(Australian Associated Press)

The federal government insists its plan to allow first-home buyers to save for a deposit through their superannuation won't undermine Australia's retirement savings system.

The coalition used its numbers in parliament's lower house to pass the measure announced in the May budget on Wednesday.

The legislation also allows older Australians to contribute the proceeds of the sale of their family home to their super.

Labor and the Greens are against the proposal, with the opposition claiming it will do nothing to address housing affordability.

Shadow treasurer Chris Bowen argues it will instead work to undermine the country's superannuation system, labelling it a "sham".

Assistant minister to the treasurer, Michael Sukkar, accused Labor of deliberately peddling misconceptions about the scheme.

He told MPs it was not an attack on superannuation but simply provides people with an opportunity to save more money that wouldn't otherwise be used for super.

"It's quite shocking and surprising to see any political party take a view that a tax cut for first home buyers is something that they cannot support," Mr Sukkar said.

Labor, however, said it won't stand in the way of two other housing affordability bills, both of which were announced in the 2017 budget.

They include limiting deductions investors can claim in relation to residential properties and imposing an annual fee on foreign owners if their property is vacant for at least six months during a one-year period.

Mr Bowen said there was nothing to oppose because the measures were ineffective.

"What we see here is some minor tinkering which won't do anything for housing affordability," he told parliament.

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

The chief economist at one of the big four banks warns troubled consumers will hamper economic growth heading into 2018.

Constraints on growth are likely to centre on consumers struggling under the weight of weak wages growth, high energy prices and excessive debt, says Westpac's Bill Evans.

"Conditions in housing markets, particularly in the eastern states, are likely to soften while the residential construction boom will turn down."

Mr Evans was responding to the latest Westpac-Melbourne Institute leading index, which indicates the likely pace of economic activity three to nine months into the future. It pointed to only modest growth.

"While the index only gives us a glimpse of the likely momentum in the first few months of 2018 it is consistent with our view of the likely growth environment next year," he said.

Mr Evans is forecasting growth of 2.5 per cent against Australia's long-term growth rate that's closer to three per cent.

Opposition employment spokesman Brendan O'Connor agrees there is a connection between downward pressure on wages and the effect on aggregate demand.

Wage growth is at its lowest rate in at least 20 years.

"If you don't allow wages to grow, at least to CPI, preferably beyond, you will have consumer confidence down, people not purchasing," he told the National Press Club in Canberra.

"People, therefore, will have an effect on business confidence."

The Reserve Bank expects wages growth will gradually lift as employment continues to grow.

The minutes of the central bank's October 3 board meeting showed it is confident of above-average employment growth over the remainder of 2017 based on job advertisements, vacancies and hiring intentions data.

September jobs figures are due on Thursday.

Economists' forecasts centre on a 15,000 employment increase when the September labour force report is released on Thursday following a large 54,200 jump in August.

The jobless rate is expected to remain at 5.6 per cent for the fourth month in a row

In our newest edition, we provide insights on:

Digital dangers: How to protect yourself online.
Cash flow can-do: There's more to managing your cash flow than skimming through your monthly statements.
New digital payments: A path to convenience or overspending?
Mind over matter: Overloaded with deadlines, information and responsibilities? It's little wonder that we sometimes end up on autopilot.
Salary sacrifice: Do you salary sacrifice into super or make tax deductible contributions?
Market update:  How are investment markets performing?

Click here for this Quarter's edition. 

(Feedsy Exclusive)

There are a huge variety of life insurance products on the market. Some seem to cost a lot more than others. Do the cheaper options really provide value for money?

The types of life insurance cover
Life insurance is there to provide an income for you or your family if you were to become seriously ill, be injured in an accident or die unexpectedly. In order to choose the right policy, it's important to look at your individual circumstances and decide what type of cover you need.

There are four different types of cover that are all classed as life insurance. It's possible that you might even need more one of these:

1. Life cover: This pays out a fixed amount of money when you die to the people you have named as your beneficiaries.
2. Total and Permanent Disability cover (TPD): This type of cover pays out a lump sum to you to help with your general living costs and rehabilitation if you become totally and permanently disabled. Many life cover policies also include TPD.
3. Trauma cover: Also known as critical illness cover or recovery insurance, this helps with your living costs if you are seriously injured or diagnosed with a specified, life-changing illness such as cancer or a stroke.
4. Income protection: This provides you with the income you will lose if you are unable to work as a result of illness or injury.

What you should look for in life insurance cover
As everyone's circumstances are different, you need to look for a policy that meets your individual needs. Firstly, the policy needs to be affordable, as you may not be covered if you default on any of your premiums.

However, that doesn't mean the cheapest options are always a sensible choice. You need to make sure the policy will pay out enough money for your dependants to survive on if your income was no longer there. Take into account all your expenditure such as your home loan, household bills and your children's education do your dependants have enough in savings and investments to cover these costs? Your life insurance policy should be able to make up the shortfall.

Don't forget, you may already have life insurance cover through your super fund. Before you purchase a policy, you should check if you have this cover and if it meets your needs.
If you do intend to purchase a life insurance policy, it's important to shop around and compare what different providers are offering to make sure you're getting the best deal.

The pros and cons of cheap life insurance policies
Cheap policies are often known as "term insurance." It is possible to get a good deal this way many low-cost policies do offer large payouts. However, it's important to be aware of the conditions attached.

Term policies are flexible as you can choose when you want cover you're only covered for the amount of time you keep paying your premiums. If you stop paying, however, and then want to resume your cover at a later date, it's likely to be more expensive as your increased age will make you more likely to make a claim. This is linked to another disadvantage of term policies they have time limits. When your policy runs out, you may find yourself having to pay a lot more to get a new policy

In addition, term insurance policies do not give refunds if you outlive the term of your policy without making a claim, or if you change your mind and want to cancel your policy, you won't get back any of the money you've paid in.
You should also be aware of cheap joint policies these often do not offer the same amount of cover for both partners. One of you could be left without insurance if the worst were to happen.

Do you need different cover depending on your life stage?
Your life insurance needs will change throughout your life, so it's important to have a policy that's appropriate for your age and personal circumstances. A cheaper policy can make sense if you're young and single, as you have no dependents. As you get older, however, you're likely to have more financial obligations. A partner and children might well have to be factored in, as will commitments such as a home loan, so you'll need a higher level of cover.

However, later in life, you may be able to revert to a less expensive policy, as your children will have left home and your mortgage will be paid off. In this case, your level of expenditure is lower. This means you and/or your partner would need less income in the event of you not being able to work.

Please remember, however, that life insurance policies get more expensive the older you are when you apply. Statistically, you're more likely to run into health problems as you age, which means you are more likely to make a claim.

Should you regularly review your cover?
As your personal circumstances change, your insurance needs will too. This is why it's essential to review your cover regularly to check it will provide you with the level of protection you need. This is particularly important during major life changes such as having a baby, taking out a home loan or changing your employment status, for example, if you decide to start your own business.

Life insurance is there to help you meet the challenges and experiences of life without having too much financial worry. This is why it's vital to get it right and to seek advice.

(Feedsy Exclusive)

If you pass away suddenly, your superannuation may not necessarily go to the people you want. Many people do not realise that under Australian law, the trustee of your super fund could actually have control over who gets your money when you die. So how do you make sure your super goes to the right people?

The law on super fund death benefits

Unlike the rest of your assets, your super fund is not covered in your will. This is because you don't actually own your super fund it is being held for you by a trustee. Legally, the trustee has responsibility for how your death benefit is awarded.
Most super funds allow you to nominate the person or people you want your death benefit to go to, and depending on the type of nominations you make, your super fund trustee may legally have to abide by your wishes.
However, if you fail to nominate anyone, the decision will be made by your trustee. While your trustee will usually award your death benefit to one or more of your dependants or to your estate, there are no guarantees of this. Even if they do, it is likely to take a lot longer for the beneficiaries to receive their money. It can also be the cause of fighting within your family, as some of your dependants may not receive what they think they deserve.
This is why it's highly advisable to nominate the people you want your super money to go to in the event of your death.

Who can be a beneficiary of your super fund?

Legally, only your dependants can be named as beneficiaries of your super fund. Super death benefits recognise dependants as:

• A spouse
• Children of any age, including adopted children
• Anyone else who depends on you financially, or who you have a mutual financially dependant relationship with, such as a relative who lives with you.

You can't nominate anyone who isn't classed as a dependant to benefit from your super fund. The only way non-dependants can benefit is if you name them in your will and nominate your estate as the beneficiary of your super fund.

Nominating your estate means that your super fund becomes an asset when you die, and can be divided up according to your instructions in your will, by your personal legal representative.

How to nominate beneficiaries

The first step is to check that your super fund allows you to nominate beneficiaries. If so, there are two types of nomination you can make:

• A Binding Nomination. Under a binding nomination, your trustee legally has no say in where your super death benefit goes they have to pay it to either the dependants you have nominated, or your estate. Binding nominations only last for three years, and your super fund should let you know when a binding nomination is about to expire. If you die without renewing it, your death benefit will automatically be paid to your estate and divided up according to your will.
• A Non-Binding Nomination. A non-binding nomination only acts as a guide to where your money should go your trustee still has the final say, and is not legally obliged to abide by your wishes, although most will take them into account.

Can you change your super fund beneficiaries?

You should review your nominations every time your personal circumstances change, to make sure your money will actually go to the people you want. If you get married or have children, you're likely to want to include your spouse and children as beneficiaries. Equally, if you get divorced, it's advisable to remove your ex-spouse as a beneficiary otherwise, if you die, they could benefit and your new family or other chosen dependants could lose out.

Do different super funds have different policies?

While most super funds will allow you to nominate your chosen beneficiaries, they can have different policies on this. Ultimately the decision about how your death benefit is paid, and who it is paid to, depends on the governing rules of your individual super fund. You should contact your fund to find out what their policies are.

Always a good idea to consult your Financial Adviser

Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters and consult your financial planner.