An Education Savings Plan is a simple to use and an easily managed investment solution. It enables you to be better prepared to meet a child's education expenses - both expected, and unexpected!
Comprehensive - there is no age restriction for a nominated child or student. The Plan covers most primary, secondary schooling and tertiary education fees and expenses (including mature age students), which include University, TAFE and other registered training organisations in Australia or overseas. Children with physical, intellectual or learning disabilities are also covered.
Anyone can start a Plan - parents, grandparents, uncles, aunts, guardians and godparents over the age of 16 can start a Plan.
Anyone can contribute - any person who wishes to contribute towards the education expenses of someone they care for can support the Plan.
Fully flexible - you can make contributions monthly or through an initial lump sum, or a combination of the two! If you need to raise or lower your contributions according to your circumstances, you can do so without any fees or penalties.
Some limits do apply: if you establish a regular savings plan the minimum monthly contribution is $100 per investment option, and a minimum $500 per investment option for lump sum contributions.
Generous limit - you can make contributions up to a maximum of $365,000 per nominated child or student. This limit is annually reviewed, and may be increased to reflect rises in the cost of educating your children.
Ready access - you can access your money at any time, for any purpose, so you have total control of it. And there are no withdrawal fees.
Tax advantages - The Education Savings Plan operates as a 'scholarship plan' under tax laws. The product is administered to help minimise the tax payable if you remain within certain guidelines. For example, for a student under 18 there will normally be no tax payable, as long as the sum of eligible education expenses withdrawn from the Education Savings Plan, plus investment income (from any source) is less than $2,666.
If you wanted to take out more than this for education expenses for this student (say $3,500), the first $2,666 comes from investment earnings (which isn't charged tax provided the student has no other assessable investment income for the year), and the remaining $834 comes from capital (no tax is payable on capital withdrawals either).
And when the nominated student turns 18 there's normally no tax liability, as long as the sum of the education expense reimbursements, together with the student's employment and investment income from all sources, falls below $14,000 in a financial year.
Four investment options - Chose from Capital Secure, Balanced, Diversified, or High Growth Options.
This advice has been prepared without taking into account your objectives, financial situation and needs. Find out what it means for you.
A for EducationSavings Plan (the Plan) is issued by Lifeplan Australia Friendly Society Limited ABN 78 087 649 492 (Lifeplan) AFS Licence 237989. The Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 promotes and distributes the Plan but does not guarantee or in any way stand behind the Plan. A copy of the PDS is available . (Adobe Acrobat Reader required.) You should consider the PDS in making any decision about this product.
