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The government has recently introduced a raft of superannuation and related changes that will affect retirees, first home buyers, and low earning employees. Each of the changes are explained in detail below.
Micro businesses in NSW that met aggregated annual turnover and other eligibility conditions were eligible for the 2021 COVID-19 micro-business grant if they were impacted by COVID-19 restrictions. Whilst application for the grant has closed, and current recipients are due to have their last payment on 30 November 2021, Service NSW temporarily paused payments on 1 November to some recipients to allow additional analysis and assessments to be carried out in response to “increased fraud activity”.
According to some recent statistics released by ASIC, six of Australia’s largest banking and financial services institutions have paid or offered a total of $1.86bn in compensation, as at 30 June 2021. This is in relation to customers who have suffered a loss or experienced a detriment due to fees for no service misconduct or non-compliant advice. At least some of this compensation would have been paid to super funds including SMSFs.
A new data matching program is underway in relation to government payments for the 2018-19 to 2022-23 income years. While it may sound boring, if you dig underneath its innocuous exterior, you’ll find that this program covers a wide range of areas. In essence, it covers most services that the Commonwealth government pay third party providers to deliver in relation to the programs they administer.
Due to the ongoing economic impacts of COVID-19 on large parts of Australia, in particular those States and Territories which have had to endure lengthy lockdowns throughout the year, the ATO has announced the extension of various COVID-19 relief for SMSF trustees to the 2021-22 financial year. The relief previously only applied to the 2019-20 and 2020-21 financial years.
The government has announced the phasing out of the COVID-19 disaster payment to individuals as the country gradually reaches various vaccine targets and learns to live with the virus. The payment was begrudgingly provided by the Federal government during the current wave of lockdowns after criticisms and calls to bring back to JobKeeper which kept the relationship between employers and employee intact.
Employers beware, from 1 November 2021, if you’re hiring new employees, there may be an extra step involved in determining which super fund employee contributions need to be paid into. Currently, when a new employee starts a new job, they are eligible to choose the super fund that their super guarantee contributions go to. If they do not choose their own fund, the super contributions will be paid into the employer’s default fund.
The JobSaver payment was introduced as a means to provide cash flow support for NSW businesses impacted by the 2021 COVID-19 lockdown. Employing businesses that have an aggregated turnover of between $75,000 and $250m and have experienced a decline of 30% or more over a minimum 2-week period may be able to receive a payment equivalent to 40% of their weekly payroll for work performed in NSW. This is on the proviso that the employee headcount is maintained.
Div 293 tax is imposed on individuals that exceed the high income threshold of $250,000. The consequence of this tax is that an addition 15% tax is imposed on their concessional contributions. In effect, this tax means the effective contributions tax on concessional contributions doubles from 15% to 30% for those high income earners.
In a bid to keep help businesses through the latest never-ending lockdown, the NSW government has expanded the JobSaver program to include more businesses as well as increase the amount of payment. The payment is available to businesses with an annual turnover of between $75,000 and $250m (up from the original upper threshold of $50m), that have experienced a revenue decline of 30% or more. Businesses that apply for the payment can expect to receive the funds in their bank accounts within 5 to 10 business days from the approval date.
With the extension of the NSW lockdown by another 4 weeks, both the Federal and NSW government has flagged extra financial support for individuals. Eligible workers will be in line to receive $750 a week if they lose 20 hours or more of work (up from $600 previously). Those that lose between 8 and less than 20 hours will receive a payment of $450 per week (up from $375).
With more and more States going into lockdown to slow the spread of the Delta strain, many businesses and individuals will be feeling the financial pressure from losing sales and work hours. Both the Federal and State governments of NSW and Victoria have stepped in with support packages to help their residents weather the latest storm.