How to Reduce the ‘Singles Tax’ aka How to Reduce Extra Expenses for Singles
By Sophie Ryan, iSelect Spokesperson
Are you team SINK or DINK? Unsure what these groups even are? Well, read on because new research commissioned by comparison service iSelect has revealed some interesting insights that might make you think twice before picking a side.
SINKs v DINKs
For this study, Aussies on a single income with no kids (SINKs) and those living in a double income household with no kids (DINKs) were surveyed to find how much they’re spending on common bills and expenses, such as mortgage repayments, rent, power bills, health and car insurance.
The results? Unfortunately for the SINKs out there, they’re spending an estimated $7,691 more per year in ‘Singles Tax’, compared to their coupled-up counterparts!
How to Reduce the ‘Singles Tax’
If you’re team SINK and that $7,000-plus figure has come as a shock, don’t worry! There are ways you could try to reduce this ‘tax’ without breaking up with your lifestyle.
Singles could find savings or better value on some common household bills and expenses if they take some time to compare their options on a range of plans and providers – like their health insurance or energy deal.
Unsure where to start? Be it your energy plan, home and/or contents insurance, health insurance policy or your home loan, a comparison service such as iSelect* can see if they can save you money and take care of the process of switching if you decide to.
And just because DINKs aren’t being slugged with this ‘Singles Tax’, shopping around and comparing common household bills and expenses could be well worth it too, especially when the research also highlighted that 61 per cent of SINKs and DINKs surveyed say they feel pressured financially, and 73 per cent are making cutbacks due the rising cost-of-living or to meet day-to-day living expenses.1
Health Insurance and the EOFY
We mentioned private health insurance before, so let’s delve a little deeper into that topic. This time of the year is one the busiest times for health funds.
Why? Because ahead of June 30, many Aussies are either prompted to sign up for or review their policies because of things like the Medicare Levy Surcharge (MLS) or Lifetime Health Cover (LHC) loading.
If you’re unfamiliar with the MLS, it’s an additional tax generally payable by higher-income earners who don’t have an appropriate level of private hospital cover. From 1 July 2023, the MLS income thresholds will increase for the first time since 2014 from over $90,000 to over $93,000 (for singles) and from over $180,000 (for couples/families) to over $186,000.
So, if don’t have private health insurance and you’re unsure what income threshold you might fall under during the 2023-24 financial year when it comes to the MLS, now could be a great time to find out.
30 years-old or younger? You’ll want to take note of this too. If you don’t have an appropriate level of hospital cover by July 1 after you turn 31, and decide to take it out later, you’ll be subject to LHC loading.
This means an extra two per cent will be applied to your hospital premium each year that you’re without cover, and you’ll continue to pay it for 10 years. Things to keep in mind while you tackle that household expense review list.
*iSelect does not compare all products in the market. The availability of products iSelect compare may change from time to time. Not all products made available from iSelect’s providers are compared by iSelect and due to commercial arrangements, area or availability, not all products compared by iSelect will be available to all customers. Some products and special offers may only be available from iSelect’s call centre or website. Click here to view iSelect’s range of Providers.
Source 1: iSelect commissioned YouGov Galaxy Pty Ltd to conduct a national online survey between 6 April and 13 April 2023. The sample is n=2,112 Gen Z’s and Millennials aged 18-43 comprised of a nationally representative sample of 1,000 singles living alone and 1,112 couples living together, no kids.