The new financial year always brings change, and 2019/20 is one of the more dynamic in recent times. An array of rates and thresholds have moved, but the first week of this July brings more than just incremental changes. A number of rules affecting the clients of financial planners are markedly different in the new financial year. This month there are a dozen of these changes that planners need to know about;

1. Means-testing concessions for lifetime income streams go live

Lifetime income streams purchased on or after July 1, 2019 are subject to different social security rules than those purchased prior to that date. Asset test concessions of 40 per cent up to the owner’s 85thbirthday, and 70 per cent thereafter, as well as an income test concession of 40 per cent, are an attractive proposition for some clients.

In the past fortnight, the Department of Social Services has announced how innovative income streams issued through super will be assessed under these rules. Where such income streams are effectively a hybrid of a lifetime and an account-based or term income stream, only the lifetime portion will be eligible for the concessions. Centrelink will assess an innovative super income stream as multiple income streams.

Both the rules governing innovative superannuation income streams, and the social security means-testing concessions, are complex and require deeper analysis.

The information contained in this publication is based on the understanding KeyInvest (ABN 74 087 649 474 AFSL No. 240667) has of the relevant Australian legislation as at the date shown in this publication.

The information contained in this publication is of a general nature only and is intended for use by financial advisers and other licensed professionals only. It must not be handed to clients for their keeping nor can any copies of sections of this publication be given to clients. KeyInvest is not a registered tax agent under the Tax Agent Services Act 2009. We recommend that your client be referred to their registered tax agent or legal adviser prior to implementing any recommendations that you may make based on the information contained in this publication.