What does the election result mean for our super?

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With the return of a Coalition government, we can expect to see some of the super initiatives announced in the 2019 Budget, and in legislation that lapsed when the election was called, being reintroduced to the Parliament.

So, we can expect to see:

Increase in contribution age limits

The 2019 Budget included a proposal for people aged 65 and 66 to be able to make super contributions without having to meet the current “work test”. This proposal is now expected to be introduced to Parliament in the near future. It is due to take effect from 1 July 2020.

 

Extending the age limit for the three-year bring forward

Under current law, an eligible person may bring forward up to three year’s non-concessional contributions and contribute up to $300,000 in one year, provided they were aged 64 or younger at the start of the financial year in which they make their contribution. This age limit is to be extended to 66 from 1 July 2020.

 

Extending the age limit for spouse contributions from 69 to 74

People who make contributions for an eligible spouse up to 74 years of age will be able to claim a tax offset of up to $540. The age limit is being increased from the current 69 years. This will apply from 1 July 2020, however, a receiving spouse aged 67 or older will need to have met the work test.

 

Insurance opt-in

While legislation affecting insurance held inside super for people with an inactive account (haven’t made contributions for 16 months) has already been enacted. We can expect to see the measures extended to those with account balances less than $6,000 and for members under 25 years of age.

In each case, members will need to opt-in if they wish to have insurance cover through super.

 

SMSF membership to extend to 6 members

The legislation relating to the increase of SMSF membership to 6 people (up from 4) lapsed when the election was called. We can expect to see this legislation being re-introduced into the new Parliament.

 

Opting out of Superannuation Guarantee

Where high-income earners work for more than one employer, their superannuation guarantee contributions often result in a breach of the concessional contribution cap. The Government has plans to allow affected employees to opt-out of superannuation guarantee for all but one employer so as to avoid breaching the concessional contribution cap of $25,000.

 

Salary sacrifice arrangements

Integrity measures covering aspects of salary sacrifice contributions to super and their potential impact on superannuation guarantee contributions lapsed when the election was called. We can expect to see these measures reintroduced by the new Coalition government.

 

If you have questions about these proposed measures, and opportunities they present, you should consider meeting with a qualified financial planner.

 

Source:  Peter Kelly | Centrepoint Alliance

Carers – are you eligible for a government payment?

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As we age our bodies and minds start to become a little less stronger. We will find that we are relying on care provided by relatives, our partners or by the government.

The role of the individual carer is extremely important and in many cases, a selfless act for a person that they love.

There are 2.7 million unpaid carers in Australia of which approximately 856,000 are primary carers, those who provide most of the ongoing informal assistance to a person. Two-thirds of these primary carers are females with an average age of 55.

To assist these unpaid carers, the government does offer three payments. These payments will depend on the carer’s circumstances and the level of care that they are providing.

The first of these payments is the Carer Payment. This payment is similar to the age pension and is subject to the same income and assets test that is applicable to the age pension. However, there is also an income and assets test which is applied to the care receiver and if the care receiver’s income and assets are above these levels then no Carer Payment can be made to the carer. The current maximum Carer Payment for a single person is $916.30 per fortnight.

The second payment is the Carer Allowance. This is a fortnightly payment, currently $129.80 which can be paid in addition to the Carer payment, is not subject to an assets test but is subject to an annual adjusted taxable income threshold of $250,000.

The third payment is the Carer Supplement which is an annual lump sum payment of $600 paid to assist with the costs of caring for a person with a disability or a medical condition. You are entitled to this payment if you are receiving either the Carer Payment or the Carer Allowance.

All these payments are subject to the provision of medical evidence to show that the care receiver does have a severe disability, medical condition or is very frail in their old age and do require substantial daily care.

This is a complex area, so if you feel that in your current situation you are providing a substantial level of care for a parent, partner or any person, you may qualify for one or all three payments, do not hesitate talk to someone who is able to help and provide direction.

Source: Mark Teale | Centrepoint Alliance