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Keeping you in touch May 2014. John Walker. John Walker is an Authorised Representative of RI Advice Group Pty Ltd. “For better digestion I drink beer, in the case of appetite loss I drink white wine, in the case of low blood pressure I drink red wine, - PowerPoint PPT Presentation
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Keeping you in touch May 2014John Walker
John Walker is an Authorised Representative of RI Advice Group Pty Ltd
“For better digestion I drink beer, in the case of appetite loss I drink white wine, in the case of low blood pressure I drink red wine, in the case of high blood pressure I drink scotch, and when I have a cold I drink schnapps.”
“When do you drink water?”
“I’ve never been that sick!”
Young Aussies Families with kidsHigher income
earnersPre-retirees Retirees Employers
Jobseeker reforms Paid parental leave Incentives to save for super still intact, if you can afford it:
- Contribution caps still indexed- Penalties for contribution breaches
reformed
Retirement savings focus
Health care contribution
Deregulation of tertiary education
Changes to High Education Loan Program payback: sooner, and at a higher rate $50,638 (max 6%)
Financial support for TAFE students
Changes to social security benefits
Loss of the tax offset for dependent spouses
2% temporary tax on income >$180k for 3 years
‘Restart’ program for older workers
Pensions indexed to lower rate of inflation, not wages
Super income stream will now count towards your Seniors Health Care Card eligibility for new applicants
1.5% tax cut for most businesses
Delayed SG payment dates and rates 9.5% 1 July 2014 3 years
Jobseeker reformsJobseekers younger than 30 will wait 6 months before receiving Newstart or Youth Allowance
Deregulation of tertiary educationTertiary fees might increase (or decrease?)
Changes to HELP repaymentsPayback now starts at $50,638k income, and the interest is likely to increase, but capped at 6% Financial support for TAFE studentsStudents of Diplomas, Advanced Diplomas and Associate Degree courses will now be eligible for direct financial support
First home saver accounts abolished
Young Australians
Removal of dependent spouse tax offsetBenefit loss of approximately $2,400 from July 2014.
Some relief for singlesLow income single parents will get an extra $750 per year for children aged between six and 12 years.
Don’t forget…Kids under 16 are exempt from the $7 health payment after their first 10 visits.
Increase of Superannuation GuaranteeFrom 1 July 2014, the SG rate will increase to 9.5% where it will stay until 30 June 2018. The rate will then increase by 0.5% each year until it reaches 12% in 2022/23.
Families with kids
Temporary budget repair levyAny income you earn over $180,000, may be subject to 2% extra tax for the next 3 years.
Taxable income Levy payable (pa)
$180,000 $0
$200,000 $400
$220,000 $800
$240,000 $1,200
$260,000 $1,600
$280,000 $2,000
$300,000 $2,400
Higher income earners
No changes to super contribution caps No Budget change to contributions caps… and they’re still indexed.Relief if you breach the non-concessional contributions cap.
“Restart” program for older workers•$10,000 over two years to employers who hire a previously unemployed 50+ worker.•Pro rata available for part time employment.
But on the other handMature Aged Workers Tax Offset is abolished from 1 July 2014 for ALL taxpayers.
Increase of Age Pension AgeThe Age Pension qualifying age will continue to rise by six months every two years from the qualifying age of 67 (from 1 July 2033) gradually reaching a qualifying age of 70 years by 1 July 2035.
Still to comeNews about super preservation age.
Pre-retirees
Pensions indexed to a lower ratePension payments are now indexed to inflation, not wage growth.
Deeming thresholds reducedReduced pension entitlements likely under the income test from 1 July 2017.
Commonwealth seniors health card (CSHC) eligibility tightenedYour tax-free super income stream will now count towards your CSHC eligibility.
Seniors supplement for CSHC holders, goneAnnual payments of $876.20 (singles) and $1,320.80 for couples scrapped from 20th September 2014.
Means test exemption for downsizing family homeThe ‘Housing Help for Seniors’ pilot announced in the 2013/14 Budget will no longer take place
Retirees
Company tax cuts800,000 businesses will get a 1.5% cut to the Company Tax Rate.
Top 3,000 still on the hookThe top 3,000 will still pay a levy to help fund the paid parental leave scheme.
Super Guarantee increases delayedRemaining at 9.5% until 2018.
And of course…Repeal of the minerals resource rent tax and the carbon tax.
Employers
Social security thresholds frozen against indexationSocial security thresholds will not increase for 3 years.
Austerity measuresWe’ll all have to make choices about how we spend our household budget (health, fuel, university fees).
For everyone
Some pressing questions
• How will you bridge the gap between your preferred retirement age and Aged Pension age?
• How will you make up for the compound effect of the delay in increase in Super Guarantee
payments?
• Will there be indirect impacts on you because of changes impacting a family member?
• Would you be willing to make lifestyle changes because of cuts to social security benefits?
• What are the ‘non-negotiables’ in your family budget?
• Are your current financial strategies still relevant and effective?
For everyone
Residential Aged Care Services Update
Activity with UnitingCare to date
Presentations:
1 annual conference (Pitt Street)A regional conference (Belrose)Co-presented to U3A, with Tony LoweRetirement Village (Turramurra)
External Activity
Presentations to CLA and Gadens Aged Care Seminars in 2009 and 2011 and RI Conference 2014
Government proposals – ongoing feesBuy a home Enter an Aged Care Residence
Pay 100 per cent or deposit
Or borrow from the bank
Pay 100 per cent (RAD) less
Borrow from the Facility DAP or not
Water rates Land rates Phone bills Shopping bills Insurance
Bank Residential Fee
Means Tested Fee
Extra Services Fee
Accommodation
Aged Care – The Main Areas
More home care
Increased care contributions
– means tested Entry cost refundable
Fee transparency
Fee Caps One level of residential care
16
Aged Care
Comparison of Changes to Fee Structures
Before 1 July 2014 From 1 July 2014
Basic daily care fee Standard resident contribution
Daily income tested fee Means tested fee (combined income and asset test)
Accommodation charge n/a
Accommodation bond Refundable accommodation deposit or refundable accommodation contribution
Accommodation bond via periodical payment
Daily accommodation payment or daily accommodation contribution
Retention amount n/a
Extra services fee Extra services fee
• In addition, a resident may be required to pay any other amount agreed between them and the care provider
Costs going up and income coming down
From 1 July 2014 no pension supplement for Aged Care residents entering a facility after 1 July. INCOME DOWN
From 1 July 2014 Home Care supplement – Income Tested. COSTS UP
From 1 January 2015, new Account Based Pensions will be deemed. There will be no Centrelink free amounts
Income Test change could reduce Age Pensions Change could increase Income Test component of Means Tested Fee
INCOME DOWN COSTS UP
From 1 July 2019 NMETO abolished. COSTS UP if client pays tax COSTS UP
Couples / Singles
Solicitor
Accountant
Aged Care Fees
Age Pension / DVA
New language (DAP, RAP etc.)
Investment Types
ACAT
Means Testing
Trusts
YOU and ME
19
How can I help?
• Discuss your options
• Manage your financial affairs including your estate planning considerations
• Fee reduction strategies
• Keep or sell the family home
20
Disclaimer
Important Notice
RI Advice Group Pty Ltd, ABN 23 001 774 125, holds Australian Financial Services License Number 238429 and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts.
The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.
Thank you