The maximum balance a superannuation member can move into the tax-free retirement (pension) phase is presently $1.9 million. This is due to a limit introduced in 2017 known as the Transfer Balance Cap (TBC). Indexation of the general TBC to $2 million will occur on 1 July 2025. We explore some of the implications below.
A testamentary trust is a type of trust that is created through a person’s Will and takes effect upon death. Depending on your financial circumstances, this structure can provide the beneficiaries certain advantages in addition to an inheritance
Due to changes implemented in 2017 to limit the tax benefits of a transition to retirement pension, this strategy has received less attention in recent years. However, it remains a strategy that can assist those who have reached their ‘preservation age’ to have access to superannuation benefits without the requirement to leave a job or…
The Commonwealth Seniors Health Card (CSHC) is a federal government concession for self-funded retirees, allowing access to cheaper health care and other discounts. The card is income tested and valid for a 2 year period once granted.
Legislation enabling super to be paid on Commonwealth funded Paid Parental Leave has now passed. First announced earlier in the year (2024), the payment of superannuation aims to assist in reducing the impact of parental leave on retirement outcomes. This additional initiative expands on the improved Paid Parental Leave scheme and is summarised below.
Back in 2018 the government introduced the ‘Downsizer Contribution’ to enable home owners to contribute up to $300,000 into superannuation following the sale of their residence. This was originally subject to a minimum eligibility age of 65, however over time this condition has been reduced to age 55. Accordingly, given the opportunity available, according to…
The total value of the superannuation pool has been growing significantly. With this comes a typical question covered in financial advice circles; ‘How does my superannuation get paid in the event of death’. A common misconception is that a will automatically deals with an individual’s superannuation assets. So how can you ensure that your retirement…
High income earners will be familiar with the somewhat dreaded ‘Division 293 tax’. However, Division 293 tax does not only apply to those people who derive substantial income from employment or self-employment. The additional tax bill can crop up as a result of taxable income from other sources, including investment income, capital gains and other…
With 2023/24 done and dusted and the new financial year upon us, it is a great time to review and kick start some financials goals. The new financial year brings income tax cuts under the rollout of the revised Stage 3 plan. In addition, the concessional and non-concessional contribution caps have lifted. However, how can…
The 30th of June is fast approaching. However, as we have yet to reach the end of the financial year, it’s not too late to think about generating some additional tax deductions for the 2023/24 year. If you expect your marginal tax rate to reduce from July 2024 as a result of the stage 3…
The End of Financial Year (EOFY) is once again fast approaching – providing an opportunity to review your position ahead of the new year to come. Given the inevitable June end rush, as well as processing and cut-off times, we believe it prudent to consider important actions in advance of deadlines. The following is an…
As part of the government’s response to the financial impacts of COVID-19, a temporary reduction to the minimum pension drawdown requirements were implemented. During the previous four financial years, minimum drawdown rates were halved. This is the first financial year since 2018/19 that minimum pension payments return to their normal calculations.
Outside of relying on investment returns, the best way to ensure that your retirement assets grow over time is through superannuation contributions. There are two main types of contributions – concessional and non-concessional. Following the release of Average Weekly Ordinary Time Earnings (AWOTE) data, the required increase has occurred such that the contribution caps will…
As we move closer to the end of the financial year, attention often turns towards personal tax planning. This is where the use of concessional contributions and even carry forward concessional contributions can be particularly useful. With income tax cuts beginning 1 July 2024 on the horizon, the flexibility afforded with the current rules are…
A query that surfaces occasionally comes to gifting money to adult children. It is common for people to be aware that there are certain rules surrounding gifting, but it is important to note that the limits don’t necessarily apply to all situations.
When it comes to building up assets within superannuation, most people acknowledge that their regular employer contributions do a large portion of the work. Separate to this, non-concessional contributions can also provide significant opportunities. The important rules associated with making non-concessional contributions are highlighted below.
In a perfect world, the superannuation balances of spouses would be fairly evenly matched, but often due to differences in work histories this isn’t the case. Fortunately, there’s a way to help equalise balances with a strategy known as superannuation Contribution Splitting.
Superannuation law sets out who a death benefit is payable to, whilst taxation law sets out how a death benefit is taxed. Death benefit tax can apply if superannuation is paid to a non-tax dependant. This means that when adult children inherit your superannuation, they will likely have tax to pay. To reduce this potential…
Over the past four completed financials years up to 30 June 2023, the Government reduced the minimum annual payment required for account based and market linked pensions. For the current 2023/24 financial year, the 50% reduction in minimum pension drawdowns no longer applies. This throws up some considerations for retirees and those transitioning into retirement,…
There are a number of loans available from the Australian Government to help people complete further training and study. A HECS-HELP loan can pay for study when attending university or an approved higher education provider. On 1 June 2023, existing loans were indexed at a rate of 7.10%. We outline some considerations within the below.
An Enduring Power of Attorney (EPA) is a valuable estate planning tool that grants trusted individuals the ability to make important decisions regarding your financial and legal affairs in the event that you are unable to make decisions. Its enduring nature is what sets it apart, as it remains in effect even if you become…
The End of Financial Year (EOFY) is once again fast approaching – providing an opportunity to review your position ahead of the new year to come. Given the inevitable June end rush, as well as processing and cut-off times, we believe it prudent to consider important actions in advance of deadlines. The following is an…
The maximum balance a superannuation member can move into the tax-free retirement (pension) phase is presently $1.7 million. This is due to a limit introduced in 2017 known as the Transfer Balance Cap (TBC). This cap will be increased by $200,000 with effect on 1 July 2023. However, this new TBC won’t apply to everyone….
It is well understood that the purpose of superannuation is to have money put aside to utilise in the retirement years. Superannuation provides ongoing tax advantages and an income post employment – an incentive to lower the overall reliance on the Government Age Pension. But with the substantial and favourable tax concessions in view, and…
Similar to making a will, undertaking a care planning process can allow you to communicate preferences for treatment and care. Advance Health Directives and Enduring Powers of Guardianship assist in planning for future personal, lifestyle and treatment decision-making. These documents can ensure that in the event of incapacity, all aspects of an individual’s life can…
The Work Bonus is an assistance measure for working age pensioners. For those eligible, it ensures that a portion of any income received from gainful employment does not count towards Centrelink’s income test. We summarise how the Work Bonus works, and highlight a recent alteration to the rules.
The recent Federal Budget delivered on the 25th of October 2022 saw limited new measures and implications for superannuation and taxation. However, there was one announcement that has gone a little under the radar that will impact super funds, retirees and low-taxed individuals.
In 2018 the government introduced the ‘Downsizer Contribution’ which enables home owners aged 65 and above to contribute $300,000 to superannuation following the sale of their home. The purpose of this was to increase specific housing supply whilst providing those who meet the eligibility requirements the potential to increase their retirement savings within the superannuation…
Driven by contributions and fund earnings, the total value of the superannuation pool has grown significantly over recent decades. With this comes a typical question covered in financial planning circles; ‘How does my superannuation get paid in the event of death’. A common misconception is that a will automatically deals with an individual’s superannuation assets….
When reviewing insurance, most of the time the focus is on the primary income earner. However, have you thought of the unfortunate situation where the primary care giver is no longer able to run the household and/or look after the children?
As we’ve just started a new financial year, it is worth exploring some positive changes to the superannuation contribution rules that are set to create significant opportunities for those aged between 67 and 75. The legislative changes come with trips and traps so let’s look at them in further detail.
The End of Financial Year (EOFY) is once again fast approaching. This means it is time to dust off the superannuation to-do list ahead of the 30th of June 2022. Given the inevitable June end rush, as well as processing and cut-off times, it is prudent to review actions in advance of deadlines. The following…
Super Guarantee (SG) is a legislated obligation for employers to provide superannuation support to Australian workers. The required minimum super contribution is set by the Government and presently sits at 10% of ordinary times earnings. SG contributions are classified as employer contributions, and these amounts count towards the employee’s concessional contribution cap (i.e. $27,500 for…
With a Federal Election looming, the Government has unveiled a budget to assist millions of Australians facing rising cost of living pressures. The measures announced include a cut to fuel excise, cash payments for pensioners and more generous tax concessions for low-and middle-income earners. Tied in with these temporary measures, the Government is also expecting…
As part of the government’s response to COVID-19, legislation was passed to allow a 50% temporary reduction to the minimum pension drawdown requirements. This was designed to assist retirees navigating volatile markets who do not wish to sell their investment assets while the value of those assets is reduced. As we move closer to the…
As we move through the second half of the financial year, attention often turns to reviewing the merits of additional contributions into superannuation. When it comes to building a superannuation fund, most people acknowledge that their regular employer contributions do a large portion of the work. Non-concessional contributions can also provide significant opportunities. The important…
Having a will and effective estate plans in place is one of the most important things you can implement for yourself and your family. However, many people give little consideration to structuring their estate plans in a proper manner. This may be for a variety of reasons, including being busy with other matters, finding it…
As a result of changes in legislation, self-managed super funds (SMSFs) are now able to have up to six members. Previously, the maximum number of members was limited to four. This may increase the popularity of the concept of the ‘family super fund’ – where parents allow their adult children to become members of the…
With housing affordability presenting challenges in many parts around the country, the First Home Super Saver (FHSS) scheme allows eligible individuals to utilise superannuation to save some of the money required for a home deposit. The premise of the Government initiative is to assist buyers to accelerate their savings within the concessional environment of super….
On the back of a strong rebound in profits, some of Australia’s biggest companies are in the midst of large share buy-backs. With buy-backs, the company can purchase the shares on the market or from shareholders directly (‘off-market’). For investors, making the decision to participate in these buy-backs comes down to many factors, some of…
In 1978, Australia abolished “death duties”, being taxes upon the estates of decedents. However, this doesn’t mean that taxes are not payable when individuals inherit wealth. There are numerous taxes that apply to estates, such as those payable on superannuation proceeds and capital gains on disposal of certain assets. Within the below, we highlight some…
With 2020-21 done and dusted and the new financial year upon us, there are a number of important superannuation and tax changes that have come into effect. We summarise the legislative implications, some of which may prompt a review of ongoing planning. It is also critical to note that announcements made in the recent 2021…
Sequencing risk is the risk that the order and timing of investment returns on a portfolio are unfavourable. In other words, sequencing risk is the risk of a negative return at the worst possible time.
Parents and grandparents commonly wish to invest for their children or grandchildren while they are still minors. However, minor children usually cannot buy shares in their own name. Structuring such investments can have access and tax consequences so determining the ownership and investment setup is considered important to the long-term success of the strategy.
As we move closer to the end of the financial year, attention often turns to tax planning and reviewing superannuation contribution opportunities. It is also worth noting contribution cap changes that will apply from 1 July 2021. Feel free to contact your adviser if you have any queries.
The maximum balance a superannuation member can move into the tax-free pension phase is presently $1.6 million. This is due to a limit known as the Transfer Balance Cap (TBC). Although this limit is being indexed and set to increase to $1.7 million from 1 July 2021, this won’t apply to everyone. We explore some…
The health crisis seen over the past 12 months has caused widespread disruption, with economic damage still being assessed and confronted. Whether we are savers, spenders or investors, there are many personal finance lessons we can learn from these events. This month’s ‘Focal Point’ covers off on a few of these lessons and makes for…
As part of regulation changes announced by the Government during the beginning of the COVID-19 crisis, minimum pension drawdown rates were halved for the current financial year. This offers additional flexibility for retirees managing their income strategy. In this month’s “Focal Point” we highlight some of the considerations surrounding the temporary changes.
Commissioned in September 2019, the Federal Government released the findings from its independent Retirement Income Review on Friday, 20th November 2020. The report assesses the performance of the retirement income system, which encompasses three pillars: compulsory superannuation, a means-tested age pension and voluntary savings (including home ownership).
Decisions are part of every day life. But what happens if we cannot make decisions for ourselves due to illness or accident? Although an Enduring Power of Attorney can be used to manage financial and property assets, this does not extend to health and medical treatment. We explore additional documents which may allow effective decisions…
Under the COVID-19 Superannuation Early Release Scheme, people who have lost their jobs or suffered a significant drop in their income have a second opportunity to access up to $10,000 from their retirement savings. With the application period for the current financial year extended to 31 December 2020, the demand for access has outstripped initial…