From study to work –
Helping your child navigate the transition to working life
When my eldest son started to drive, I was surprised by how little he knew of the basics of driving a car. I’d foolishly assumed that after so many years of being in the car with me that he’d have made some simple observations about operating a car. Learning through osmosis – seemingly simple tasks, such as applying the handbrake when parking the car, or doing a head-check before pulling onto the road. On his first outing as a learner driver, I quickly realised that we needed to start from the VERY beginning.
Several years later, as this same son entered the workforce after leaving school, I found myself making similar observations when helping him complete the new-employee paperwork. Tax file numbers (and – yawn – tax returns), superannuation, industrial awards and National Employment Standards. All of these terms like a foreign language to him! And, just like learning to drive, it occurred to me that we had to go back to basics. These concepts aren’t taught in school, and our young adults can be a little clueless initially.
I’ve learnt that it’s best to assume your child knows nothing, or at least very little, about all things employment-related: tax, superannuation and conditions of employment.
Sharing the knowledge, of course, is not the easiest of tasks. Mainly because (for my young adult at least), it’s rather boring. At 18 years of age, retirement is too far away to be relevant, let alone interesting. He doesn’t really mind if he’s being paid consistent with the relevant industrial award, because he’s being paid! His head may be nodding, but the eyes are glazed and the mind is distant….
There’s a lot to absorb, and in our case, the “drip method” seems to yield the best results. Impart small building blocks of knowledge, which will eventually come together into something more concrete and complete. We keep the conversations brief, but come back to them regularly.
If your child welcomes support from you as they navigate this new world, there is a number of practical things you can do to set them on their way.
- If they haven’t already done so, help your child obtain a Tax File Number.
2. Help them set up a MyGov account so they can access government online services, including the ATO and Medicare.
3. Establish and record their super member details. For my son’s first job, he opted for the employer’s preferred fund, an industry fund. For some reason that we don’t understand, he never received a new member pack, so didn’t know his member number. If I hadn’t queried it with my son, he wouldn’t even have been aware that he had any super! It simply wasn’t in his consciousness. A quick check of his employment paperwork and a phone call to the nominated super fund gave him all the information he needed.
4. If they have more than one job, make sure any super is consolidated. It’s easy for young people working across a number of casual jobs to end up with multiple, employer-nominated super accounts. Consolidating funds avoids having those account balances eroded by paying multiple fees and charges. Having everything in one place simply makes more sense, and keeps the task of overseeing and managing super easier.
5. Review their investment strategy. My son learned that his balance had earnt a paltry 1.5% over 12 months. We talked it through and he decided to switch to an aggressive investment strategy. And he’s looking forward to seeing how it performs over the longer term!
6. Review any life insurance held within the super fund. It’s likely that the super account will include default cover. Explain what it is, and what happens to the super balance (‘death benefit’) when the member dies. Talk about whether a binding death benefit nomination should be put into place, so that the he or she decides to whom any death benefit is paid.
7. Encourage your young adult to put in place an Enduring Power of Attorney. This is really important. None of us knows what lies ahead. By making an enduring power of attorney (EPOA), there will be someone who can legally look after their financial and legal affairs if they become unable to do so.
Despite having officially entered adulthood, I sometimes feel this young man of mine needs more parenting now than ever before. Perhaps ‘parenting’ isn’t the best term. ‘Mentoring’ is more apt. Navigating the transition into becoming a fully-fledged grown-up isn’t completely straightforward, and your child will look to you for guidance, knowledge and insight. Secretly, I’m pleased my man-child still “needs” me, and am looking forward to this new phase of our parent-child journey!
This content is intended only to provide a summary and general overview of the subject matter covered. It is not intended to be comprehensive nor does it constitute advice. We attempt to ensure that the content is current but we do not guarantee its currency. You should seek professional advice before acting or relying on any of the content.