Medical expenses can consume a large chunk of ones cashflow, and also have tax implications. Firstly, medical insurance. In Australia there is universal public health coverage. A 1.5% medicare levy is charged based on your taxable income (there are some exemptions and reductions for special cases such as low income households) which contributes towards the cost of public health in Australia. There is also a medicare levy surcharge (MLS) of an additional 1% of taxable income is charged when your income is above the threshold and you don't have private hospital insurance. The threshold for an single taxpayer is $50,000 and varies for different family types. For example, DW and I have 2 children, so our MLS threshold is $101,500. In previous years when DW and I were both working fulltime we would have had to pay the surcharge if we didn't have private hospital insurance. So the monthly insurance premium of $144.20 was good value as it was close to what the surcharge would have cost anyhow. This year our combined taxable income will be a lot less (around $60,000) as DW is working part-time and also salary sacrificing around half of her wage into superannuation, and I am salary sacrificing around half of my wage as well. As the monthly insurance premium has increased to $151.45 we could save $1,817.40 by cancelling out insurance. We'd have to take up coverage again when DW resumes fulltime work. However, I don't think I'll cancel the insurance as it is very useful if you ever need "elective" surgery (otherwise you'll be on the public hospital waiting list, which can be very long).

The second tax aspect of medical expenses is the Net medical expenses tax offset. Net medical expenses are the medical expenses you have paid less any refunds you got, or could get, from Medicare or a private health fund. You can claim a tax offset of 20% – 20 cents in the dollar – of your net medical expenses over $1,500. There is no upper limit on the amount you can claim. For example, our total medical expenses on GP visits, specialist consultations and tests, pharmaceuticals, dental work and optical costs was $7,191 in the past 12 months. Our total refunds from medicare and our private hospital cover was $1,340 for this period, leaving us "out of pocket" to the tune of $5,851. This means I can claim a tax rebate of 20%x($5,851-$1,500) = $870.20, which is better than nothing. So it's important to keep all receipts for pharmacy, dental and optical expenses as medicare only has a record of the expenses that you claimed a refund for (mainly GP and specialist doctor and hospital costs).

Although it would be interesting to know the ratio of our health expenses to the benefit we've received from medicare and our private hospital insurance, it's not easy to calculate. For one thing the medicate levy only pays for part of the governments expenditure on public health. A larger amount comes out of consolidated revenue. Also, aside from the obvious medicare refunds that you have to apply for, there is an inbuilt subsidy for medicines via the PBS (Pharmaceutical Benefits Scheme) which isn't printed on pharmacy receipts.

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I lodged our claim with the insurance company last night regarding the tree damage to our rental property. The CSR told me to call the Sydney office this morning to confirm that the assessor would inspect the damage today. When I called they had the claim recorded, but advised that a builder would be sent to inspect and quote first, and that it wouldn't happen today. The tennants have been good sports about the whole thing so far, but are complaining that it's a bit cold with a hole in the loungeroom roof just covered with a plastic sheet. If it takes too long to get the roof fixed (or we get heavy rain before the repairs are done) I suspect the tennants may just give notice and move elsewhere.

At 8am the repair man from the water company phoned to ask if I knew where the water meter was located. I had to admit that I had no idea - I knew where the tap was to turn off the main water supply, but hadn't noticed the meter (it's usually next to the control valve). The tennants later said that the broken water pipe (ripped up when the tree was uprooted) had been repaired by an emergency crew the night before, so I'm not sure why the water company was looking for the meter the next morning - perhaps to check how much water had been lost while the pipe was broken?

During the day we went into town to convert our home loan from principal and interest (P+I) to interest only for the next ten years. DW will be working part-time until DS2 starts school, so we need to reduce the home loan payments in the meantime. We also spent a hour and a half (!) at the family assistance office filling in paperwork to apply for family tax benefit payments. Hopefully we'll get a letter in a couple of week confirming the payment amount, but it's just as likely that we need to spend more time during business hours providing some extra paperwork that they forgot to request this time around.

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I was enjoying a nice relaxing afternnon at home when the phone rang. The nextdoor neighbour of our rental property asked "Do you know that there's a big tree fallen on top of your house?" [our rental property]. It was news to me. So, we all jumped into the car and drove over to our property to inspect the damage. The tree was bigger than the house and had just missed landing on the house and flattening it completely. As it is, few large branches have gone through the roof, and the lounge room was full of debris.

Luckily the tennants weren't home at the time - they usually park their car where the trunk of the tree landed. As no-one was home at the time I'm a little disappointed that the tree didn't drop two metres further to the left, in which case it would have entirely demolished the house. The house is insured for aroung $385,000, which would have gone a long way towards building a nice, new house on the block. As it is, I guess that the house is probably repairable, so we'll just get the inconvenience of getting repairs done and end up with the same 50-year old house as before.

Apparently the tree fell over in a strong wind gust around 2pm this afternoon. All the heavy rain in the past month has made the ground very wet and spongy, so any strong winds are likely to make lots of tree uproot. When we got to the property at 4:30pm and saw the damage I called the local State Emergency Service (SES). The SES volunteers arrived within 15 minutes and will clear off the branches embedded in the roof and cover the gaping holes with a tarpaulin (to keep out any rain).

When we got back home at 5:30pm I called our insurance company to lodge a claim. The assessor should inspect the property tomorrow and let us know if the tenant can stay there while repairs are made, or has to move out, and the extent of the damage. Our insurance also covers loss of rent, but I've no idea what happens if the tennat decides to just give four weeks notice and move our (their 6 month lease expired last month).

I'm also not sure if the insurance will cover the cost of getting the main body of the tree removed, or just the actual house repairs. Best case we'll be out of pocket for the $100 excess. Worst case we'll also have to pay for getting the tree removed, landscaping the damaged rockery, lose some rent while the property is getting repaired, etc. etc. That's why, since no-one was home at the time, I'd have preferred the tree to land square on the house and demolish it completely.

My Alexa ranking is hovering between 800,000 and 900,000. Although there's probably some bias in the stats due to higher uptake of the Alexa Toolbar in some countries compared to others, it's still interesting to see that this site has more users from the US and Canada than Australia, and that as many users come from Coatia, Sweden and Vietnam as come from Australia! Anyhow, if you use IE for you browsing, and wish to download the Alexa toolbar, the link above will provide it. The main benefits of using the Alexa toolbar are:

* real-time information about the sites you visit.
* helps identify phisher and scammer sites
* Alexa's Related Links helps find related information

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It's a pity that I already have several online savings accounts and mututal fund investments, because the new offering from rabobank looks very attractive. They offer an online savings account with no fees or minimum balance with an interest rate of 6.6%, and from this account you can invest in wholesale mutual funds for a low entry fee of only 0.75% (compared with up to 5% entry for retail funds going direct or via a planner, or 0% for a retail fund investment via a discount broker). They are offering 0% entry fee, but only until the end of July. But the 0.75% fee is still good value as it gives access to wholesale funds (which usually charge lower management fees than their retail fund equivalents) with a minimum investment of only $250.

I'd try out this account and fund investment option if I didn't already have more accounts than I know what to do with. They do offer the account for use with a DIY Superannuation account (SMSF), but I'll have to check carefully how their costs and range of available funds compares with accessing mutual fund investments via e*Trade (I already have an e*Trade account setup for use with our SMSF). One benefit of making out SMSF mutual fund investments via e*Trade is that eSuperFund (which administers our SMSF) has access to transaction data from our e*Trade account. If we invested for our SMSF via Raboplus we'd have to send copies of all the relevant financial info to eSuperFund each year.

I was also thinking about opening a Raboplus account for DS1 and/or DS2, but unfortunately you can't open a raboplus account if you're under 12, so the kids will have to make do with their St George bank accounts and Commonwealth Bank 'dollarmite' savings accounts. It's funny how some banks and Superannuation funds have no problem with opening accounts for a minor (with an adult having authority to operate the account), while others either don't handle accounts for minors at all, or insist on the account being opened in the name of the adult trustee(s).

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Sydney prices for established homes in the more desireable suburbs have tended to increase by around 6% in the long term. After the boom in prices between 1998-2003 we've now had several years of flat prices. According to Australian Property Monitors there will be a 5% increase in property prices in the next 12 months. This agrees with the recent increases observed in average home sales prices in the two suburbs where we have our home and rental property. There have also been reports that the boom in Western Australian house prices over the past three years (driven by the commondity/mining boom) has come to an end, so I expect house prices in WA and NT to be flat or decrease in the next 12 months and house prices in Sydney to increase by more than 5% - perhaps as much as 10%. This will be good news for my net worth as DW and I have equal shares in around $1.4m of real estate with about $0.7m of mortgage debt. With a mix of variable and fixed rate loans, our overall mortgage interest rate is currently around 7.25%, so an increase in house prices of 10% would boost our home equity by 12.75%.

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Three out of the four modules for the Diploma of Financial Services (Financial Planning) arrived by Australia Post parcel delivery today, which is pretty good service considering I only enrolled in the course online on Thursday. The modules look fairly interesting, and the assessment items seem fairly straight-forward. In the first few assessment items you only have to read through the material provided and regurgitate the material in your own words. You have to pass all the assessment items with a mark of "100%" (ie. get the answer correct), but if you stuff up the answer you get sent back some "feedback" on where you went wrong and can resubmit.

The one missing module is the one on Superannuation. I'm not sure if this parcel was just delayed and will arrive by post tomorrow, or if ps146.com is in the midst of revising the course due to the changes to superannuation regulations that apply from 1 July. I don't think that they revise and update the material too often, some of the "background reading" material is at least 18 months out of date. It can't be too long before it arrives as you are only allowed four months from date of enrollment to submit all the assessment items (although you can get a couple of months extension for an extra $150 fee).

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In past years I've made investments into agricultural schemes. Aside from the 100% tax deducibility of the inital investment, ongoing annual management fees, land rent and insurance premiums are tax deductible each year. Eventually I'll hopefully get a reasonable return on these investments in timber (hardwood for wood chips and teak for sawn logs) and sandlewood (for incense). Although this sort of investment provides income tax deferral rather than 'converting' income into capital gains, it is still worthwhile as you get to benefit from the returns generated from the investment of the deferred tax amounts, plus tax cuts in recent years have meant that my marginal tax rates will be lowered when the investments produce income than would have been the case in the years when the initial investments were made. In addition I'll be able to use this income to help cover living costs in future years, so I'll be able to salary sacrifice more of my salary into retirement savings than would otherwise have been the case.

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