defence budget will be increased by $53 billion over the next ten years.

Fuel

• A $14.8 billion package will be used to help Australia strengthen fuel supply.
• A reduction in the fuel excise and heavy vehicle road user charge will continue to apply for three months from 1 April 2026.

Important: Unless otherwise noted, the measures discussed below are only announcements at this stage. There is no guarantee that they will be implemented as per the Government’s announcements (or at all). We will keep you up to date with key developments as things progress.

Our team

The My Wealth Solutions team are available to help you understand how the budget and any enacted measures might impact on you. We can work with you to capitalise on any opportunities or minimise your risk. As always, the detail is important so please let us know if we can assist. Request your discovery session here.

Individuals and Families

A new tax offset

Start date: 1 July 2027

The Government will provide a $250 ‘Working Australians Tax Offset’ from the 2027–28 income year. The offset will be a permanent feature of the tax system and is aimed at taxpayers who derive income from work, such as employees who receive salary or wages and sole traders who carry on a business.

The offset basically operates to increase the effective tax-free threshold for income derived from work by nearly $1,800 to $19,985 (or up to $24,985 for workers eligible for the Low Income Tax Offset).

$1,000 instant tax deduction for workers 

Start date: 1 July 2026

During the 2025 federal election campaign, the Labor party committed to introducing a $1,000 instant tax deduction for work-related expenses.

On 20 April 2026 Treasury released draft legislation on this proposal for public consultation. The key feature of the proposal is that Australian residents will be able to claim a standard deduction from the 2026-27 income year onwards for work-related expenses, with the deduction being capped at the lower of $1,000 and the individual’s assessable labour income.

The normal substantiation rules would not apply when claiming the standard deduction. Charitable donations, union fees and fees relating to professional association memberships would be claimed on top of the standard deduction. Taxpayers who have incurred more than $1,000 in qualifying work-related expenses can instead choose to claim their actual expenditure as a deduction, but will need to substantiate these expenses. The draft legislation contains some other proposed changes to the tax system including:

• Depreciating assets that are mainly used to generate labour income won’t qualify for the low-value pooling rules.
• Modified rules will apply to determine the tax impact on the sale of assets used in producing labour income.
• An FBT exemption that currently applies when certain work-related items are provided to employees under a salary packaging arrangement will be removed.

Income tax cuts

Start date: 1 July 2026 

Legislation has already been passed to ensure that the 16% tax rate on taxable income between $18,201 and $45,000 will drop to 15%. The rate will then drop to 14% from 1 July 2027. This was announced in the 2025-26 Federal Budget.

Medicare levy thresholds increased 

Start date: 1 July 2025

The Government will increase the Medicare levy low‑income thresholds for singles, families, and seniors and pensioners.

• The threshold for singles will be increased from $27,222 to $28,011.
• The family threshold will be increased from $45,907 to $47,238.
• For single seniors and pensioners, the threshold will be increased from $43,020 to $44,268.
• The family threshold for seniors and pensioners will be increased from $59,886 to $61,623.
• The family income thresholds will increase by $4,338 for each dependent child or student, up from $4,216.

Investors

Limits on negative gearing 

Start date: 1 July 2027 

The term ‘negative gearing’ refers to the situation where a rental property owner claims deductions for expenses associated with holding the property that exceed the rental income that is received in the relevant income year. 

The loss that is generated from a rental property can typically be offset against other income (including salary, wages and net capital gains) to reduce overall taxable income or create a tax loss that can be carried forward to future years. 

However, the parameters around negative gearing for residential property are set to change with the Government announcing in the federal budget 2026-27  that existing negative gearing rules will only be available in connection with new builds from 1 July 2027. From this date onwards, losses from established residential properties that are acquired from 7:30pm (AEST) on 12 May 2026 will only be deductible against rental income or capital gains from residential properties. 

Excess losses will be carried forward to be offset against residential property income in future years. ‘New builds’ are residential properties which genuinely add to supply, such as dwellings constructed on vacant land and situations where existing properties are demolished and replaced with a greater number of dwellings.

Knock-down rebuilds or substantial renovations that do not increase supply will not be treated as new builds. Properties acquired before 12 May 2026 will be exempt from the changes, and the changes won’t apply to managed investment trusts or superannuation funds. Also, the changes don’t impact on other asset classes such as commercial properties or shares.

CGT discount and pre-CGT exemption replaced by indexation and minimum tax rate 

Start date: 1 July 2027 

The CGT discount has enabled individuals, trusts and complying superannuation funds to reduce the taxable capital gain made on disposal of an asset that has been held for more than 12 months. 

The standard discount rate is 50% for trusts and individuals (although lower discount rates can apply to non-residents and temporary residents in some cases), with a 1/3 discount applying to superannuation funds. 

However, from 1 July 2027 the Government is planning to revert to an indexation system based on the Consumer Price Index (CPI), much like the system that applied between 1985 and 1999.

Indexation would only be available for assets that have been held for more than 12 months. In addition to this, a minimum tax rate of 30% will apply to capital gains that accrue from 1 July 2027. There will be some exceptions to this for recipients of means-tested income support payments (eg, Age Pension, JobSeeker). 

Assets acquired before 20 September 1985 (referred to as pre-CGT assets) have historically been exempt from CGT, but this exemption will no longer apply from 1 July 2027. 

Transitional rules will limit the impact of these changes for existing investments. 

The existing CGT discount and exemption for pre-CGT assets will continue to apply the gains that accrued before 1 July 2027. Taxpayers will need to determine the value of existing assets on 1 July 2027 to enable CGT calculations to be undertaken. 

The CGT changes apply to all asset classes, including property and shares. The changes will apply to individuals, trusts and assets held by partnerships. Having said all that, investors in new residential properties will be able to choose to apply either the 50% CGT discount or cost base indexation and the minimum tax.

Minimum tax on family trust distributions 

Start date: 1 July 2028 

As part of the federal budget 2026-27, the Government has announced that a minimum 30% tax rate will apply to distributions made by discretionary trusts.

Discretionary trusts (often referred to as family trusts) have become a widely used structure for both investment and business activities. One of the key features of a discretionary trust is that the trustee is typically given the power to decide how to allocate income and capital gains made by the trust across family members and related entities.

This flexibility means that discretionary trusts can be used as an effective tax planning tool in many cases. For example, income distributed to an adult child could potentially be tax-free if the child has no other income and distributions are capped at the tax-free threshold for individuals.

However, the Government has announced that from 1 July 2028 onwards the trustee of a discretionary trust will pay a minimum 30% tax on the taxable income of the trust.

Individuals and other non-corporate beneficiaries will receive a non-refundable tax credit for the tax paid by the trustee.

The non-refundable credit will not be available for corporate beneficiaries (often referred to as bucket companies). It seems like the changes are being made partly to discourage trustees from distributing income to corporate beneficiaries.

The Government has indicated that a limited form of rollover relief will be available for three years from 1 July 2027 for small businesses and others who wish to restructure out of a discretionary trust into a company or fixed trust.

The rollover relief might help to minimise CGT and other income tax implications, but broader issues such as stamp duty will need to be carefully considered before any changes to an existing structure are implemented. The minimum tax will not apply to fixed and widely held trusts, complying superannuation funds, special disability trusts, deceased estates and charitable trusts. Some types of income such as primary production income, certain income relating to vulnerable minors, amounts that are subject to non-resident withholding tax and income from assets of testamentary trusts existing at 12 May 2026 will also be excluded.

Foreign resident CGT concession 

Start date: The first day of the next quarter after receiving Royal Assent 

The Government will provide a concession in the foreign resident CGT regime for investment in the renewables sector. The transitional arrangement will apply to foreign investors disposing of certain renewable energy infrastructure assets from the start date until 30 June 2030.

Venture capital tax incentives 

Start date: 1 July 2027

The Government will expand the scope of existing tax incentives which relate to venture capital limited partnerships and early stage venture capital limited partnerships.

Business and Employers

Instant asset write-off 

Start date: 1 July 2026 

The Government has announced that the cost threshold for the purpose of applying the instant asset write-off for small business entities will be permanently increased to $20,000 from 1 July 2026.

The instant asset write-off allows eligible small business entities with aggregated turnover of less than $10 million to claim an immediate deduction for the full cost of depreciating assets which cost less than a specified dollar threshold.

While the default threshold is $1,000, higher temporary thresholds have been implemented on a year-to year basis since 2015, often leading to confusion and uncertainty.

A permanent increase in the cost threshold to $20,000 should be welcome news to small business taxpayers who will have a greater level of confidence when it comes to investing in new plant or equipment or upgrading business assets.

In order to qualify for the immediate deduction, the cost of the asset must be less than $20,000, after subtracting any GST credits that can be claimed. The cost threshold applies on an asset-by-asset basis, so an immediate deduction could potentially apply to multiple assets that are purchased for less than $20,000 in a particular income year, even if the aggregated cost of those assets is $20,000 or more.

Assets that cost $20,000 or more can continue to be added to a small business pool. Just a quick reminder, the threshold for the current income year that ends on 30 June 2026 had already been increased to $20,000.

FBT on electric cars

Start date: 1 April 2027 

On 5 May 2026, the Government announced that the FBT exemption for electric cars would be gradually scaled back over the next few years. The FBT exemption for electric cars was introduced in the 2022-23 income year as part of a broader initiative to reduce the cost of electric vehicles and increase uptake. 

While the exemption has been phased out for plug-in hybrid electric vehicles from 1 April 2025 (with pre-existing arrangements still qualifying for the exemption in some cases), a full FBT exemption still applies to battery electric vehicles and hydrogen fuel cell electric vehicles that are provided as fringe benefits to employees if certain conditions can be satisfied. 

However, the Government is planning to progressively reduce the scope of the FBT exemption on the following basis:

• The FBT exemption will continue to operate in its current form until 31 March 2027.
• From 1 April 2027 to 31 March 2029 the full FBT exemption will only be available if the car costs $75,000 or less. Electric cars above this threshold but costing less than the luxury car tax (LCT) threshold for fuel-efficient cars will receive a 25% FBT discount.
• From 1 April 2029 all electric cars costing less than the LCT threshold will receive a 25% FBT discount. The Government indicates that existing lease arrangements won’t be impacted by these changes. When an electric car is provided to an employee and it qualifies for concessional FBT treatment under these measures it will still be necessary for employers to calculate the reportable fringe benefits amount, ignoring the application of the FBT exemption or discount. This can impact on other areas of the tax and social security systems.

Loss carry back for companies 

Start date: 1 July 2026 

For income years commencing on or after 1 July 2026, the Government will allow companies with aggregated annual global turnover of less than $1 billion to carry back a tax loss and offset it against tax paid up to two years earlier. The ability to carry back a loss will only apply to tax losses (not capital losses) and will be limited by the company’s franking account balance.

Loss refunds for small start-up companies 

Start date: 1 July 2028

Start‑up companies with aggregated annual turnover of less than $10 million that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset. The offset will be limited to the value of fringe benefits tax and withholding tax on wages paid in respect of Australian employees in the loss year.

PAYG instalments 

Start date: 1 July 2027 

The Government will provide funding to the ATO to expand its pilot of dynamic PAYG instalment calculations.

From 1 July 2027, small and medium businesses will be able to opt in to reporting and paying PAYG instalments monthly and will be able to use an ATO-approved calculation that is embedded in accounting software to calculate and vary instalments.

R&D tax incentive 

Start date: 1 July 2028 

The Government will reform the Research and Development (R&D) Tax Incentive which provides a tax offset for eligible companies that undertake R&D activities. 

While the Government is planning to increase the tax offset rate for core R&D expenditure, supporting R&D expenditure will no longer qualify and the minimum amount of expenditure that must be incurred in an income year to qualify for the offset will be increased from $20,000 to $50,000 (with some limited exceptions).

Minimum tax for multinationals 

Start date: 1 January 2026 

The Government will amend Australia’s global and domestic minimum tax legislation as part of broader reforms to the international corporate tax system.

Government and Regulators

Protecting the tax system against fraud

Start date: 1 July 2026

The Government will provide $86.3 million over four years to help detect and prevent fraud in the tax system. The Government will also strengthen the ATO’s ability to combat fraud by tax agents and other intermediaries.

The ATO will be given powers to pause the recovery of tax debts of taxpayers who are victims of fraud by tax intermediaries, and waive those debts in appropriate circumstances, and to recover the debts from the tax intermediaries. The ATO will undertake additional targeted compliance activities to further address fraud in the system, including in relation to the R&D Tax Incentive.

The Economy

Global tensions 

The conflict in the Middle East has triggered substantial economic and energy disruptions across the world, driving global inflation higher, global growth lower, and compounding uncertainty and volatility. The impacts on the Australian economy will be felt for some time.

Growth 

Higher inflation is expected to impact on growth in real incomes and household consumption. As a result, growth in the Australian economy is forecast to slow from 2.25% in 2025-26 to 1.75% in 2026-27.

Growth in the Australian economy is expected to increase to 2.25% in 2027-28.

More deficits to come 

The budget deficit for 2026–27 is forecast to be $31.5 billion, which represents an improvement of $2.8 billion compared to the Mid-Year Economic and Fiscal Outlook (MYEFO). The budget is projected to return to balance in 2034–35 and a surplus of 0.8% of GDP in 2036–37.

Debt 

Gross debt is estimated to reach $1,051 billion (that’s over $1 trillion) at 30 June 2027. This represents 34% of GDP. This figure is expected to increase to $1,249 billion (35.6% of GDP) at 30 June 2030. Net debt in 2026–27 is expected to be 19.9% of GDP. Interest payments on Australian Government Securities are estimated to be $27.7 billion in 2026–27, increasing to $40.4 billion by 2029–30.

Employment 

The unemployment rate has been broadly stable over the last year and is expected to remain relatively low by historical standards. The unemployment rate is expected to rise gradually from 4.25% in the June quarter 2026 to 4.5% in the June quarter 2027. Employment is forecast to grow by 1.5% through the year to the June quarter 2026 and the June quarter 2027 and 1.75% through the year to the June quarter 2028.

Wages 

The Wage Price Index is forecast to grow by 3.25% through the year to the June quarter 2026, before increasing to 3.5% through the year to the June quarter 2027 and the June quarter 2028. The recent increase in inflation is expected to result in a decline in real wages over 2025–26. Real wages are forecast to grow again in 2026–27 and 2027–28 as inflationary pressures ease.

Inflation 

Headline inflation is forecast to be 5% through the year to the June quarter 2026. Headline inflation is forecast to decline to 2.5% by the June quarter 2027, but this is based on the assumption that global oil prices will ease over 2026-27, which remains to be seen.

You can read the full budget breakdown here.

Is the Federal Budget 2026–27 Time to Rethink Your Financial Strategy?

If any of the federal budget 2026-27 has you thinking about your own finances, that’s probably a good sign it’s time to have a conversation. Our discovery session is free, no-obligation and a great first step toward making sure you’re in the best possible position as these changes roll out. Request your discovery session here.

The post Federal Budget 2026–27: What It Means for You appeared first on My Wealth Solutions.

• Spend less than you earn to build savings
• Start investing early
• Avoid high-interest debt
• Have an emergency fund

So why do so many smart, capable people still feel stuck, stressed or uncertain about money?

Because personal finance is rarely about intelligence or information. It is about behaviour.

Why mindset matters more than maths

Money decisions are made by humans, not calculators. They’re influenced by fear, confidence, habit, identity and emotion. Two people can earn the same income, have access to the same advice and face the same market conditions, yet end up in completely different financial positions. The difference isn’t some kind of inherent, superior knowledge – it’s behaviour over time.

This is why understanding the psychology of money matters. How you think about money, how you react under pressure, and the habits you repeat year after year often have a bigger impact on your financial future than the specific investments you choose.

We’ve probably all heard about abundance mindset vs scarcity mindset, which drive the beliefs you have about your life and money. However, there is even more to it than just those two concepts.

Becoming aware of your financial behaviour is not about judgement. It’s about creating choice and change through getting an insight into yourself and how you think about money.

What is the psychology of money?

The psychology of money explores how our thoughts, emotions, beliefs and lived experiences influence the way we earn, spend, save, invest and plan.

In theory, money decisions should be logical. In practice, they’re shaped by:

• emotional responses like fear, excitement, shame or optimism
• habitual patterns formed over years or decades
• subconscious beliefs picked up in childhood
• social comparison and cultural expectations.

This is why people can act against their own long-term interests while fully understanding the consequences. It’s also why behaviour tends to repeat unless something interrupts the pattern.

Some key concepts that sit within the psychology of money include:

• Money scripts:  These are the unconscious money beliefs we hold, often formed early in life. Examples include “money is always stressful”, “rich people are greedy”, or “you should enjoy money while you can”. Scripts like these can influence decisions powerfully, often at a sub-conscious level.
• Emotional spending and saving:  Money is often used to regulate emotion – spending to feel better, saving to feel safe, or avoiding money entirely to reduce anxiety.
• Financial identity: How you see yourself financially matters. If you identify as “bad with money” or “not an investor”, you are more likely to act in ways that reinforce that identity.
• Delayed gratification: The ability to prioritise long-term outcomes over short-term comfort plays a major role in financial resilience and building wealth, yet it is one of the hardest skills to develop consistently.

None of these concepts are flaws. They’re human. The goal is not to remove emotion from money, but to understand how it shows up in your decisions.

Common money behaviours and where they come from

Most financial behaviour sits on a spectrum rather than at an extreme. Many people move between patterns depending on life stage, stress levels or external events.

Some common examples include:

Risk aversion and risk chasing

Risk-averse behaviour often shows up as holding too much cash or avoiding investment altogether, driven by fear of loss or past negative experiences. Risk chasing can look like jumping into speculative investments or constantly switching strategies in pursuit of higher returns.

Overspending or over-saving

Overspending is not always about lack of discipline. It can be tied to stress relief, identity, reward or social pressure. Over-saving can be driven by fear, uncertainty or a need for control, sometimes at the expense of enjoyment or balance.

Procrastination and impulsiveness

Putting off decisions like increasing super, reviewing insurance or creating a plan can feel safer than confronting uncertainty. Impulsive decisions often arise during emotional highs or lows, when long-term thinking is harder to access.

Avoidance and obsession

Some people avoid looking at their finances entirely because it triggers anxiety or shame. Others check balances, markets or accounts constantly, which can increase stress without improving outcomes.

These patterns are rarely random. They are shaped by early experiences, family attitudes, cultural messages and personal history. Growing up with financial instability can create hyper-vigilance or avoidance. Growing up with comfort can lead to optimism or risk tolerance. Neither is inherently right or wrong.

Understanding your pattern helps you decide whether it is still serving you.

How early experiences shape your money mindset

Our first exposure to money usually happens long before we earn any.

Children absorb how money is discussed, argued about or avoided. They notice whether money feels scarce or abundant, whether it creates tension or security, whether it’s something to enjoy or something to fear.

Common influences include:

• whether money was openly discussed or treated as taboo
• how financial stress was handled in the household
• cultural beliefs about success, security and status
• early experiences of financial loss or instability, or lack of financial wellbeing
• the level of financial experience your parents brought to the table

These childhood experiences quietly shape expectations and behaviour in adulthood. Many people are running old financial programs without realising it. Even more interesting, what you learn from your parents may be completely different from the money behaviours they practiced; for example, your parents may have had great savings habits but your experience of money while growing up actually taught you a completely different approach to saving.

Awareness allows you to separate past experiences from present reality.

The cost of emotional decision-making

Emotion is unavoidable in money decisions. The problem arises when emotion is unexamined and unchecked.

Some of the most costly financial mistakes are behavioural, not technical.

Panic selling during downturns

Market volatility triggers fear. Selling in response to short-term drops can lock in losses and undermine long-term plans. Unfortunately, loss aversion is one of the strongest drivers of human behaviour, and we fall for it regularly. It’s helpful to understand that the stock market has historically come back stronger, and those who sell miss out on making back their money.

Ignoring finances due to shame or overwhelm

Avoidance often leads to missed opportunities, higher costs or delayed action that becomes harder to unwind later.

Chasing short-term wins

Hype-driven decisions, especially during strong markets, can increase risk and disappointment when reality catches up.

A distorted view of your financial situation

Money dysmorphia is a psychological term referring to having a distorted perception of your finances, which is actually in conflict with reality. For some, this might look like unnecessary restrictions on spending out of fear of being broke, or the opposite side of the spectrum: spending big on luxury items using credit cards, while earning a low income.

Over time, the impact of these behaviours has a compounding effect on your financial success.  Consistent steps forward towards a healthy money mindset is one of the most underrated drivers of better financial outcomes.

How to change your money mindset & switch off your financial autopilot

Changing financial behaviour does not require willpower alone. In fact, relying on willpower often fails.

More effective approaches focus on awareness, structure and environment.

Identify emotional triggers & biases

Notice when money decisions feel reactive. Stress, fatigue, comparison and major life changes often amplify emotional responses. Pay attention to when you have the urge to spend money, or if you feel fear about spending, and identify what might be driving those feelings. Remember, many people need help to overcome their biases or triggers, so don’t be afraid to reach out to financial counsellor or financial adviser if you need to.

Create awareness through reflection

Try tracking your spending to get a clear picture of what is actually happening. It can be helpful to write or journal about your financial decisions to reveal patterns or money thoughts you may not notice otherwise. Remember, the goal is insight, not self-criticism.

Automate where possible

Automate regular payments and savings by setting up bank account transfers. This reduces the need to use psychological tricks to strengthen your motivation, or trying to remember to save. Savings, investments and bill payments that happen automatically are more likely to stay consistent.

Align money with values

Set financial goals that are connected to what matters most to you personally. These tend to be more sustainable than abstract targets. Values-based goals provide motivation beyond numbers.

Replace guilt with curiosity

It’s so easy to feel bad about making financial decisions that didn’t work out, but financial setbacks happen. Reflecting on what happened and why is far more productive than self-blame – and better for your mental health!

Professional advice supports better behaviour

One of the most valuable roles of financial advice is behavioural support.

A financial advisor can help by:

• providing perspective and stability during periods of uncertainty or emotional stress
• helping translate long-term intentions into structured, practical steps
• acting as a sounding board when emotions are influencing decisions
• provide clarity and confidence on big financial decisions, such as real-estate investing
• showing you what is actually possible, enabling you to safely challenge your scarcity mindset or biases
• offering accountability without judgement

For many people, knowing they are not making decisions in isolation reduces anxiety and improves follow-through. Advice becomes about both the strategy, and supporting the behaviour required to stick with that strategy until it pays off.

Your money mindset doesn’t have to stay frozen, and neither does your financial future.

Doing well financially is about awareness, consistency and adaptability, as well as making wise decisions day after day.  Understanding how you think and behave around money gives you the power to choose differently. 

Building financial confidence starts with knowing yourself.   And the good news is this – your financial mindset can change. Which means your financial behaviours or money habits can too. Rather than let your financial patterns become a self-fulfilling prophecy, it’s time to take small but steady steps towards a healthier mindset and your own version of financial success.

The post Why Your Money Mindset Matters appeared first on My Wealth Solutions.

Business advisory services are part of a broader set of professional services that help you make smarter financial decisions, optimise your operations, and align your business with your long-term goals. Whether you’re in start-up mode or steering a multi-generational family business, the right support can help you unlock growth opportunities, reduce risk, and focus your energy where it counts.

Business advisory can be tailored to you. It spans planning, forecasting, structuring and strategy – and also includes virtual CFO services and private advisory for clients with more complex needs, including family-owned businesses navigating succession, intergenerational wealth, and wealth extraction strategies.

In this guide, we’ll cover:

• what business advisory actually is and what it includes
• what a business advisor does
• who can benefit from business advisory
• how it contributes to a successful business
• how accounting fits into the picture
• and whether it’s worth the investment

What is business advisory?

Business advisory refers to a comprehensive approach to improving the way your business operates. It combines financial, operational and strategic support to help business owners strengthen performance and build sustainable growth.2
While this kind of business consulting includes elements like financial advice and cash flow management, it’s broader than just numbers. It involves understanding your goals, assessing your current setup, and guiding you toward outcomes that align with both your personal and business aspirations.
This can include:

• strategic business planning and goal setting
• cash-flow forecasting and modelling
• tax structuring and planning
• financial reporting and analysis
• advice on business valuations, exit strategies and succession
• access to a Virtual CFO
• collaboration with your accountant, bookkeeper or internal finance team
• support through business restructuring, pivots or growth phases

The role of a business adviser is to bring valuable insights, financial planning, and a structured approach that helps you move forward with confidence, whether you’re looking to grow, stabilise, or plan your exit.

What does a business advisor do?

A business advisor plays a key role in translating complex data and big-picture ideas into clear, actionable plans. They act as your sounding board, your strategist, and your finance-savvy guide.

Here’s how they help in practical terms:

Strategic planning

Advisors work with you to develop a tailored strategy that aligns with your business objectives, business growth goals, and the realities of your business landscape. This is particularly important when going through pivotal times such as capital raising, digital transformation, or team restructures.

Financial insights and modelling

By analysing your revenue, expenses, and projections, they help you assess the financial impact of key decisions, such as mergers and acquisitions, before you make them.

Business structuring and compliance

They ensure your business structures supports tax efficiency, liability protection and future planning. Whether you’re a sole trader, company or trust, your setup needs to evolve as your business does.

Cash-flow forecasting and reporting

One of the most vital aspects of financial performance is liquidity and cashflow management. Advisors help you stay ahead of incoming and outgoing funds, find operational efficiencies, and avoid sudden crunch points.

KPI tracking and performance reviews

They identify what performance metrics to measure and how, so you can pursue continuous improvement, not just busy work.

Risk management and contingency plans

Navigating today’s regulatory environment means anticipating risk and building buffers. Advisors help develop clear, practical financial risk mitigation strategies.

Succession planning and exit strategy

If your long-term goal includes stepping back or selling, they help you build a business that runs smoothly without you, maximising value and reducing stress.

Access to a Virtual CFO

Not ready for a full-time CFO? Virtual CFO services give you executive-level oversight, performance analysis, and tax strategies, without the overheads.

Private advisory for complex needs

For family-run businesses or high-growth enterprises, specialised support can cover wealth extraction, succession, and intergenerational wealth planning.

Where does accounting fit into business advisory services?

Accounting is a foundational part of business success but it’s only one piece of the puzzle. Traditional accountants focus on historical data: lodgements, tax compliance, reconciliations and reporting. All essential, yes, but not forward-looking.

>Business advisory builds on accounting by helping you use those financials to drive your next move. Advisors take your numbers and turn them into strategy. That might include:

• forecasting revenue and expenses for future planning
• identifying trends across your financial statements
• making decisions on reinvestment or cost control
• structuring income and expenses for tax efficiency
• offering tailored financial services across both business and personal wealth

Put simply: accounting tells you where you’ve been. Advisory helps you decide where to go next.

Why business advisory drives business success

Business advisory services can add value at almost every stage of business, including:

• Start-ups
  Lay the right foundations, avoid common traps, and set up systems that grow with you.
• Small business owners
  Step out of the weeds, get strategic, and make space for real momentum.
• Sole traders
  Move from surviving to thriving, with better pricing, structure and support.
• Family businesses
  Navigate roles, succession planning, wealth extraction, and management dynamics with objectivity and care.
• Established businesses in transition
  If you’re scaling, pivoting, selling or preparing for change, advisory helps reduce risk and increase stability.

Here’s what you really get from advisory:

• financial advisers or advisory accountants who understand your numbers and your goals
• an external perspective to spot blind spots and assess opportunities
• a focus on both short-term fixes and long-term plans
• a team with the experience to navigate complex challenges
• advice that connects business to personal wealth outcomes
• support building your solid business plan, not just reporting on what’s happened.

It’s not about outsourcing control. It’s about surrounding yourself with strategic advisors who help you make smarter, faster, more effective decisions.

Is business advisory worth the investment?

When done well, advisory consulting services provides good return on investment:

• cost savings through better structures and systems
• profit improvement through smarter pricing and efficiency
• avoiding compliance risks, late fees and poor financial planning
• reduced stress at key pressure points like tax time, hiring, or expansion
• improved customer satisfaction and team productivity through clearer direction

And beyond the spreadsheets, there’s something just as valuable: clarity. You stop second-guessing and start making confident, well-informed moves, backed by real data and professional advice.

The post What Is Business Advisory (And How It Can Help Your Business Thrive) appeared first on My Wealth Solutions.

You book an appointment with a financial advisor – questions in hand, goals in mind, maybe even a spreadsheet or two.

Then comes the dreaded f-word: fees.

And just like that, your enthusiasm gets replaced with uncertainty.

What exactly am I paying for? Is this just a sales pitch in disguise? Will this actually help me get ahead?

If that sounds familiar, you’re not alone. Financial planner fees – particularly different structures, splits, and how they are paid – can be confusing.

In this article, we’ll unpack:

• What financial advice fees actually cover
• How different fee structures work
• What value looks like and how to judge it
• How to tell whether the cost of advice is worth it

Who financial advice is (and isn’t) for

We’re talking about tailored advice, often ongoing, that involves a financial adviser working with you to set up systems and processes. This is often best for those who have more complex financial situations, goals, or big decisions that could impact you long-term.

Most people find value in financial advice, but you have to strike a positive balance between how your finances are improving, and how much you’re paying for advice. Financial advice can be expensive – mostly because of the high regulatory costs – and therefore traditional ongoing advice isn’t that affordable for many people who need it. 

Advice typically adds the most value when you:

• Have multiple goals competing for cash flow
• Have a complex tax situation
• Are making large decisions or facing major changes that have long-term consequences
• Have significant cashflow and need guidance on building something that lasts
• Are time-poor or prone to poor decisions, and require assistance managing assets or income
• Planning retirement and needing a strategy

While we at My Wealth Solutions try to keep our advice as affordable as possible, there are still many situations where it isn’t in your best interest for us to provide advice, for example, because the cost to you may take too long to recoup. For those with very simple finances, or needing advice with short-term or single-issue decisions, full advice is often not needed at that time. Sometimes one-off, or general advice, is more appropriate in these circumstances. 

The best way to know? Give our team a call. We are committed to always being honest with you about if we can help and what kind of advice would be best for you.

Why financial advice fees feel confusing

There’s a long history of people feeling unsure – even suspicious – about financial advice fees. For years, advice was often bundled with financial products, and many advisors were connected with banks or institutions and gave biased advice. Commissions, incentives and vague pricing weren’t unusual, and many providers gave advice that wasn’t independent or based on best interest – but was linked with those incentives.

There were many advisers still working with integrity for their clients, with our firm being started because our founders wanted a better way to serve clients. 

Following the Financial Services Royal Commission, which ended in 2019, financial advisers in Australia are now held to higher standards. However, the legacy of biased advice and product-pushing has stuck around in public perception, even as the industry has gone through some big changes. 

Financial advisers are now required by law to:

• Act in their clients’ best interests under law
• Disclose all fees clearly and upfront
• Avoid conflicts of interest related to product commissions
• Provide ongoing advice agreements with documented services.

With clearer expectations and a behavioural standard to hold advisers to, you can expect a good adviser to be able to:

• Explain fees transparently and make it very clear what you’re paying for
• Not push products on you, but provide recommendations based on research and clearly explain why these recommendations were made
• Take their time to ensure you understand the plan 
• Have a system for reviewing the plan on a regular basis, taking your changing circumstances into account
• Be able to speak to results and deliverables beyond investment earnings
• Be able to answer questions or make adjustments to the plan based on your feedback 

The focus has shifted from product sales to client strategy. But that doesn’t mean everyone feels comfortable with the idea of paying for financial advice – especially if it’s not clear what you’re actually getting for the money.

The different types of financial advice fees

So, how much does financial advice cost in Australia – and how does it all work?

Here’s a breakdown of the most common types of fees and what they usually include.

Initial financial planner advice fee

This one-off fee, also known as a Statement of Advice (SOA) fee, covers the development of a personalised financial plan. This is usually the first cost to you, if you visited an adviser who provides a free initial consultation. This includes:

• A comprehensive fact-finding session
• Review of your current financial position
• Strategy development and scenario modelling
• Quoting, comparison, and recommendations of risk and product options
• Preparation and delivery of a comprehensive Statement of Advice (SOA) with tailored recommendations

This fee typically ranges from $1,000 to $5,000 or more depending on the complexity of your situation.

Implementation fee

The implementation fee follows your approval and agreement to the Statement of Advice, and this one-time fee covers initial setup of bank accounts, investment strategies, insurance implementation and more. 

This fee is often not repeated, unless significant changes occur in your personal circumstances. Situations like divorce, for example, might require considerable changes to your accounts and structure which may incur additional new implementation fees down the line. 

Your implementation fee may be required up-front, and can span from $2,000 to $7,000 depending on the complexity of your plan and financial structures.

Ongoing financial advice fee

After the initial plan is in place, ongoing fees cover:

• Regular strategy reviews
• Adjustments to reflect life changes
• Monitoring and tracking progress
• Access to your advisor for questions and decision-making.

These fees are often charged annually or monthly and range from around $2,000 to $10,000+ per year depending on the level of support and complexity.

The average ongoing advice fee in 2025 was $4,668, a sharp increase of 18% from 2024’s average. This is because many advisers are focussing on more complex client needs or high-value clients as the cost of providing advice continues to increase.

Flat financial planner fees vs percentage-based fees

Many financial planner firms offer flat fees, which are based on the scope of work and level of complexity – not on how much money you have. This approach is often seen as more transparent and aligned with client interests.

Flat fees can be based on a package style service offering, or a tailored ‘fee for service’ structure, where you are quoted a fee based on the strategies being in place. These fees stay consistent over time, unless your plan undergoes significant changes and is requoted.

Some firms use percentage-based fees, especially when managing investments. For example, an annual fee of 0.8 per cent on $500,000 would be $4,000. If the adviser you’re considering working with uses percentage-based fees, it’s important to find out what that percentage is in actual dollar amounts, and how that compares to the value you’re receiving. 

Some firms use a combination of fee for service and percentage-based fees. Usually, this would only occur when managing significant wealth and assets.

One-off, Hourly or fixed project fees

Some advisories provide one-off or project advice, which is a good option for those who need single-issue advice or who have more simple financial situations. Usually a one-off fee would apply, and in some cases, the firm might use an hourly rate. These rates generally range from $250 to $500+ depending on work completed.

Tip: All fees should be disclosed clearly and explained before you agree to proceed. If it’s not clear what you’re paying for – ask.

How financial advice fees are paid

Financial advice fees are usually paid in two different ways. First, from cashflow through a direct deposit / direct debit or invoicing method. Second, from superannuation or investment accounts through an authorisation process. Many advisers will use a combination of these sources, depending on your financial situation, cashflow and what would suit your finances best.

If your advice involves tax advice, or producing a taxable income, that portion of your fees may be tax-deductible. Your adviser can provide you with guidelines as to how much of your fee could be tax-deductible.

Financial advice vs investment management

‘Financial advice’ usually refers to a holistic approach to financial planning, rather than a specialisation or focus on one element of your finances. The reason holistic advice is so valuable, is that it can include many or most of the focussed elements and integrates them into a cohesive whole story that moves you in the direction you want to go.

Financial advice is therefore a lot more than just picking investments. With a ‘whole-of-life’ strategy approach, short, medium and long-term goals are taken into account, your financial structures and tax planning are put to the test, and financial decisions are sequenced to occur with the right timing and level of investment. 

Some financial advisers do focus on investment management, with expertise in building and managing your investment portfolio. These firms make their focus very clear and they often work with high-net-worth individuals with a high investment potential.

Wealth managers can include a number of lifestyle considerations, particularly in regards to how your portfolio will be utilised for non-investment wealth-building, philanthropy, estate planning, or family office structures. However, investment management rarely strays from the purpose of growing and maintaining your portfolio. 

What you’re really paying for

It’s easy to assume financial advice is just a one-off meeting and a document but, in reality, it’s much more involved.

Good advice takes time, skill, research and planning. It’s a professional service – like legal or medical advice – and it’s tailored to your personal situation.

Here’s what financial advice fees usually cover:

• Time and expertise
  Advisors must meet strict education and professional standards. They spend significant time analysing your situation, running financial models, and building tailored strategies.
• Strategy development
  Your financial goals are mapped out into a practical, step-by-step plan that includes budgeting, investing, super, insurance, tax, retirement planning and more.
• Research and comparisons
  Whether it’s choosing an insurance policy, comparing super funds, or reviewing investment options, a lot of time goes into researching what will work best for you.
• Compliance and documentation
  Financial advice in Australia is tightly regulated. Advisors must produce thorough documentation, keep detailed records, and ensure their recommendations meet legal obligations.
• Ongoing reviews and support
  Life changes – and your financial plan should too. Ongoing advice fees cover regular reviews, strategy tweaks, and check-ins to keep things on track.
• Clarity and confidence
  One of the biggest value drivers isn’t something you can hold – it’s peace of mind. Having someone guide you through big financial decisions can reduce stress and increase confidence.

Questions to ask about financial advice fees

• What services are included in the fee?
• How often will my plan be reviewed?
• How will success be measured?
• Can the scope change over time?
• How are fees paid and reviewed?
• Are any of my fees tax-deductible?

Identifying good vs bad financial advice

Still wondering if financial advice is worth the fee? One way to think about it is by looking at what the cost of not getting advice might be.

For example:

Sarah received a $150,000 inheritance and wasn’t sure what to do with it. She considered paying down her mortgage, investing in shares, or contributing to super. Working with an advisor helped her model out each option, compare tax implications, and develop a strategy that balanced long-term growth with short-term flexibility. The result: she avoided an unexpected tax bill, gained confidence in her plan, and now expects to reach her retirement goals five years earlier than planned.

A good advisor can help you avoid:

• Missing out on tax-effective contributions or deductions
• Having the wrong level of insurance cover
• Investing based on emotion, not strategy
• Taking on unnecessary risk – or being too conservative
• Procrastinating because you’re unsure where to start.

Often, the value of advice isn’t in flashy results – it’s in avoiding expensive mistakes and making better decisions over time.

You may have seen it in the news. ASIC has launched Federal Court action against Equity Trustees, alleging failures in its role as trustee of the Shield and First Guardian Funds. The collapse of these funds has left more than 12,000 Australians facing potential losses of up to $1.2 billion.

This is one of the biggest fund failures in recent years, and it has raised tough questions about trustee oversight and how some super products are marketed.

Why it matters:

• Not all superannuation funds are created equal
• Governance failures can put investor money at risk
• Independent advice and careful fund selection is very important
• Financial literacy and education can protect Australians from dodgy operators
  

What not to do:

• Never panic-move your super – knee-jerk switching can trigger unnecessary fees, exit costs, loss of valuable insurance, or even crystallise losses.
• Don’t chase glossy promises – funds offering “guaranteed” returns or unusually high yields usually carry hidden risks.
• Don’t assume “super is super” – the label might be the same, but the underlying governance, strategy, and protections can vary widely.
• Be wary of partial advice – Superannuation-only advice doesn’t take into account other aspects of your financial life or personal insurance, which is an indicator that it may not be in your best interests.
• Be suspicious of cold-callers or ‘urgent’ messaging – Financial advice that puts your first will never rush you or use ‘fear’ to convince you to do something. They should also never ‘cold-call’ you with an offer. These are red-flags!
  

What to do instead:

• Expect an adviser to get to know your personal situation before making recommendations
• Read the SOA fine print to look for conflicted remuneration or other conflicts of interest, or commission structures. Ask questions if these are present.
• Look at what the fund is investing into, and if it is truly diversified.    
• Don’t be tempted by enormous returns or performance; double check what is reasonably expected of a diversified portfolio in the current market.
• Seek independent advice from a reputable adviser before making changes or moving money

Is financial advice worth the cost?

Paying for financial advice should never feel like a gamble. Here are some indicators that it’s delivering value:

• You understand the advice
  It’s explained clearly and in a way that makes sense to you.
• The strategy feels aligned to your goals
  It’s not about products – it’s about helping you move forward.
• Your plan is reviewed regularly
  It evolves as your life and circumstances change.
• You know what you’re paying
  The fees are clear, transparent, and documented.
• You feel more confident and in control
  You’ve gone from overwhelmed or uncertain to informed and supported.

In other words, the advice should empower you – not just tell you what to do.

Final thoughts: putting advice fees in context

Financial advice isn’t free, but the right advice, at the right time, can be worth far more than the fee you pay.

Just like you’d see a specialist for legal, health or business advice, financial advisors offer professional guidance to help you make informed decisions and avoid costly detours.

Yes, the numbers matter. But so does the impact – on your peace of mind, your goals, and your future financial outcomes.

Understanding what you’re paying for – and what you’re getting – is key to making sure the relationship delivers real value over time.

• Advice as a professional service, not a product
• Fees as an investment in clarity and outcomes
• Encouraging informed, confident decision-making
• Closing reassurance: understanding fees changes the experience

Frequently asked questions about financial advice fees

Is financial advice only for wealthy people?

No. Financial advice is not just for high-net-worth individuals. It’s most valuable for people with financial complexity, important decisions to make, or limited time to manage their finances — regardless of income or asset level. Life events such as career changes, inheritances, starting a family, or planning for retirement often trigger the need for advice.

How much does financial advice cost in Australia?

The cost of financial advice in Australia varies based on complexity and scope. Initial advice fees typically range from $2,000 to $5,000 or more, while ongoing advice fees often range from $3,000 to $10,000+ per year. One-off or project advice may be charged at an hourly rate, usually between $250 and $500+ per hour.

Can I get financial advice without paying ongoing fees?

Yes. Many advisers offer one-off or project-based advice without an ongoing fee arrangement. This may suit people who need help with a specific decision or financial plan. Ongoing fees apply only if you agree to ongoing services, such as regular reviews and ongoing strategy support.

What do ongoing financial advice fees actually pay for?

Ongoing financial advice fees typically cover regular reviews, updates to your financial strategy, monitoring progress, and access to your adviser for guidance as your circumstances change. They are designed to ensure your plan stays relevant and aligned with your goals over time, rather than becoming outdated.

Are financial adviser fees negotiable?

In some cases, yes. Financial advice fees are based on the scope and complexity of work, so they may be adjusted if the services provided change. However, quality advice involves significant professional time and expertise, so fees should reflect the level of service being delivered.

How are financial advice fees paid?

Financial advice fees can be paid in several ways, including direct invoices, deductions from investment accounts, or deductions from superannuation (where permitted). Your adviser must clearly explain how fees are paid and obtain your consent before any fees are charged.

Is financial advice worth the cost?

Financial advice can be worth the cost if it helps you make better decisions, avoid costly mistakes, and feel confident about your financial future. Value is measured not just by returns, but by clarity, tax efficiency, risk management, and progress toward your long-term goals.

What’s the difference between financial advice and investment management?

Financial advice focuses on your overall strategy — including goals, cash flow, tax, super, insurance, and retirement planning. Investment management is only one component and involves selecting and managing investments. Many people assume advice is just about investing, but the strategic guidance is often where the greatest value lies.

How do I know if a financial adviser is acting in my best interest?

In Australia, financial advisers are legally required to act in their clients’ best interests. You can assess this by checking whether fees are clearly disclosed, advice is tailored to your situation, and recommendations are explained in plain language rather than focused on specific products.

What are the warning signs of poor-value financial advice?

Red flags may include unclear fees, product-focused recommendations, limited explanation of strategy, or no regular review process. Good advice should be transparent, personalised, and focused on helping you achieve your goals — not selling financial products.

What if my financial situation is simple?

If your situation is straightforward, you may not need comprehensive ongoing advice. However, even simple finances can benefit from professional guidance at key decision points. A discussion with an adviser can help determine whether advice is appropriate and what level of support makes sense for you.

The post The Truth About Financial Advice Fees: What You’re Really Paying For appeared first on My Wealth Solutions.

Platforms like ChatGPT, AI chatbots, and robo-advisors promise fast, low-cost support. And for many people, they deliver. But when you’re thinking about your long-term goals – like retirement, home ownership, or leaving a legacy – do these tools offer enough?

As the Financial Review recently pointed out, Artificial Intelligence might be able to model a forecast or recommend an ETF, but unlike a financial planner, it can’t sit with you in a moment of uncertainty and ask, “What do you really want?”.

In this article, we’ll break down the core differences between digital and human advice. You’ll see where automated tools shine, where they fall short, and how human advisers can fill in the gaps. The goal isn’t to choose sides – it’s to help you work out what type of support fits your needs.

What is digital financial advice?

Digital financial advice is any guidance that comes from a technology platform rather than a person. It’s often algorithm-driven, using data you provide to generate answers or recommendations. These tools are built to make finance more accessible and can be especially helpful for people just getting started.

Common types include:

• Robo-advisors, which create and manage an investment portfolio based on your goals and risk appetite.
• AI chat tools, like ChatGPT or generative AI, that provide general financial explanations and answer questions.
• Budgeting apps, which help you track spending, forecast savings, and understand where your money’s going.

You provide basic information – like your income, age, goals or debts – and the platform generates advice. Sometimes that advice is detailed and useful. Other times, it’s a starting point that still requires a lot of interpretation or follow up.

What digital tools do well

For straightforward questions or short-term goals, digital tools are a solid option. They’re designed to simplify decision-making and help you take action without overcomplicating the process.
Here’s what they’re particularly good at:

1. Low-cost investment management.

Many robo-advisors offer diversified portfolios with low fees. You answer a few questions, and the platform provides investment advice, recommending a mix of investments aligned to your risk level. Some will even automatically rebalance your investment portfolio when markets shift.

2. Budget tracking and goal setting

Apps and platforms make it easy to visualise your spending, set saving targets, and check your progress over time.

3. Fast, on-demand answers

If you want to understand what a P/E ratio is or how compound interest works, AI chat tools can provide a clear, instant response.

4. Consistency and automation

Digital advice is rule based. That means it will apply the same logic to everyone, which reduces bias and makes the output consistent.

The limitations of digital advice

As helpful as these tools can be, there are some key limitations to keep in mind.

1. It can’t fully understand your life context

AI doesn’t know you’re helping a sibling with their mortgage, or that your job is insecure, or that you want to retire early and live by the coast. It uses the data you give it and nothing more.

2. It lacks emotional intelligence

Good financial decisions aren’t just about maths. They’re about how you feel when markets drop, or when your plans change. A digital tool can’t check in with you, reassure you, or help you weigh up competing priorities.

3. Answers can be generic or incomplete

Because digital platforms work from fixed inputs and pre-set rules, they often give generic responses. That might be fine for common questions, but not for more nuanced or high-stakes decisions.

4. You have to know what to ask

If you don’t know how to phrase your question – or which details matter most – you may not get the answer you need.

Real-world examples: digital vs human advice

Let’s look at a few common financial scenarios and compare how a digital tool might respond compared to a human financial adviser.

Retirement planning

Digital tool
ChatGPT might ask for your age, super balance, annual income, and risk profile. It will then suggest a savings target or reference a common rule of thumb (like the 25x Rule) to estimate how much you need.

Human adviser
They’ll ask deeper, more personal questions. What do you want retirement to look like? Do you plan to travel, downsize, or stay in your current home? Do you expect any inheritances or windfalls? They’ll factor in your partner’s situation, health outlook, Centrelink entitlements, and possible aged care needs, and then build a strategy tailored to your lifestyle and values.

Paying off debt

Digital tool
Expect a breakdown of repayment strategies: the snowball method, the avalanche method, or consolidation. You’ll get definitions and pros/cons, but no questions about your behaviour, history or mindset.

Human adviser
They’ll ask what led to the debt in the first place. What’s been difficult about paying it off? Are there emotional or relational dynamics at play? Could small lifestyle changes free up extra cash? They’ll help you design a realistic repayment plan – one that addresses both the numbers and the habits behind them.

Choosing between saving and investing

Digital tool
You’ll be told that it “depends on your time horizon, risk tolerance, and financial goals.” While technically correct, this often leaves people with more questions.

Human adviser
They’ll help you define your goals in clearer terms. What are you saving for? How much risk feels manageable for you? Do you need an emergency buffer before you think about investing? They’ll also explain the differences between asset classes and accounts so you can make informed, confident decisions.

The user experience gap

Even when digital advice is technically accurate, the experience of using it can be frustrating. You may not be sure what information to provide. You might receive a long, complex answer with no clear action steps. Or you may leave with more questions than when you started.

If your input is slightly off – or if the tool doesn’t understand the nuance behind your question – the advice could be off the mark. And unlike a conversation with a person, there’s usually no chance to clarify, reframe or dive deeper.

With a human adviser, the process is slower but the value is often far greater. They help you ask better questions, explore your options thoroughly, and follow through on your plan over time.

What human financial advisers offer

Human advisers build long-term relationships. They get to know your story, understand your values, and shape advice around the life you want – not just the numbers in front of you.
Some of their strengths include:

1. Holistic planning

They can help with super, investments, insurance, tax, estate planning and more – ensuring everything works together.

2. Personal connection

They’ll ask about your kids, your career, your health. They’ll remember past conversations and factor in life events that algorithms can’t detect.

3. Behavioural coaching

They know that managing money isn’t just about doing the “right” thing. It’s about managing fear, greed, doubt and distraction. A good adviser helps you stay on track.

4. Tailored strategy

They’ll map out a plan that reflects your real-life situation, including buffers for risk, changes in income, and future goals.

5. Accountability

Regular check-ins and updates help you stay engaged and make decisions when your life (or the market) shifts.

What they can help with
Here are just some of the areas a human adviser can support you in:

• Building a clear financial roadmap
• Optimising super contributions and investment mix
• Reducing tax liabilities through smart structuring
• Choosing and managing insurance policies
• Navigating redundancy, business ownership or career changes
• Planning for aged care or inheritance
• Coordinating with accountants or estate lawyers
• Creating back-up plans for unexpected life events.

They also bring real-world experience to complex situations – like divorce settlements, windfalls, international moves, or major asset sales.

Are there downsides to using a human financial adviser?

There are a few considerations:

• Cost: Personalised advice comes at a price. Most advisers charge either a flat fee or a percentage of assets. That said, many clients find the value easily outweighs the cost over time.
• Time commitment: Working with an adviser takes time. You’ll need to attend meetings, complete paperwork, and stay engaged with your plan.
• Availability: Good advisers may have waitlists or work with a limited number of clients at a time.

Still, for many Australians, the benefits of a long-term advisory relationship – clarity, peace of mind, and improved outcomes – more than make up for these trade-offs.

So, which option is right for you?

If you’re just getting started and want to dip your toe into financial planning, digital tools can be incredibly useful. They can help you understand basic concepts, set goals, and begin building good habits.

But if your life is complex – or if you’re planning for the long term – a human adviser can offer something no algorithm can: a real relationship.

You get tailored advice, thoughtful conversation, and someone who’s there to help when life changes. That kind of support can be invaluable – not just financially, but emotionally, too.

Final thoughts
Financial decisions are deeply personal. Whether you’re growing your wealth, protecting your family, or preparing for the next chapter, the right advice can make all the difference.

Digital tools are fast and accessible but, when the stakes are high, there’s no substitute for having someone in your corner who truly understands your life.

If you’re ready to explore your options, talk to a trusted adviser who’ll work with you to build a strategy you can believe in.

The post Can ChatGPT Give Good Financial Advice? appeared first on My Wealth Solutions.

The Answer to Your Question

As a rough guide, if you are earning over $60,000 as an individual, or $120,000 household income, or have superannuation or assets over $100,000, you’ll most likely be able to afford advice and you’ll benefit from seeing a financial planner. This might surprise you! But you should know that financial planning is not just for the wealthy. Your financial success doesn’t only depend on how much money you make, but how much you save and spend.  Deciding if professional advice is a good idea for you comes down to whether it is affordable to you or will add value to your situation.

In this article, I go into detail about:

• Why we look at value, not just assets
• Situations when you might not be ready
• Times when you should start seeking advice
• The process and cost of hiring a financial adviser
• Is a financial advisor worth it?

The Value of Advice

I mentioned ‘adding value’ earlier; this means that a good advisor must evaluate if the value they provide outweighs how much the advice costs you (keeping in mind that many financial strategies are long-term in scope). This is important not just because it’s financially wise, but also because your best interests are protected by law.

Given the rough guide provided above, most people will have some cash flow or investments to start with, which your advisor would use to create additional value and build your wealth. You might still be unsure if you have the investable assets or annual income to justify seeing a financial planner or getting help with an investment strategy. First, I recommend just picking up the phone and chatting with an advisor. They will be able to tell you pretty quickly if they can help you. Second, it is always worthwhile doing what you can on your own to build up your personal finances before seeking more comprehensive planning.

So, Are You Ready To Hire A Financial Advisor?

Now that we’ve covered some of the financial advisor costs and the level of assets you might need to get started, it’s time to make it more personal. Before hiring a financial advisor, it’s essential to assess your financial readiness. This can include your liquid assets, your willingness to take advice on financial decisions, and the type of advice you might need.

Only you can know if you’re ready for a financial advisor. Once you’ve considered your financial situation, it’s time to think about if you’re ready to set some clear long and short-term goals. It’s a good idea to hire a financial advisor if you’re ready to discuss all the details of your financial situation with someone and if you’re ready to commit to an ongoing relationship (most financial advisors don’t offer one-off advice). Here are some points I think people should consider when deciding if they are ready (yet) to hire a financial advisor:

You don’t have a lot of money or savings

If you’re just getting started in building your financial literacy or you want to save or invest small amounts of money, it might be too soon for you to hire a financial planner. Read our guide on saving and budgeting, set some personal goals and initiate a forced saving plan to reach them, put money aside into an emergency fund or other bank account, and start investing using apps such as Raiz Invest or Commsec Pocket. Even some robo-advisor tools can be very helpful at this stage, although I’ll always recommend a human advisor as you progress in your journey.

You have significant debt or you’re struggling under financial burdens

If you’re struggling with debts that make it hard to make ends meet, or need to overcome addictive behaviours such as gambling, then we recommend you see a financial counsellor as a first step. You can usually access financial counselling and budget assistance services free of charge or for a greatly reduced fee, without the same ongoing advice commitment expected by a financial advisory.  Speak to a financial counsellor through the National Debt Helpline on 1800 007 007.

You only want one-off advice

If you would like one-time advice on your financial life, a sign-off on paperwork, or a second opinion on your financial decisions, it can be difficult to find a professional who can help you. In Australia, financial planners legally cannot provide specific personalised advice outside of a process that involves meeting with you to assess your situation and putting together a financial plan for you (called a Statement of Advice). However, if you search ‘one-off financial advice’, you will be able to find advisors that offer general advice or answers to broader questions for a one-off fee.

You know it’s time to get a financial plan in place but don’t know where to start

You’re not alone. Many Australians want to devote more time to getting their finances in order and even getting help.  But choosing the right advisor can feel complicated, so it’s easy to procrastinate. The good news is, finding the right advice is not as hard as it seems.
Start by looking at the best financial advisors in Australia and what questions to ask about their services. Researching the top financial planners means that even if you don’t end up going with one of these advisors, you start to build a picture of what to look for in an advisor you can trust.  Calling an advisor or two will give you a lot of information about their pricing structure, their approach to investments, their level of customer service, and if they could help someone in your situation. Expect your financial planner to help you set realistic goals, develop a budget, choose the right investments and provide you with the education and support you need to make sound decisions and achieve your goals.

You’ve built a foundation and want to take it to the next level

If you’re at a stage where you have some assets in your name – perhaps you’ve bought a house, or you’ve been investing and saving personally for a few years, you’re probably in a very good place to take your financial strategy to the next level and start setting your future goals with the help of a financial advisor. That next step could look like planning for retirement, purchasing an investment property, planning for children’s education costs, or just wanting to make sure your family is financially protected. A financial advisor can create confidence to make informed decisions that grow your wealth and secure your future.

You’ve been managing your money alone but now you want help or accountability

Needing help isn’t a bad thing. We see people looking for money management for a variety of reasons. Perhaps they need to have their debt restructured and a strategy in place to pay it off, maybe they have no time to figure out the next steps to reach their goals, and sometimes it’s simply a desire for increased accountability to stick with a plan. There is something very powerful about having an ally working with you towards your life goals or financial goals.

You’re looking for wealth management and a protective or growth strategy

If you are managing a high income, or you’ve built a significant portfolio, it’s very wise to see an experienced financial advisor. Not only can they provide expert counsel on financial decisions and take on a lot of the time-intensive research and paperwork, but they are also indispensable in ensuring your wealth is protected. Financial professionals can help you navigate the complexities of trusts, family offices, legacy-setting and estate planning, philanthropy, or transferring assets. It’s also super important to have professional advice if you’ve suddenly come into money – like an inheritance or insurance payout. In a situation like this, the right advice can transform your financial outcomes.

The Process and Cost of Financial Advice for the Average Client

At My Wealth Solutions, we start the process with a phone call to get to know you, some brief information about your situation, and why you are looking for advice. If we can see that we can help you towards greater financial success, we book you in for your first free consultation with one of our advisors. In order to evaluate your situation and be able to share what we believe will achieve your goals, we will request a brief overview of your current finances, such as income, super and assets. Because we are a fee-for-service advisor, we can provide a fee estimate once we have discussed your personalised recommendations – this happens in that first consultation. If you decide you want to have an ongoing advice partnership, we will review your plan each year to ensure that 1) we are on track to your goals, 2) you still see value in ongoing advice, and 3) we can make any changes to your plan that are needed.

According to a report from Adviser Ratings on the 2023 Australian Financial Advice Landscape, 20% of Australians are willing to spend between $2500 and $5000 on financial advice. Though this varies from client to client, this provides a rough estimate of how much it will cost annually to have financial advisors, like our team, professionally evaluate and handle your financial affairs. Moneysmart.com has an excellent breakdown of the different kinds of fees that advisors might charge.

Unfortunately, it is true that many Australians cannot currently afford holistic financial advice, as increased compliance loads and overheads have pushed a year-on-year increase in the average cost of advice. However, it is always worth speaking to an advisor and finding out where you stand.

Is A Financial Advisor Worth It?

If you think you are ready, you might start asking yourself “Is a Financial Advisor Worth it?” or “Are Financial Advisor Fees Worth it?”.
Imagine a set of scales with the fees you’re paying on one side and the financial benefits you’re receiving on the other – benefits that might include reaching your retirement savings goal, a steady increase in your net worth, or having the money to purchase your first house or investment property. This scale should undeniably tip towards the benefits – studies into the value of advice have shown that financial planning advice can add between 1.5% and 4% in financial returns over the long term. Additionally, if you have complex financial needs or lack the time to manage your finances, a financial advisor can save you time and money.

 When time is of the essence, working with a financial advisor can save you hours of time on ad hoc tasks like coming up with an investment plan, instead you can spend that time on your million-dollar deals.

Having a professional develop a tailored plan, that matches your risk tolerance and life stage, can help you reach your financial goals faster or more securely. For example, if you are an investor that has embraced high-risk in the past but you’re now nearing your goals, a financial advisor can help translate your aggressive investment strategy into a more balanced portfolio that can preserve what you have now and avoid risking major losses.

 Did you know that Australians pay an average of $2,400 each per year on their superannuation fees which is more than $30 billion for the whole country? A financial advisor can provide superannuation fund advice to help you lower your fees, which can save you more money than you think, and ensure that you achieve your best possible retirement.

Just remember, the crucial factor that determines if a financial advisor is the right step for you is not the amount of money you possess, but rather if a financial advisor will be able to provide value to you both now and in the future. As financial advisors, we have a ‘best interest’ duty to our clients. We will evaluate if we can provide value to you that will provide returns over and above what you pay in fees.  If we can’t provide long-term benefits with our services, then we may recommend a different professional service to assist you.

However, to finish this article how I started it, most people are able to benefit from the assistance of a financial advisor and a personalised financial plan!  To find the right advisor for you, consider your unique needs and do your research to ensure you find a reputable professional who is a good fit for you.

———————–
Envestnet 2019,  estimates advisor value add at an average of 3% per year.
Vanguard 2019, , estimates lifetime value add at an average of 3%.
Russell Investments  e estimates value add at more than 4% per year).

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As difficult and often heart-breaking as this situation can be, the reality is that around 30% married couples will divorce in Australia. And these divorces can have catastrophic financial impacts (some reports say up to $870,000 per couple), so it’s really important to talk about.

In this article, we’ll explore practical strategies and insights to help you navigate the financial aspects of divorce. From when to focus on budgeting to understanding division of assets, this is an introduction to the knowledge you need to take control of your finances and build a secure future. We are dedicated to helping our clients turn this challenging chapter into an opportunity for growth and financial empowerment.

The Financial Impact of Divorce

A Forbes report highlighted financial security as a key reason for marriage, with financial stress contributing to 24% of divorces. But while many people might feel relief after a separation is done and dusted, divorce can impact their health and financial situation for years to come.

Post-divorce, individuals often face steep financial impacts. Older divorcees experience severe financial drops, with a 45% decrease in stardard of living for women and 21% for men. This can create real social issues and dramatically impact the quality of life for older men and women. The Separation Guide’s research shows divorce has a societal cost of up to $870,000 per couple!

As well as leaving both partners with technically half as much as they had before (with a 50:50 split), now the two households have twice as many bills and two individual retirements to plan for.

Research has also shown that women come out of divorce with more serious impacts than men, with a decline in household income of up to 30%. If children are involved, we can see a pattern of single-parent families with vastly reduced means (in Australia, 34% of single-parent families are in poverty).

That is why financial planning during and after divorce isn’t just about splitting assets; it’s largely about redefining your financial landscape. It involves creating a budget that works for your new circumstances, understanding how to split shared assets well, and ensuring you have a solid plan for future financial stability.

Divorce: Where to From Here?

Divorce is not just about legally ending a marriage or relationship. It’s essential to approach divorce with a clear and strategic financial plan to ensure that you are protected and can confidently move forward.

You also need to re-evaluate your financial goals to fit your new circumstances. Whether that is planning for your children’s education, securing your retirement fund, or managing day-to-day expenses, you’ll need to have a robust plan in place to make it work.

Your post-divorce financial situation may be significantly different. To understand what position you’ll be restarting life in, you’ll need to go through the difficult stage of reviewing each aspect of your finances. Work through each stage to make immediate financial decisions, and protect your assets before divorce proceedings begin.

• Organise your bills and paperwork.
• Decide on the split of assets and debts
• Update your accounts, will and super (including cancellation of joint accounts).
• Plan your living arrangements
• Restructure your budget and expenses.

These are also more specific aspects of post-divorce finances that you’ll need to work out, for example if you and your ex-partner have children together. From a financial perspective, this will most likely involve some kind of agreement around child support, and how care will be shared.

Child support involves financial payments made by parents who are no longer together, aimed at assisting with the costs associated with raising their children. Child support can also be paid to a non-parent carer—like a grandparent, legal guardian, or another relative—who has taken on the responsibility of caring for the children.

Organise Your Paperwork

Throughout your marriage, you would most likely have some shared bills and assets together. To untangle this financial web and get a clear view of what you need to action or negotiate, start by gathering and sorting all your documents.

1. Personal documents such as marriage certificate, birth certificate and passports
2. Bank and credit card statements
3. Insurance policies (health, home and contents, car, income protection, and life insurance policies)
4. Tax records
5. Car registration details
6. Superannuation details
7. Property or loan documents (deeds or mortgage documents)
8. Investment statements (for example, managed funds, share dividends)
9. Government benefit details and their requirements

Negotiate a Binding Financial Agreement

There are a variety of financial agreements that might come into play in a divorce. These can include Binding Financial Agreements for asset separation, Superannuation Nominations, Child Support Agreements, and Spouse Maintenance Agreements.

A main advantage of negotiating your own Binding Agreement is to avoid spending significant amounts of money in legal fees. It can also be much quicker than going through a prolonged mediation and court process. However, you should get professional advice from a family lawyer to put together a fair financial agreement, even if you are aiming for an amicable out-of-court settlement.

As soon as you separate, you can start working on this. Prioritise coming to an agreement on factors that will impact your life once you are divorced, like:

1. Housing – who will live in the house, and where the other partner will live
2. Children – how they’ll be financially supported and where they will live
3. Finances – how to create a fair split that will leave both partners able to rebuild their lives

Not every couple is able to have a clear and amicable conversation about these issues, but when so much is on the line, it is worth creating a strategy on how you’ll do this. Some techniques you could try are:

• Create a list of what needs to be worked through and share it with your ex-partner
• Ask for their buy-in on the topics to work through together
• Articulate your reasons for wanting to work together on this task
• Use your legally binding ‘Separation Agreement’ as a tool to help navigate the conversation

Update Your Accounts, Will and Superannuation

Act on separating your finances as soon as possible, to protect yourself and avoid situations that could do more damage to your divorce negotiations. For example, close joint account and credit cards, and remove your name from any financial commitments that you won’t be responsible for. Create a new bank account in your name.

For superannuation, if you have nominated your spouse as your beneficiary to receive your super and health insurance benefit in the event of your death, you might want to contact your superannuation provider to nominate someone else.

It’s also important to review and update your will, if you have one. For example, you may want to remove your ex-partner from your beneficiaries and ensure any finances go to your family or children. This is a very personal thing that you can approach in your own way based on your situation.

As an example, we had clients who divorced. They both chose to keep their ex-partner as their beneficiary because they would be the sole carer of the children if one of them passed away. However, if one of them remarries, then this set-up would most likely change.

Sort Out Your Mortgage and Living Arrangements

If you and your spouse have an ongoing mortgage, disentangling the mortgage arrangement can be complex. Make sure you have reviewed your outstanding loan balance, interest rates, monthly expenses, and the remaining time left on the mortgage.

Whether both names are on the mortgage or not, you’ll need to work together to determine the next steps. Options include:

• One person keeps the home and refinances the mortgage solely in their name, paying out the other partner
• You could sell the home and split the proceeds.
• Continue co-owning the home according to the terms set in your Binding Agreement.
• If one person owns the house, you may need to make provisions in the Binding Agreement to ensure the other partner

Whatever you choose, make sure you carefully assess your budget. Will you be able to afford a mortgage alone? Will you need to downsize or refinance for more manageable payments?

If you and your ex-spouse used to rent a property together, one of you might simply move out. However, consider if you can afford rent on a single income. If not, you may have to break lease, which can come with its own financial impacts.

If you have property and assets between the two of you, it is important to sit down and discuss how these will be divided fairly. Make a list of all your joined assets and debts, and get professional advice to split them up from a lawyer or Family Dispute Resolution provider.

Restructure your budget and financial direction

We recommend that each partner completes a new budget for their individual income and expenses. If children are involved, it’s particularly important to have clarity on cash flow for the primary carer!

Don’t forget to factor in your new housing expenses, separate utilities and insurances, and also saving for your financial future. You should also consider your superannuation and when you can retire in light of your new financial situation.

Your divorce settlement will impact your financial wellbeing, but it is possible to rebuild with the right planning.

Talk to A Financial Adviser

This is the right time to speak to a financial advisor if you don’t already work with one. Our financial advisers work post-settlement to help set you up for the future, while other advisors specialise in walking you through the divorce process alongside your lawyer. An advisor might focus on cashflow modelling, superannuation changes, insurance and income protection changes, wealth-building for retirement and housing strategies, helping you make informed decisions for your life post-divorce.

If you’re unsure about your new budget and cash flow, or if you’ll be able to create financial security for yourself going forward, it’s important to seek financial advice as soon as you can. If you’re unsure, a financial advisor can also help determine your eligibility and how to make the most of support payments from Services Australia.

On the other hand, if you find yourself with a large settlement, an advisor can review your entire situation and provide clarity on how to use the settlement to create choice and freedom in your future.

Useful Links

There are free helplines available such as the Family Relationship Advice Line (FRAL). FRAL can help you with free legal advice and information about services available to assist anybody with family relationship issues. There are also available free helplines for your local states such as legal aid, women’s legal service and aboriginal community legal service.

Bonus: The Separation Guide’s ‘Pool of Assets’ Calculator:  This is a super useful tool to go through your assets and liabilities, and identify what a fair split might look like.

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