By Tom Valenta
With the growing percentage of people with CF as adults – and in the workforce – the question of financial planning has become a more significant issue than ever before. As the average life expectancy for people with CF continues to increase, long-term planning is becoming more important.
Superannuation is, as described by the Australian Taxation Office (ATO), “… the main way most people save for their retirement. Superannuation (super for short) is a long-term investment that grows over time. The more you contribute during your working life, the more you’ll have for your retirement.”
For employees, contributions are made by their employers and themselves. The employee can make salary sacrifice contributions on a regular basis and add ‘top ups’ from time to time. For self-employed people, they can set up their own self-managed superannuation fund or contribute to an industry or other fund.
Long-term planning is even more important for people with CF and other chronic conditions. Andrew Dunbar who is Senior Financial Advisor at Apt Wealth Partners and Board Chair of The Lungitude Foundation,[1] understands the needs of people with CF and their families. He points out that people with health challenges are more likely to have shorter working lives – or not be able to work full-time in later years. For them, superannuation offers some financial security.
Andrew strongly recommends that people contribute as much as possible – within the legal parameters. “Contributions reduce personal income tax, and inside a superannuation scheme, it is taxed concessionally so there is lower tax on the earnings.”
For people with CF or other chronic conditions, there is a good chance they, or their families may need to access their super before retirement. This means that early planning is even more important.
“You can legally access your super early in some circumstances,” says Andrew. “This includes to pay some expenses on compassionate grounds, as well as terminal illness, incapacity and severe financial hardship if you are unable to continue working. Compassionate grounds include medical treatment for you or your dependant – for example having double lung or other organ transplants.”
Compassionate grounds may also include cases such as families who were prepared to fund Trikafta and other medications for their loved ones before they were listed on the Pharmaceutical Benefits Scheme (PBS). The cost of Trikafta was $250,000 per annum before it was listed in April 2022.
Early access of super is also permitted in cases of terminal illness. If a person is diagnosed with a terminal illness they may access their super and use it to support themselves and their family. Similarly, people who are incapacitated through injury or illness may be able to access their super. This can also apply to people who experience severe financial hardship.
Andrew emphasises that early access to superannuation has strict rules, and it is important to check with the ATO or your superannuation fund before proceeding. Most cases require medical certificates and other relevant evidence, depending on the circumstances. The super fund must then be prepared to rule in favour of the applicant.
For people who do live a long and productive life, super provides a tax-free retirement income from the age of 60. For those who do reach retirement age, having a long-running super scheme can support happy and comfortable living in those latter years.
Super is also an effective estate planning tool as it does not automatically form part of an estate. This means that the owner can, at his or her discretion, nominate beneficiaries.
Are there alternatives to super? Yes, there are, but as Andrew points out, for most people, these are not as good as super. People can establish their own personal investments, but these do not offer the tax advantages of super. Then there are family trusts which also do not offer the same tax advantages as super but can be accessed as and when needed.
It is important to remember that super rules are very complex and seeking advice for personal circumstances is strongly recommended.
Planning for the future – a wonderful concept for those who, in bygone years, were focussed on their daily survival.
* The Lungitude Foundation is a registered Australian charity focused on funding and facilitating world-class translational research, advocating for lung transplant excellence, building a strong community of support, and educating key audiences.
** Individual financial circumstances vary. If needed, please consult a financial planner to help guide you with your finances.
About Tom Valenta
A former journalist and public relations consultant, Tom Valenta is an author and advocate. In all, he has written thirteen books of non-fiction covering diverse topics including dementia, cystic fibrosis and alcohol and other drugs.
His work in the dementia and cystic fibrosis fields was inspired by personal experiences – he lost his wife, Marie, to Alzheimer’s disease in 2009 and two of his six grandchildren live with cystic fibrosis. In addition to the books, he has written articles, scripts and has advocated in these areas.
Tom’s book on cystic fibrosis, “Every precious breath: Inspirational stories about living with cystic fibrosis,” was published in 2011. For his work, Tom was awarded an Order of Australia Medal (OAM) on Australia Day, 2019.
The views, experiences or comments shared on this website are not medical advice and may not reflect opinions or beliefs of Cystic Fibrosis Community Care. Always seek the guidance of your doctor or other qualified health professional with any questions regarding your health.
