Financial Savvy

Mark it in your diaries ladies.. FRIDAY 31ST MAY + FRIDAY 21ST JUNE!

We are hosting a FREE seminar for women who would like some education on their finances + most importantly their financial security!

Our in-house Financial Planner, Samantha Butcher will be covering topics such as:

  • Women’s Money Challenges
  • Life Events + Women
  • Women’s Money Goals
  • The Need for Insurance
  • Tax Effective Ways to Contribute to Superannuation
  • Superannuation Beneficiaries
  • Superannuation Investment Options
  • Budgeting/Credit Card Debts
  • Wills + Powers of Attorney

Refreshments included + all children welcome!

LIMITED TICKETS VIA EVENTBRITE: https://www.eventbrite.com.au/e/financial-savvy-tickets-62243498981

Cyber Security – How Not To Be An April Fool

Do you know how valuable you are?  Identity thieves do!

Every year thousands of Australians have their identities stolen.  Criminals use stolen personal information to commit identity crimes.  This can leave their victims with a bad credit rating and impact their ability to gain finance, run a business, or access government services.

Once your identity is stolen it can take a long time to recover.  The same goes for your business, staff and client information and ensuring that this is also secure.  If your data is lost or compromised, it can be extremely difficult as well as very costly to recover.

The Australian Taxation Office (ATO) along with the leading industry bodies, consultation with the Cyber Security Working Group (CSWG), a group of tax practitioner industry groups and other partners, such as software developer associations have created a list of top identity security tips to help keep you, your information and your business safe.

Some tips and tricks for Individuals to consider:

TREAT YOUR PERSONAL INFORMATION LIKE CASH

Do not leave your personal information lying around. If your personal information is stole, it is very difficult to get back.  Keep your personal information private.  Only share it when you are required to, and only share it through authorised processes and to authorised people.

Some tips and tricks for Businesses to consider:

REMOVE SYSTEM ACCESS FROM PEOPLE WHO NO LONGER NEED IT

Immediately remove access for people who; no longer work for your business or have changed positions and no longer require access.  Unauthorised access to systems by past employees is a common cause of identity security or fraud issues for businesses.

DO NOT USE USBS OR EXTERNAL HARD DRIVES FROM AN UNFAMILIAR SOURCE

USBs and external hard drives may contain malware, which can infect your business computers without you noticing.  It can cost your business a lot of money to repair the damage.  Stolen information could be used to commit crimes, often in your business’s name.

Some tips and tricks for both individuals and businesses to consider:

ENSURE YOUR PASSWORDS ARE STRONG AND SECURE

Use multi-factor authentication where possible.  Regularly change passwords, and do not share them.  Multi-factor authentication required used to provide multiple pieces of information to authenticate themselves – for example, a text message sent to your phone when logging in to a website.  An additional layer of security on your accounts can make it harder for others to access your accounts.  Strong passwords with a mix of upper and lower case letters, numbers, and symbols also make your accounts harder to hack.

ENSURE ALL DEVICES HAVE THE LATEST AVAILABLE SECURITY UPDATES

Run weekly anti-virus and malware scans and have up-to-date security software.  Instances of malicious software (malware) are increasing.  It can be easy to accidentally click on an email or website link which can infect your computer.  In some instances, your device may be impacted by ransomware.  Ransomeware can; lock your computer until you pay a fee to criminal and/or install software which provides access to your bank accounts, allowing criminals to steal your money.

USE A SPAM FILTER ON YOUR EMAIL ACCOUNT

Always use a spam filter on your email account and do not open unsolicited messages.  Be wary of downloading attachments or opening email links you receive, even if they are from a person or a business you know.  They can infect your computer with malware and lead to your business or client information being used to commit fraud.  Spam emails can be embedded with malware and/or used to trick you into providing information, paying fraudulent invoices or buying non-legitimate goods.

SECURE YOUR WIRELESS NETWORK

Be vigilant when using public wireless networks.  Avoid making online transactions while using public or complimentary wi-fi.  Not all wi-fi access points are secure.  By making online transactions (such as online banking) on an unsecured network, you can put your information and money at risk.

BE VIGILANT ABOUT WHAT YOU SHARE ON SOCIAL MEDIA

Keep personal information private and be aware of who you are interacting with.  People are accustomed to sharing personal information on social media.  The same goes for many businesses as they also now have a social media presence.  However, before sharing ask yourself if it is information you want strangers to have access to.  It is very easy for information on social media sites to be shared outside of your network, even when your security settings are set to private.  Scammers can take information you publicly display and impersonate you or your business.  Impersonators may send emails to trick your staff into providing valuable information or releasing funds.

MONITOR YOUR ACCOUNTS FOR UNUSUAL ACTIVITY OR TRANSACTIONS

Check your accounts (including bank accounts, digital portals and social media) for transactions or interactions you did not make, or content you did not post.  If an organisation you deal with sends you an email alerting you to unexpected changes on your account, do not; click on included hyperlinks or open any attachments.  You should immediately; check your account and contact the organisation by phone.

ENSURE YOUR MAIL IS SECURE

Ensure your mail is secure and consider using a secure PO Box.  Mail theft is a leading cause of personal information security breaches.

DO NOT DOWNLOAD PROGRAMS OR OPEN ATTACHMENTS

Some programs contain malware that can infect your computer, or be used to harvest your personal and business information.  Be sure you are downloading authorised and legitimate programs.  Unless you know the program is legitimate, do not open attachments or download it.

DO NOT LEAVE YOUR INFORMATION UNATTENDED

Secure your electronic devices wherever you are.  Your personal information can be taken in an instant.  In some situations, you won’t even know it was stolen.  Make sure you; do not leave electronic devices unattended, secure your electronic devices with passcodes and securely store portable storage devices (such as thumb and hard drives) when not in use.

 

Source: Australian Taxation Office (ATO)

Superannuation – Is It Still Worthwhile?

The constant changes to superannuation can be frustrating to many as they find it difficult to maintain their confidence in the superannuation industry.  Many have chosen to put the bare minimum into superannuation with their preference to build for their nest egg outside superannuation where they have full control and access without impact from the changes to superannuation.  However, is superannuation still a worthwhile consideration?

Currently, compared to other tax structures available, such as companies, trusts and partnerships, and personal tax, superannuation is still one the best tax structures available for many and should not be discounted.  All income in superannuation is taxed at a fixed rate of 15% and capital gains can be taxed as low as 10%.  If you commence receiving a pension for superannuation then all the income and capitals gains will be taxed at 0% up to the $1.6 million cap.

So are you taking full advantage of the changes to superannuation available to you?  Due to the many changes, it can be easy to overlook what you may be eligible for and what may impact you. Below are some things that may be relevant to you:

  • Tax Deduction for personal contributions – You may claim a tax deduction for personal contributions up to the concessional contributions cap of $25,000. Note, if you aged between 65-75 years you will need to meet a work test in order to claim a tax deduction.
  • Super Co-contribution – you may be eligible for a co-contribution of $500 if your total income is less than $37,697 and you make personal contribution of $1000 to your super. If your income exceeds $37,697 but is below $52,697, you will receive a reduced co-contribution.
  • Low Income Superannuation Tax Offset – a tax offset up a maximum of $500 is available to individuals with an adjusted taxable income of $37,000 or less. As long as your fund has received and reported a concessional contribution and you have lodged your tax return, the ATO will pay this directly to your superannuation account.
  • Low Income Spouse Tax Offset – a tax offset up to a maximum of $540 is available to individuals who make personal contributions to super on behalf of their spouse and their spouse’s income (including fringe benefits and reportable employer super contributions) is $37,000 or less. Where the spouse’s income is $40,000 or less but exceeds $37,000, a reduced tax offset is available.
  • Downsizer contributions – if you are aged 65 years or over and have sold your personal home, you may be eligible to make a downsizer contribution to your superannuation of up to $300,000 from the proceeds of selling your home.
  • Rolling 5 year concessional contributions – If you have a super balance of less than $500,000, you can make additional catch-up concessional contributions if you have not reached your concessional contributions cap in previous years. This applies from 1 July 2018.
  • Division 293 tax – high income earners pay an additional tax if their income exceeds $250,000. Income for the purposes of Division 293 tax includes taxable income, reportable fringe benefits, net financial investment/rental property loss, net amount of which family trust distribution tax has been paid, super lump taxed elements with zero tax rate.

If you have the long term goal to build for wealth and your retirement, superannuation should be considered as part of your financial plan.

If you would like further information on how to do this or would like to discuss a self-managed superannuation fund, please contact our team.

 

Helen Yau – Accountant Manager & Financial Planner

CA, BComm, Dip FP, SSA

Love + Insurance… Looking After The Ones You Love

When you think of love, it’s not common to think straight away of your insurance!  You think of family, friends, and good times.  However, should something happen to you, it is important that your loved ones be protected and looked out for.

In Australia, there is a massive underinsurance issue. Approximately 95% of Australians are underinsured.  Only a third of the working population (12.5M) have income protection, which means that there are around 8.3M workers that are not adequately insured if they were unable to work due to injury or illness.  Employees have sick leave, but self employed people don’t get that luxury meaning if they are sick and can’t work, they don’t get any income.  A survey by finder.com.au was undertaken and it’s results showed that 55% of the population couldn’t survive not working after a period of 3 months.  This is an average, because older people that are more financially sound have greater scope, whereas the younger population have lesser scope to cover that period of time.

If you think as an example that the average default superannuation cover provided by industry funds lies around the $200,000 mark, and the average sum insured deemed relevant by a 2015 Rice Warner study was $680,000, you can see that there is a massive shortfall.  In a family with a mortgage and children involved, only holding $200,000 of cover would leave them in a detrimental hole.

There are some myths around having insurance, and that I feel is partly the reason why people tend to avoid it:

1. Insurance policies are extremely costly – What people don’t understand is that more often than not, knowing someone that has insurance and is paying $x in premiums, has a completely different set of circumstances to you.  Whether this relates to age, sex, smoking status, occupation, income, or health situation.  All of these factors impact on what premiums will come out to be.  On top of this, people don’t realise that they necessarily have to fund the premiums from their personal cash flow, there are other alternatives to explore.

2. Insurance companies never pay out claims – This is a huge fallacy when it comes to insurance.  You really only ever hear about the non paid claims on A Current Affair or the ABC, not the hundreds of millions and even billions in insurance claims that companies pay out each and every year.  Each company releases these stats on a periodic basis and it is easily attainable.  The main reason that cover may not be paid out is due to non-disclosure.

3. It’ll never happen to me – Around 20% of Australian families will be hit by an unforeseen event that will leave them unable to work, whether it is the death of a parent, injury, accident or illness.  Everybody knows someone that has been affected by cancer, or had a friend, family member or colleague that has known someone that has tragically passed away, leaving behind a trail of destruction for their surviving family members.

Ensure that you look after your loved ones and review your insurances.  Whilst there is a strong case of under insurance in Australia, there are people that are over insured, and paying more than they need to.

Please get in touch with our team to review your situation, there is no cost associated with doing so, and we may be even able to save some money, or re-structure your situation.

 

Steve Reynolds – Certified Financial Planner

BComm, Dip.FS(FP)

New Year Resolutions that Will Make A Real Difference To You + Loved Ones

Now that the dust has settled on what was hopefully a fun-and-family-filled Christmas and New Year period, it is a great time to reflect on those hastily-made New Year’s resolutions, and consider the difference it will make if you actually see them through.

Perhaps you resolved that in 2019 you will exercise more, quit smoking, drink less, or spend less time looking at your phone.

For others, you may have decided that 2019 is the year you get your personal, financial or business affairs in order. That may include getting those Wills and Powers of Attorney prepared (which you’ve been meaning to do for years), getting that accounting or financial advice you know will make a difference, or kick-starting that business which you’ve been daydreaming about.

Now these are New Year’s resolutions that will make a real difference to you, your loved-ones, your financial health and your current/future employees.

The most important part is getting the process started. The second-most important part is making sure that each of the elements of your plan complement, and do not contradict each other. For example, the superannuation or asset planning which you undertake with an accountant or financial advisor should be reflected in your will, your business plan should be supported by adequate funding arrangements and succession agreements, and your business tax planning and compliance must be complemented by appropriate employment agreements for your staff.

Ideally, this means you should be seeing a lawyer, accountant and financial adviser contemporaneously, and have them talk to each other to ensure each element is consistent. But who has the time and energy for that?

This is where Canny Group can help you stick to your New Year’s resolutions. We have a team of experienced accountants, lawyers and financial advisers under one roof who are ready to listen, identify your needs or the needs of your business, and work cohesively to get your affairs in order, or your dream off the ground, for the best possible start to 2019.

 

Stefan Manche

Senior Associate Solicitor – LLB, BComm (Finance) 

We Bring Home an International Award

The PANALITIX conference is a premier annual even where accountants from across the globe converge to learn on accounting best practice from industry influencers, thought leaders, technology and solution providers as well as international outstanding accounting firms.

Directors, Amanda Wilkens and Krystine Canny-Smith and Manager Helen Yau travelled across the globe to San Diego in November to take part in the conference.  Not only bringing back extra suitcases and excess baggage, they also managed to bring home the Best in Team Development Annual Award for 2018 from 12 awards.

The ‘Best in Team Development’ category aims to reward those who strive to create an amiable work environment for their team, while consequently providing continuous team development and engagement, resulting in business growth.

http://atthepac.com/thepac-awards/

The History Behind Our New Home

Following on from our exciting announcement last month, we sat down with Cam Hamilton of the David Hamilton Property Group (DHPG) to find out the history behind our new home and why he’s so passionate about what he does.

 

WHAT DOES THE DHPG DO?

We specialise in the purchase and development of under utilised buildings in Geelong, from there we turn them into transformations of vibrant commercial office spaces.

WHAT IS THE STORY BEHIND THE FEDERAL MILLS?

The Federal Mill opened in 1915 and was built by the Commonwealth Government to manufacture woollen cloth for the Australian Army Uniforms for World War One.  In 1923 it was sold into private hands and continued to be a successful textile manufacturer under various ownership right up until the 1970s.

The David Hamilton Group purchased The Federal Mill in 2013 in a derelict state and began the restoration of the site.  The buildings themselves were in reasonable condition but the site was littered with rubbish and many of the original fittings had been removed.  To date we have completed about 75% of the renovation works and we house many new local businesses.

WHAT WAS IT ABOUT THE FEDERAL MILLS THAT ATTRACTED THE DHPG?

The Federal Mills presented a fabulous challenge to restore the buildings to their former glory and create a new story in Geelong.  The design of The Federal Mill was quite innovative in that it was single story and designed to optimise natural light and ventilation, which was a departure from the multi story factories built in those dates.  Today those same design qualities attract new tenants from within Geelong and nationally to set up their tech-based businesses here.  It’s a perfect environment for the new breed of entrepreneurs and start-ups in Geelong.

WHAT DO YOU LOVE ABOUT YOUR JOB?

Purchasing a property with a clear vision of what we want to achieve, seeing that project through to completion and then leasing all the tenancies.  Sometimes the more successful projects can be the ‘ugly ducklings’ so I get a lot of satisfaction transforming them into great investments.

WHAT’S PLANNED FOR THE FUTURE OF THE DHPG?

We are forging ahead with our vision for the Pivot City Innovation District which is our ‘big picture’ vision for the PowerStation, Federal Mills and the Glasshouse (old Pilkington’s building) as well as a number of renovations of four buildings in Newtown and the CBD.

 

 

Header Image: ‘Federal Woollen Mills’

Image courtesy of Geelong Heritage Centre

Our New Home in 2019

We have an exciting announcement to share with you…but before we start, lets rewind to 1960.

We started from humble beginnings, with our founder, Stan Canny working from the offices of business clients before moving to a portable office cabin on Station Street. The business grew fast and there was a clear need for a bigger premises. This brought us a few hundred metres down the same street to what is still our current office at 10 Station Street, Norlane.

Fast forward almost 59 years later and we are in need for an even bigger premises and we’re pleased to announce that Canny Group is re-locating to new offices located in the Federal Mills business precinct in 2019.

The decision to relocate was not taken lightly, but the move to Federal Mills was an easy one, as we could continue our proud heritage which is nearing close to 60 years of commitment to our clients and our northern suburbs community.

As we have always done, we look forward to sharing the next exciting chapter of our story with you and we can’t wait to welcome you in 2019 to our new home at The Federal Mills.

We will write to you again just before Christmas with our new address and the date we will be opening our new doors.  In the meantime, should you like any further information on the move, please contact us on 03 5278 9500.

Kindest regards,

Amanda Wilkens & Krystine Canny Smith
Directors

Superannuation Beneficiaries and their importance

Not a lot of people are aware that superannuation is a non-estate asset. This means that it will not automatically be dealt with, through your Will if you were to pass away. It could be your wish that your partner receives your superannuation, and you could state in your Will that that is what you want to happen, but without a valid beneficiary nomination on your superannuation fund, the Trustee of the fund may grant your money elsewhere.

There are several varieties of nomination, including non-binding, binding, and non-lapsing binding beneficiary.

Nomination of Beneficiary

A ‘Nomination of Beneficiary’ is a direction that a member provides to the Trustee of the super fund in relation to distribution of his or her funds on death. It can be done by a simple one page document setting out the member’s preference and appropriately signed and witnessed.

A member can choose to make:

A Binding Nomination

  • The Trustees MUST pay the death benefit as nominated.

A Non-binding Nomination

  • The Trustees have the discretion to follow the stated wishes of the member or direct the entitlements to another person (or persons) or pay the entitlement directly to the Estate.

No Nomination

  • If you do not make any nomination, you are not breaking any Laws. The surviving Trustees simply have full discretion to distribute the funds to the Estate or any Dependent that they chose.

As important as it is to ensure that you have nomination made, it is important to make sure that it is a valid nomination.

 

Who can I nominate?

There are restrictions on who you can nominate under the Superannuation Industry Supervision Act (SIS). Valid nominations can be made to:

  1. The Legal Personal Representative in which case the benefit is paid to the Estate; or
  2. A dependant which is defined as follows:
  • Spouse (current or de facto or former spouse and can include same-sex and living with a person in a genuine domestic basis in a relationship as a couple);
  • A child of the member (including adopted, stepchild, ex-nuptial, child of your spouse);
  • Any other person with whom the member has an interdependency relationship, which covers persons where there is a close personal relationship and one or more provides the other with financial support, domestic support and personal care. We recommend seeking advice if you have circumstances that you think may qualify.

Common mistakes that we see are Nominations being made to parents, brothers or sisters or other relatives, but there is no interdependent relationship so the Nomination is invalid. A Nomination can have “if, then” clauses to allow you to nominate persons should certain beneficiaries have already passed away – such as “100% distribution to my spouse. If I survive my spouse, or if I divorce from current spouse, then distribute to my children on equal proportionate basis”.

So please ensure that you review your beneficiaries and ensure that they are the right type for your situation, and valid. If you would like to update your superannuation beneficiaries or have a chat to one of our financial advisors, we are always here to help. Please get in touch with our team.

 

Steve Reynolds – Certified Financial Planner

BComm, Dip.FS(FP)

Downsizing your home and contributing to superannuation

The downsizer superannuation contribution applies to those aged 65 years or over. Who may want to contribute some of the proceeds from the sale of their home to superannuation.

Legislation enabling the downsizer superannuation contribution measure was passed in December 2017. This meant, people aged 65 and over, who sold their principal/main residence could contribute up to $300,000 each to their superannuation fund from the sale proceeds.

The downsizer superannuation contribution may appeal to those individuals who previously could not contribute to the tax-advantages superannuation provides. Mainly due to age based eligibility and work test restrictions.

Eligibility requirements

The downsizer superannuation contribution eligibility criteria:

  1. You must enter the contract to sell the property after 1 July 2018.
  2. You make the downsizer superannuation contribution when your are 65 years of age or older.
  3. The property must be located in Australia and cannot be a caravan, mobile home or houseboat.
  4. You and/or your spouse must have owned the home for at least 10 years prior to the sale.
  5. The property is the person’s main residence. Or is eligible for at least a part main residence capital gains tax exemption, including a residence purchased pre-September 1985.
  6. An election form is provided to your super fund before or with the contribution.
  7. You have 90 days from settlement to make the contribution.
  8. You have not previously made a downsizer superannuation contribution to your fund from the sale of another home.

A person can contribute a maximum of $300,000. However, the actual sale proceeds of the house can potentially limit this.

Examples of the downsizer superannuation contribution

John and Kate (both aged 65+)

John and Kate sell their main residence for $400,000. They also have $200,000 in the bank. John and Kate are limited to contributing a combined total of $400,000 in any ratio. Which does not exceed the $300,000 per person contribution cap. Such as Kate making a contribution of $300,000 and Rob contributing $100,000.

Peter and Lily (both aged 65+)

Peter and Lily sell their main residence for $700,000. Both Peter and Lily could contribute up to $300,000 each as downsizing contributions. They could contribute the remaining $100,000 as a non-concessional contribution (NCC). This would be subject to meeting the over 65 work test and their previous 30 June total super balance.

Other things to consider
Superannuation

Your total superannuation balance does not impact your ability to make a downsizer superannuation contribution. This will however, increase your total superannuation balance and may affect your eligibility for future contributions.

This measure does not necessarily allow this contribution to be moved to a tax-exempt pension phase. As the amount that can be moved to a tax-exempt pension phase in super is limited by the $1.6 million pension transfer balance cap.

Centrelink

Your main residence is an exempt asset for Centrelink. However, Centrelink will asses the sale proceeds leading to a reduction or loss of social security benefits.

Time to talk about your superannuation?

Our team of financial advisors can help in all areas of superannuation. So let’s talk.

Our 2018 Federal Budget Wrap-Up

It’s that time of year again when the Federal Budget is handed down. These are a few things that we took from the 2018/19 Federal Budget and what they mean for you.

  • Level playing field for small business
  • Instant Asset Write-off extended
  • Income Tax relief
  • Green light on Child Care subsidy
  • Super superannuation changes

 

Level playing field for small businesses

Small businesses that play by the rules may have just had the playing field levelled. For many years small businesses have complained about losing contracts to competitors. Competitors who have lower costs and don’t do the right thing in regard to wages, contractors and tax payments.

From 1 July 2019 the Government are looking to target tax evasion and under-payment of wages in several ways that may help small business.

  • The ATO will be denying a tax deduction to businesses that withhold payments from employees and contractors and do not forward those amounts to the ATO. This includes where the employer fails to report amounts withheld to the ATO. Meaning businesses that fail to withhold tax correctly, report it and pay it to the ATO will find the entire payment no longer tax-deductible.
  • Reporting amounts paid to contractors to the ATO in the form of Taxable Payments Annual Report will be extended. This is currently required for businesses in building and construction. In future, TPAR will also cover security, road freight transport and computer system design industries. This measure is designed to bring contractor payments within these industries in line with payments to employees generally. Making both the contractor and the ATO aware of the exact amount paid from each business to its contractors.
  • Businesses will no longer be allowed to receive cash payments of greater than $10,000 for any goods or services provided. Non-business transactions, and transactions with banks remain unchanged.
  • Reform in corporations and tax laws to deter illegal phoenix activity. Some of these measures will limit circumstances in which directors can resign if a company is left with no directors. Also extending the Director Penalty Regime to include GST, luxury car tax and wine equalisation tax, making directors personally liable for the company’s debts.

Overall, it is hoped these measures will reduce the ability of businesses to underpay staff, avoid reporting of payments for contractors and ensure directors are accountable for their actions.

 

Instant asset write-off extended

There will be continued relief for small businesses as the $20,000 instant asset write-off is extended for another year to 30 June 2019. First introduced on budget night 2015/16, this tax concession was  originally set to end on 30 June 2017. The last Federal Budget announced a 12 month extension and it has been extended yet again for another 12 months.

The benefits to business considered small, under current legislation, relate to tax-deductibility of assets used in the business. Therefore it varies based on each small business’ structure and profitability.

If a business then purchases an asset up to the value of $20,000 it may claim a full tax deduction in the current financial year. Rather than depreciating the asset over several years. The $20,000 limit applies per asset, rather than per business or per year. This means businesses may claim several assets provided each individual asset cost less than $20,000 to purchase, including installation.

The write off provides a great tax benefit to those businesses considering purchasing assets, by bringing forward deductions. However, business with carried forward losses or that made a loss over the current financial year, the benefits may not be so great.

 

Income Tax Relief

Tuesday night’s Federal Budget delivered reductions in personal tax that will be phased in over the next seven years.

From 1 July 2018 to 30 June 2022, the Government will introduce a new non-refundable Low and Middle Income Tax Offset (LMITO). Designed to provide tax relief of up to $530 for taxpayers earning up to $90,000 and will be in addition to the existing Low Income Tax Offset (LITO). The offset phases out from $90,001 to $125,333.

The Government has decided not to increase the Medicare Levy and it will remain at 2%.

Rate 2018/19 – 2021/22 2022/23 – 2023/24 2024/25 – onwards
0% $0-$18,200 $0-$18,200 $0-$18,200
19% $18,201-$37,000 $18,201-$41,000 $18,201-$41,000
32.5% $37,001-$90,000 $41,001-$120,000 $41,001-$200,000
37% $90,001-$180,000 $120,000-$180,000 N/A
45% $180,001+ $180,001+ $200,001+
LITO Up to $445 Up to $645 Up to $645
LMITO Up to $530

Tax rates and thresholds (not including 2% Medicare Levy)

 

Green light on Child Care Subsidy

In last year’s Federal Budget we reported on the planned new Child Care Subsidy (CCS) which will replace the two current child care payments. The Government have confirmed that this will go ahead from 2 July 2018.

So this is an important reminder to make sure you register before this date.

The family income caps:

Family Income Your CCS Percentage %
$0-$66,958 85%
$66,599-$171,958 Percentage reduces by 1% for eery $3,000 of family income
$171,959-$251,248 50%
$251,249-$341,248 Percentage reduces by 1% for every $3,000 of family income
$341,249-$351,248 20%
$351,249+ 0%

Your CCS percentage by family income

 

Mature aged individuals in the workforce

To assist pensioners in working part-time or to be self-employed and not jeopardising their fortnightly pension, the work pension bonus will increase. Going from $250 to $300 a fortnight and allowing those individuals to earn up to $7,800 per year. This is an additional $1,300 per year on top of the current allowance.

The government will provide wage subsidies of up to $10,000 for employers who take on employees aged over 50. With further incentives provided to up-skill mature aged workers.

 

Super superannuation changes

Superannuation funds will have all exit fees banned from 1 July 2019.

There will be a fee cap of 3% on charges by a superannuation fund to protect super balances below $6,000. This threshold will also apply to superannuation accounts deemed inactive, these are funds that have not received a contribution in 13 months. Additionally, inactive accounts will need to be transferred to the ATO.

There will be an opt-in for life and TPD insurance for those under 25 with a balance of less than $6,000.

Currently, those aged 65-74 who want to contribute to superannuation have to meet the work’s test. This means working 40 hours in a consecutive 30 day period. Coming in from the 1 July 2019, there will be a one year exemption on the work’s test. Only if the customer’s balance is below $300,000 and the work test was satisfied in the previous year. For example, if Mary aged 66, stops working in 2018/19 and her balance is below $300,000. Mary would be able to contribute to superannuation in 2019/20 without meeting the work’s test.

Self-managed super funds were not left out of this year’s Federal Budget. Currently the maximum number of members an SMSF can have is four. There is a proposal to increase this to a maximum of 6 members. Additionally, there is also a proposal to increase the time between audits to three years. This is only for funds with good record-keeping, a clear audit history for three consecutive years and that lodge their annual returns on time.

 

That’s the Canny Group wrap from the 2018/19 Federal Budget. Let us know if you have any questions.

The buzz around Cryptocurrency

Cryptocurrency was the buzz word for much of 2017 and it seems 2018 has many of us even more captivated. Nearly everywhere you go or look you can be sure that someone is talking about or making reference to cryptocurrency.

What exactly is Cryptocurrency?

A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions, as well as to control the creation of new units of a particular cryptocurrency. You also might hear about the Blockchain. This is essentially a digitised and decentralised ledger of all cryptocurrency transactions.

The cryptocurrency market has been through the mincer to start off the year. Some of the coins losing 40-50% of their value or more. Bitcoin peaked at around $25,000 AUD late last year and currently sits at just below $10,000 AUD. Whereas at the start of 2017 it was valued at less than $1,000 USD.

Given the huge drop in recent times, is there a need for concern?

If you follow the trends, over the last few years there has been a market downturn mid January, with the overall market finishing substantially higher than where it started.

Thinking of investing?

Like with all investing you need to do your research before diving in. You also need to make sure that you are invested in line with your specified risk profile. You can invest in shares, cash, property and alternative assets; which is where Cryptocurrency would fall. Given the high risk and volatility involved, it would be recommended that the percentage of your total investment portfolio is limited, unless you’re willing to risk everything you have.

It’s also important to find out any tax implications before investing. As like with any money making schemes, the ATO want to ensure that they are receiving their fair share.

The future of Cryptocurrency

At present, Venezuela are looking to utilise a cryptocurrency for their national currency, as their economy is struggling at the moment. This shows that there could be a real future in Cryptocurrency.