In a bid to protect the super savings of Australians by weeding out underperforming super funds, the government is currently attempting to legislate requirements which will involve APRA conducting annual performance reviews for certain superannuation products. It is just one of the measures aimed at improving Australia’s superannuation system which manages around $3 trillion in retirement savings.
It is estimated that around 70% of Australians with life insurance hold it through their super fund. Having insurance through your super fund is tax effective and has various advantages such as having cheaper premiums and usually having fewer health checks. Most funds offer three different types of insurance through super, life insurance, total permanent disability (TPD) and income protection insurance, each of which cover different aspects.
From 1 July 2021, the general pension transfer balance cap will increase from $1.6m to $1.7m due to indexation. If you’re thinking of retiring and have a large amount in your transfer balance account, it may be wise to plan ahead so you can take advantage of this increase. By way of background, the transfer balance cap started in 1 July 2017 and is effectively a lifetime limit on the total amount of super that can be transferred into retirement phase income streams, this includes most pensions and annuities.
While most businesses are already familiar with the Single Touch Payroll (STP) regime, small employers (19 or fewer employees) with closely held payees were exempt from reporting payroll information of those closely held payees through the STP for the 2019-20 and 2020-21 financial years. However, from 1 July 2021, those small employers must start reporting payments made to closely held payees through STP.
The data-matching programs just keep coming from the ATO this year, this time it will be focusing on data pertaining to the temporary early access to super due to COVID-19 and the JobMaker Hiring Credit. In relation to the early access of super, the ATO will be acquiring confirmation of government payments from Services Australia (Centrelink) made to those who applied to access their super early for the period of 19 April 2020 to 31 December 2020.
With the other government COVID-19 economic supports such as the JobKeeper and JobSeeker winding down in the next few months, businesses that are seeking to employ additional workers but need a bit of help can apply for the JobMaker Hiring Credit Scheme. Unlike the JobKeeper where the payment has to be passed onto employees, the JobMaker Hiring Credit is a payment that the business gets to keep. Depending on the age of the employee, eligible businesses may be able to receive payments of up to $200 a week.
Tax planning or tax avoidance? Do you know the difference? While tax planning is a legitimate and legal way to arrange your financial affairs to keep your tax to a minimum provided you make the arrangements within the intent of the law. Any tax minimisation schemes that are outside the spirit of the law is referred to as tax avoidance and attracts the ATO’s attention.
While the government continues to help businesses through the current pandemic-related recovery with various revenue measures, it is inevitable that some businesses may not make the journey back. To assist those businesses with dealing with insolvency issues, the government has made significant changes to the framework to introduce a new, simplified debt restructuring process.
More super changes are on the way with the release of draft legislation to implement super reforms announced in the 2020-21 Budget including single default account, best financial interests duty, and tackling fund under-performance. The reforms are designed to ensure that the super system deliver better outcomes for members.
If you’re an individual and you think you’ve been underpaid or not paid super for the work you’ve done, one of the ways to try to claim unpaid super is to lodge an enquiry with the ATO. While there are other ways to pursue your claim such as going to the Fair Work Ombudsman or through the Courts, going through the ATO may be the easiest way, provided you have the proper documentation.
In an effort to increase economic security for women in the event of divorce, the government had previously proposed to introduce a measure to improve the visibility of superannuation assets in family law proceedings. Currently, getting full visibility of superannuation assets in family law matters when one party does not cooperate can become complex, time-consuming and costly. It usually requires parties to go on “fishing expeditions” using subpoenas and other formal court processes with no guarantee of success.
The NSW government has released its 2020-21 Budget amid the COVID-19 pandemic. According to the Treasurer, Dominic Perrottet, a deficit of $16bn is forecast for the 2020-21 financial year, due to an increase in spending in relation to various temporary stimulus to help the economy recover and lower revenues. With these measures in place, the NSW government expects shrinking deficits over the next 4 years, with a return to surplus forecast in 2024-25.