The Pension Loans Scheme (PLS) has been a chronically under-utilised service. A 2010 submission from Medicare identified that, despite almost 1 million Australians being eligible to use the (PLS), only 710 loans existed. In the 2018 Federal Budget, the Government announced that it plans to increase the availability of the PLS from July 1, 2019. The Budget proposal would make the PLS available to 1.5 million more age pensioners and establish the PLS a key strategy for retirees.
lients sometimes express concern that potential beneficiaries might assert that they should have received a greater share of the deceased estate. This scenario more commonly arises where there has been a second marriage in the family, or a breakdown in relationships between parents and children.
A testator cannot be guaranteed that their estate will not be challenged by a person who has been excluded from the will, or who thinks that their entitlement under the will is too small. Certain procedures can be taken to lessen the chances of this happening successfully, but beneficiaries and would be beneficiaries still may opt to challenge the terms of the will.
Preservation age increased
Preservation age has been slowly increasing since July 2016. After two years where preservation age was 56, 2018/19 sees preservation increase age again to 57. Preservation age will increase again in 2020/21.
More companies considered small businesses
The aggregated turnover threshold under which companies classify as a small business, and hence pay tax at a rate of 27.5% (as opposed to 30%), has increased. The threshold in 2018/19 is $50 million, double the 2017/18 threshold. This lower rate does not apply to investment companies.
4. Low and Middle Income Tax Offset (LaMITO) introduced
2018/19 sees the introduction of LaMITO. LaMITO will be in place for four financial years and is on top of the existing Low Income Tax Offset (LITO). LaMITO is based on the client’s taxable income and is calculated as outlined in the table below.
. Downsizer Superannuation Contributions
As part of transitioning into retirement, for many, selling the family home is a major financial and life decision.
The Government has reduced a barrier for older Australians to move from homes that no longer meet their needs. From 1 July 2018, people aged 65 and older can make a non-concessional superannuation contribution of up to $300,000 from the proceeds of selling their home. Existing contribution caps and restrictions will not apply to the downsizer contribution.
2. The Child Care Subsidy replaces the Child Care Benefit and Rebate
On July 2, the Child Care Benefit and Rebate were replaced by a single payment, the Child Care Subsidy (CCS). The Child Care Subsidy (CCS) is now the payment through which working, studying or training parents can receive government subsidies to he
The new financial year always brings change, and 2018/19 is no different. An array of rates and thresholds have moved, but this year the first week of July brings more than just incremental changes. A number of laws affecting the clients of financial planners are markedly different in the new financial year. July’s Industry Insights focusses on six of these changes planners need to know.
2017/18 has been a hectic financial year for the Financial Services industry – with the Federal Budget, we have seen new Superannuation laws introduced, the introduction of Financial Planner education requirements, and now the Royal Commission.
There are some key financial strategies for financial planners and clients to consider as part of their annual review. Whilst some strategies are very familiar, and have been around for some time, others are new or broader than they have been in previous years.
The recent proposals announced in the 2018/19 federal Budget are, generally good news for financial planners and clients. They present opportunities for clients to potentially utilise extra cash-flow to help them achieve financial goals and objectives.