Now Ive got residency what do i need to do?

[ali2016]

Hey all,

 

I finally got my residency via 186 transition.

 

Now I am a resident, what things to do i need to?

 

I know i need to update medicare so I get the same benefits as an Australian.

 

What about the ATO and my tax?

 

Also, health insurance? I know i have a year to sort out health insurance before my tax is loaded for health cover for my life time, but is it worth taking out private insurance?

 

Finally, now I am a resident am I restricted for working for the company that sponsored me and nominated me for my residency or can i leave?

 

Any other information would be helpful, as I dont know what i need to do or I am entitled to!

 

Thanks!

[northshorepom]

Medicare, yes you need to tell them. I forgot and got moaned at when I did it eventually. You have to go in to do this, or I did

 

ATO, no different, presuming you were resident for tax purposes anyway

 

If you are planning on claiming any benefits to which you were not previously entitled (like childcare rebate) then you will need a Customer Reference Number off Centrelink. Again this is a go in job, as they need to verify your identity

 

You will need an Aus driving licence if you don't already have one. Rules differ from state to state, in NSW we had 3 months to do it (so left it 2 months and 29 days :-) )

 

You are not restricted in working for the company who sponsored you as far as immigration law is concerned. However, they may have asked you to sign a document which means they can claim back costs from you if you leave in a certain period. For my employer this was 2 years. Setting aside statutory and contractual ties, you also need to think about the risk of leaving promptly. Most industries are pretty small and p1ssing people off isn't usually a good idea if it can be avoided, most companies who have gone to the time and expense of sponsoring someone for PR are going to be a bit p1ssed off if they then leave straight away

 

I think you have to sort out health insurance pretty quickly. The lifetime loading differs depending on your age, in my case this was the first thing I sorted because I didn't want to fall foul of the lifetime loading at all, nor did I want to be liable for the additional Medicare levy, but this is of course income dependent

 

I don't think you need to do much else but I'm sure I've forgotten something and someone else will be on soon. When it comes to tax time you are now liable for tax on foreign earnings and capital gain tax on foreign capital gains made in the period since you became a permanent resident. These things, if you have them, will have to be declared on your tax returns

Edited February 7, 2017 by northshorepom

[northshorepom]

Congratulations by the way

:-)

[northshorepom]

Oh yes, one other thing that springs to mind: Life insurance

 

This sort of long term cover is generally not available to non-residents, conversely many UK policies (if you have one then check it) only cover UK residents. If this cover is important to you/your family then it's wise to get covered in Aus IMO.

 

Most (perhaps all) superannuation schemes have life cover included, but you pay for it albeit generally the premiums are paid out of your fund so effectively only taxed at the concessional rate rather than out of your take home pay which is taxed at the full rate. You can opt out, whether or not this is wise depends on the cover offered by the super scheme and the premiums you are paying out of it, versus what you can get elsewhere. This depends on how good the super scheme is and your own personal circumstances (especially income tax bracket) so not the same answer for all

[Collie]

Congratulations.

 

Would echo the point about jumping ship too quickly from the job if they sponsored your PR. 1 to 2 years is reasonable payback IMO but check if they are any refund issues.

 

Re Private Health Insurance (PHI), depending on your earnings you may pay an additional Medicare levy if you don't have it (think it's 1.5%). So quite often the extra tax/levy is the same as the premium you would pay anyway.

 

This only applies to hospital. Quite often PHI is sold as a bundle Hospital and Extras/Ancillary. Extras is a lifestyle product and you should claim as much as you can (Physio, Dental etc). Hospital is a piece of mind product and you hope you never have to claim (operation, etc).

 

Not sure if you plan on having kids but my daughter was born through the public system and the care was fantastic. I know a few people who went private and said that they didn't notice the difference at all. Quite often, their obstetrician wasn't even available when the baby decided to come and they ended up with the public doctor anyway.

[ali2016]

I spoke to the ATO and I don't earn enough (90k - 105K pa) to be auto charged the medicare levy, therefore its my own choice whether I take out private health cover (i need to look into this as if there are no tangible benefits whats the point - I'm 32 and pretty healthy). She said as I am now a permanent resident I will automatically be taxed the 2% in order to access medicare generally.

 

I have super with work which includes a lump some for life insurance (i thin). I need to look into that..

[robfromdublin]

Income protection insurance is much more important than health insurance in my opinion. At least with health you have the public system as a fall back. If you are off work for any length of time have you enough savings and/or sick leave to sustain you though?

[ali2016]

Is income protection insurance not covered as part of your super? Im confused

[robfromdublin]

Sometimes. Usually it is 'any occupation', rather than 'own occupation', though. This means that as long as you are functionally able to work in any capacity, they won't pay out from the super version. If you have your own insurance outside of super and you have specified that it is to be 'own occupation', then you will get paid if you can't do YOUR job (not just ANY job).

 

I am a scientist, for example, and I need my brain and memory to work. If i acquired a brain injury and couldn't do my current job, but I could do more menial work, then my super income protection would not pay out. Equally, if I were a carpenter and lost my arm then I couldn't be a carpenter, but I could be an office admin worker, so I might not get a payout.

[northshorepom]

Income protection insurance is much more important than health insurance in my opinion. At least with health you have the public system as a fall back. If you are off work for any length of time have you enough savings and/or sick leave to sustain you though?

 

PHI, it depends on your circumstances (age and income tax bracket primarily) but yes, it's up to you. For me as a middle aged bloke with a family earning decent money, it's a must, but it's a very different scenario for young singletons

 

Income protection insurance, I had never even considered it because in the UK it's generally so covered in small print and exclusions it's poor value. I just did a quick online quote here on the back of your comment rob and it was better pricing than I expected, and I didn't see quite the level of exclusions. I'm about to change jobs so won't have sick leave accrued in the new place so it may well be worth taking out for a year or two, so thanks. Caveat: I haven't checked all the small print yet

[robfromdublin]

Yeah I'm fortunate in that my wife works as a financial advisor and therefore is across reducing risk to income and all that. I can rely on her to read the small print! I probably wouldn't have bothered otherwise, but I've got 2 young kids now so in a similar boat as yourself. Definitely pays to be careful, it seems to be a minefield to me.

 

We also have PHI but I don't think it's worth it (my wife wants it for peace of mind). Most of our health interactions (pregnancies, emergencies) have been through the public system and I haven't a bad word to say about it. Having said that, we don't earn enough for the Medicare levy surcharge. If we did then it'd probably tip the scales in PHI's favour.

[northshorepom]

Yeah I'm fortunate in that my wife works as a financial advisor and therefore is across reducing risk to income and all that. I can rely on her to read the small print! I probably wouldn't have bothered otherwise, but I've got 2 young kids now so in a similar boat as yourself. Definitely pays to be careful, it seems to be a minefield to me.

 

We also have PHI but I don't think it's worth it (my wife wants it for peace of mind). Most of our health interactions (pregnancies, emergencies) have been through the public system and I haven't a bad word to say about it. Having said that, we don't earn enough for the Medicare levy surcharge. If we did then it'd probably tip the scales in PHI's favour.

 

I worked it out once, we got about 30% of our annual premiums back in benefit through various extras, mostly dental but also optical and a couple of other things. 70% of our premiums is way lower than the levy before I even start computing what a minimum level of hospital cover would be to avoid the lifetime loading, so no brainer

 

It's a bit like fuel cards in the UK. I was told by loads of people not to take these because the BIK tax was too high, but it took 5 minutes to work out that the tax was about 200 quid a month for my car, and I was spending 350 on fuel anyway (long commute). So total no brainer, but YMMV

[Marlou]

I spoke to the ATO and I don't earn enough (90k - 105K pa) to be auto charged the medicare levy, therefore its my own choice whether I take out private health cover (i need to look into this as if there are no tangible benefits whats the point - I'm 32 and pretty healthy). She said as I am now a permanent resident I will automatically be taxed the 2% in order to access medicare generally.

 

I have super with work which includes a lump some for life insurance (i thin). I need to look into that..

 

Just reading through this thread and thought worth flagging that with private health insurance, the medicare levy and lifetime loading are two separate issues. You can be exempt from the medicare levy as your earnings are below the threshold, but still affected by the lifetime loading, i.e.:

1) medicare levy is an additional % of tax) - and only relevant if you earn over X amount; and

2) lifetime loading is applicable if you don't take out private health insurance within X amount of time, but later choose to buy it, you'd then be hit with the lifetime loading (being an additional cost on the premium you pay).

 

Still navigating the above myself, so not an expert, but though worth pointing out these seem to be two separate things to consider.

[Collie]

Yes, Marlou is correct.

 

it may be worth taking out a cheap hospital only policy to avoid the lifetime loading later in life. It is 2% for every year you don't have cover over the health applicable age of 30, eg if you are 40 when you first take out PHI and have been living as a PR in Australia since 30, you will pay a 20% loading on your premium for 10 years.

 

Also if your earning rise in the future (or they mess with the threshold), you may become eligible for the extra levy in the future.

 

Although you are 32, your health applicable age is 30 as you were not obliged to have PHI before now. I was paying a 6% loading until recently when I found out that as I had been living overseas for a period, I shouldn't have been paying any loading. I got a refund for overpaid premia going back 5 years?

[robfromdublin]

Also, to confuse things further, there is a Medicare levy surcharge for high income earners, which is additional to the Medicare levy of 2%. This is an extra 1-1.5% income tax which you can avoid if you have PHI. This is what makes the maths stack up for northshorepom but not me.

 

The lifetime loading isn't much of a deal. If you avoid paying premiums for one year, you save more money than it costs you to pay an extra 2% for ten years. Obviously there are things like your rate of claims and inflation to consider, but for most people I would have thought it's not worth worrying about.

[Marlou]

Just reading through this thread and thought worth flagging that with private health insurance, the medicare levy and lifetime loading are two separate issues. You can be exempt from the medicare levy as your earnings are below the threshold, but still affected by the lifetime loading, i.e.:

1) medicare levy is an additional % of tax) - and only relevant if you earn over X amount; and

2) lifetime loading is applicable if you don't take out private health insurance within X amount of time, but later choose to buy it, you'd then be hit with the lifetime loading (being an additional cost on the premium you pay).

 

Still navigating the above myself, so not an expert, but though worth pointing out these seem to be two separate things to consider.

 

Sorry, just to clarify (since I can't figure out how to edit my above post) - the first point above should refer to the 'medicare levy surcharge' (only applicable to people earning over X amount), NOT the 'medicare levy', which is the standard for all earners.