Adam and Sarah are married and have two children. They recently purchased private health cover. Sarah is a homemaker and Adam works in a telecommunication company. Adam receives annual remuneration of $98,000 and $12,286 per annum in allowable deductions. He has $100,000 worth of shares of a large company, producing a 3% annual dividend yield (fully franked). He is concerned about saving for retirement and has decided to salary sacrifice $10,000 annually to superannuation. Considering all the Medicare levies and offsets, answer the following questions.

Required:

a) How much is the total tax payable before salary sacrifice arrangement? (7 marks)

b) How much is the total tax payable after salary sacrifice arrangement? (7 marks)

c) Is it worthwhile for Adam to salary sacrifice $10,000? Explain. (3 marks)

d) Given the availability of the age pension, why does Adam need to save through his superannuation fund for retirement? (3 marks)