A great education is about more than tuition, it’s about a great experience that prepares children for the future.
No matter what your child chooses to pursue, education can come at a significant cost and the cost is continually rising.
The Lifeplan Education Bond is designed to help parents, grandparents, guardians and students save for education expenses.
The unknown nature of educational expenses is a reason to start saving early. While you may not have much to put aside now, starting small and making regular contributions builds your savings over time and can ease the burden of the expenses when they come.
The Lifeplan Education Bond gives you:
What is the Lifeplan Education Bond?
It is a benefit fund operated by Lifeplan Australia Friendly Society. It is classed under Australian tax law as a ‘scholarship plan’ which provides particular tax advantages to the Fund*.
Who can invest?
The Lifeplan Education Bond is available to anyone over age 16, individual or joint investors, companies and trusts. However, family and friends, are able to make contributions to an account.
When and how much do I need to get started?
You can start an Lifeplan Education Bond at any time after the birth of a child. To start a scholarship plan, you will need to make a minimum contribution of $1,000. You can make additional contributions by direct debit, BPAY®, mailing us a cheque, or establishing a regular savings plan.
How much can I invest?
The maximum lifetime contribution that can be made per student is $606,000 as of 1 October 2021. This limit is reviewed annually on 1 October. You can contribute in lump sums, one-offs as gifts or an easy instalment plan.
Can investors be changed?
Yes, you can change the ownership by completing an assignment form. If you require any help, please contact Investor Services on 13 29 39.
Can the student be changed?
Yes, you can change the nominated student at any time should you want to by completing the Student Nomination Form.
What is unique about ‘scholarship plans’?
A scholarship plan generally provides a choice of investment options with varying levels of risk and return potential. Scholarship plans also have unique tax features that are not generally available to other savings and investment products.
There are pros and cons for each savings strategy. The table below is designed to help you decide between common education savings strategies.
Operating a scholarship plan, entitles Australian Unity, in effect to recover the tax paid on the Fund’s investment earnings where those earnings are used to pay for eligible education expenses. Any tax recovered is added to the amount withdrawn from the Investor Earnings account, and the combined amount is paid as the education benefit.
You have flexibility to use your funds for non-education expenses. When accessing your own contributions no personal income tax liability occurs. However, if you access your earnings, taxation implications will apply.
What do I need to declare on my annual tax return?
While invested, you are not required to declare any earnings on an annual basis unless a withdrawal is made.
How is my money invested?
You can use the default option which is the Colonial First State FirstChoice Conservative option, or alternatively the Fund gives you access to 15 investment options managed by professional Australian and international investment managers. The PDS sets out the Investment choices available.
What education expenses can I claim?
• Tuition fees: including course fees, HELP debts, private tuition, and career training
• Non-tuition fees: including student union fees, uniforms, books, materials, equipment, music lessons and instruments, sports equipment, school outings and travel expenses
• Living away from home costs: including residential boarding costs and rental accommodation
• Foreign education costs: including course electives or entire courses.
What happens when the nominated student completes their education?
If you have any funds remaining in your account, you can make a full withdrawal (excluding the Education Tax Benefit) and close your fund, or you can nominate another student to continue the gift of education.
Is there a minimum amount I can withdraw?
The minimum withdrawal amount is $500, and you are required to maintain a minimum balance of $1,000 per fund.
Can I withdraw my contributions?
You can withdraw your contributions at any time and for any purpose. Withdrawals of your own contributions are treated as a tax-free refund of capital.
Who are the parties to an education bond?
• Investor – who makes all investment decisions (multiple investors permitted). The investor can also be the nominated student.
• Plan Guardian – provides certainty about who will look after the student interests if the investor dies or becomes intellectually disabled.
• Student – intended recipient of education but has no control over the investment. The student is deemed to be the Life Insured and determines the maximum holding period of an education fund.
• Beneficiaries (optional) – receive the proceeds of a death claim – the education investment fund becomes a non-estate asset and does not require probate for the distribution of benefits.
What are the management costs?
Management fees include our administration fee of 0.7% p.a. and investment management costs charged by the investment managers, which currently range between 0.25% to 1.10% p.a. The PDS sets out the fees and charges.
What are the transaction fees?
There is no establishment fee, contribution fee, withdrawal fee or exit fee. However, you may incur an investing transaction cost (ITC) when you invest or switch into an investment option. For more information on the current ITCs please refer to the PDS.
What is a performance fee?
A performance fee is a fee charged by an investment manager if the performance of the investment option(s) they manage, exceed specified criteria or benchmarks.
Access unit price and performance information for closed funds
The Australian Unity Education Savings Fund provides access to 15 investment options managed by professional Australian and international investment managers.
Each investment option available through the Lifeplan Education Bond PDS invests into a portfolio(s) managed by appointed investment managers. The Lifeplan Education Bond PDS and Additional Information Document should be read in full before making a decision to invest.
The below provides you access to the latest PDS’s for each of the 15 investment options.
© The Lifeplan Education Bond is issued by Lifeplan Australia Friendly Society Limited ABN 78 087 649 492 AFS License number 237989 (‘Lifeplan’), a wholly owned subsidiary of Australian Unity Limited ABN 23 087 648 888.
Products are issued by Lifeplan. Information provided here is indicative and general in nature and has not taken into your account your objectives, financial situation or needs. You must read all relevant disclosure document before making any decision. Any decisions relating to a financial investment should only be based upon a consideration of your overall objectives, current and anticipated situation or needs, and should not be influenced by historical data such as past performance.
Any tax information provided here and in any disclosure documents is general in nature and is only intended to provide a guide on how tax may affect investors. Tax laws may change in the future and may affect an investor’s tax position. Investors should seek independent tax advice relevant to their circumstances.