High cost of living forces ex-couples to keep living together

Almost one in five Australians have continued living with a former romantic partner because they couldn’t afford to move out, a new survey has found. The trend is strongest among younger Australians, with 33 percent of Gen Zs having remained in a shared home with an ex-partner due to restricted finances. This compares to 11 percent of Gen Xers and 5 percent of Baby Boomers.

Finder surveyed 1,049 Australians last month and found that 17 percent had remained living with an ex-partner after breaking up at some stage in their lives. Four percent, which is the equivalent of more than 800,000 people on a population basis, are currently living with an ex-partner for financial reasons. A further 13 percent said they had made this choice in the past but had since moved out.

The cost of housing is significantly higher for people who want to live alone. Graham Cooke, head of consumer research at Finder, said: “Thousands of Australians decide to separate but remain living together for a prolonged period because they can’t afford to go their separate ways. Living together as a separated couple could be very difficult unless you are on really good terms.”

The cost of moving and living alone in a rented or owned property is not the only challenge. “It’s also incredibly difficult to find suitable accommodation in some parts of Australia right now so staying together under one roof might be the most realistic option in the short-term,” Mr Cooke said.

It is particularly difficult for renters to find a new home quickly in today’s market. Vacancy rates around the country remain very low due to a lack of supply of homes for Australia’s growing population. According to SQM Research, rental vacancy rates are below 1 percent in Adelaide, Perth and Darwin and between 1 and 2 percent in Sydney, Brisbane, Melbourne and Hobart. In Canberra, the vacancy rate is 2.2 percent. A balanced market has a 3 percent vacancy rate.

Mr Cooke recommended that people set up a personal emergency savings account to help them cope with a relationship breakdown. “During the honeymoon period of a new relationship very few people are imagining a time when they are no longer compatible. An emergency fund helps people to be financially prepared for the good and the bad,” Mr Cooke said. A separate Finder survey found eight percent of Australians, or 1.6 million people, have a secret bank account for various reasons.

Mr Cooke added that some people who owned a property with their ex-partner felt uncomfortable about potentially moving out. “Some homeowners worry that they will lose out if they leave the family home before any financial settlement but moving out doesn’t diminish your legal rights,” he said.

Making sure you claim everything you’re legitimately eligible for can have a big impact on your annual discretionary income. But do you know what you can claim?

What is tax deductible?

When completing your tax return, bear in mind that there are a number of tax deductions you can claim against expenses related to your work. What each person can claim will vary depending on their occupation. To make a deduction for a work-related expense, you need to have spent the money yourself without being reimbursed by work, and the cost needs to directly relate to earning your income. You’re also going to need a record to prove the expense, usually a receipt.

While travel expenses, home office expenses, education and mobile phone expenses are commonly claimed, there are a number of deductions often overlooked that you may be able to claim when completing your tax return.

Artwork

Regardless of why you bought your latest artwork, the Australian Taxation Office views artwork as both an investment and a depreciating asset, meaning you can claim it as a tax deduction. How much you can claim will be determined by the size of your business and whether you are an employee.

If you work from home, you can claim a deduction for your artwork up to the value of $300 as part of your home office expenditure. Small and medium sized business owners can make a much higher claim for artwork.

An apartment in another city

Investment properties purchased away from your home that you stay in when travelling for work can be claimed.

Under ATO guidelines, if you’re required to work away from home and you choose to rent or buy an apartment in the other work location rather than relying on hotel accommodation, you can claim a deduction for the work-related costs that apply to the apartment. This includes rent or interest on the mortgage.

Work handbag

Each year, you are allowed to claim a bag that you use for work. This could be a laptop bag or backpack used for carrying work-related items, but claiming a designer luxury handbag, may raise a few eyebrows at the ATO. If you carry your laptop, tablet and paperwork in a bag for work, then claim it. If you’re using it for gym equipment or your lunch, don’t.

COVID tests

The ATO will let you claim the cost of a COVID test if it was used to see whether you are sick and therefore unable to attend work. This is particularly the case if you’re in a customer-facing role and you need to purchase the test to stop the spread of the disease.

Man’s best friend

In some limited circumstances, you may be able to claim a deduction for the cost of buying and caring for a dog if they assist in your occupation. The two most common scenarios for this claim are farming and security reasons.

A caravan

The ATO allows for travel expense claims and there have been instances where taxpayers have claimed a caravan — and it was accepted. If you travel extensively for work and a caravan is saving you from paying for a hotel room, you may be able to apportion the deduction if it is used for work, rather than private use.

Meals away from home

If you’re travelling for work, you can claim the cost of meals when you travel and stay away from home overnight. You may also be able to claim a deduction for the cost of a meal you buy and consume when working overtime.

Media subscriptions

Many media publications are now subscription-based and can be deductible if they relate to your profession. This includes subscriptions to newspapers, professional magazines and podcasts that are linked to your profession.

Desk lamps and stationery

You don’t have to be running a business from home to make work-related claims. If you have a dedicated workspace at home where you’re doing a few hours of work at home a week, you can claim a number of related items, including lamps, stationery, a shredder and printer cartridges.

Protective clothing

If it’s related to your work, you can claim
the cost of buying items like fire resistant clothing, steel-capped boots, hi-vis vests or sun protection. This can apply to people working directly on site, like construction workers, but also related industries, such as engineers and architects who visit.

Depending on your industry, you can claim items that relate to your work, including a bullet proof vest if you’re a police officer or anything used that relates to your performance if you’re a professional athlete. Media professionals can also claim sunglasses if they are required to be out in the sun in the course of their work.

While you’re at it, you may also be able to claim the costs to clean occupation-specific clothing, so ask your tax accountant.

Tax accountancy fees

Last but not least, the fees you pay for the preparation of your annual tax return if you used a tax agent to prepare and lodge your tax return can be claimed on this year’s tax return.

The ATO has a number of online tools and calculators to help you calculate your deduction correctly, including work from home, self-education and car expenses.

Visit the ATO website and type ‘calculators’ into the search bar.