Presented by Firstname Surname Jobtitle/Position A presentation to Client Name Date 2015 Budget summary

Presented byFirstname SurnameJobtitle/Position

A presentation toClient NameDate

2015 Budget summary

This presentation has been issued by <include appropriate adviser and licensee details >

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial <and tax and/or legal> advice prior to acting on this information.

<Include where there is technical, research, legislative information>Information in this presentation is accurate as at 12 May 2015. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.

<Include where opinions have been expressed>Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any member of the NAB Group, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

<Include where case studies>Case studies in this presentation are for illustration purposes only. The investment returns shown in any case studies in this presentation are hypothetical examples only. They do not reflect the historical or future returns of any specific financial products. Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.

<Include if you are NOT a registered tax (financial) adviser>

We are not a registered tax agent or a registered tax (financial) adviser. If you intend to rely on any general tax information contained in this presentation to satisfy liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, you should seek professional advice from a registered tax agent or registered tax (financial) adviser.

<Include if you ARE a registered tax financial adviser>

Any tax information provided in this presentation is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or a complete assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

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IMPORTANT INFORMATION AND DISCLAIMER

FEDERAL BUDGET – 12TH MAY 2015 3

• Government benefits- social security benefits

• Superannuation – no significant changes

• Personal taxation and Small Business tax

IMPORTANT: Legislation must pass through parliament before any of these measures become law

2015 FEDERAL BUDGET ANALYSISOVERVIEW


• Medicare Levy - Low-income threshold for singles, families and single seniors and pensioners will be increased for the 2014-2015 income year.

• ‘Netflix tax’ - GST on cross-boarder supplied digital products

• People on a ‘working holiday’ in Australia will be taxed as ‘non-residents’- no tax free threshold

• Range of issues raised by the Government in a recent discussion paper- not addressed: -negative gearing

-tax on bank deposits

2015 FEDERAL BUDGET ANALYSISYOUR TAX


• Tax concessions for small business – entities with turnover up to $2m pa

• Company tax rate for small businesses reduced to 28.5% from 1 July 2015(dividends will still be franked at 30%)

• Individuals with business income from unincorporated small businesses - small business tax discount

-5% discount, on income tax payable on business income-Discount capped at $1,000 per individual, per income year

• Small businesses- deduction for cost of assets up to $20,000 in the year acquired. Purchases from 7.30pm 12 May 2015- 30 June 2017.

2015 FEDERAL BUDGET ANALYSISYOUR BUSINESS


FARMERSFrom 1 July 2016

• Primary producers will be able to fully deduct capital expenditure on fencing and water facilities

• Can be fully deducted in year expenditure occurs

• Capital expenses in relation to fodder- depreciated over 3 years

2015 FEDERAL BUDGET ANALYSISYOUR BUSINESS

FEDERAL BUDGET – 12TH MAY 2015

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2015 FEDERAL BUDGET ANALYSISYOUR RETIREMENT

• As previously announced, there are no significant changes to superannuation

• Access to super due to terminal illness:

-currently, life expectancy needs to be less than 12 months-proposed, less than 24 months-unrestricted, tax-free access

SUPERANNUATION


2015 FEDERAL BUDGET ANALYSISYOUR RETIREMENT

• Employer Superannuation Guarantee to remain at 9.5%

• Contributions limits

SUPERANNUATION

Contribution type

Explanation Cap applying in 2015/16

Concessional Comprises all employer contributions (including superannuation guarantee and salary sacrifice contributions), personal contributions claimed as a tax deduction and certain other amounts

Aged 49 + on 30/06/2015

$35,000

Aged < 49 on 30/06/2015

$30,000

Non-concessional

Comprises personal after-tax contributions, spouse contributions and certain other amounts

$180,000 or $540,000 provided you are aged 64 or under on 1/07/2015, don’t exceed this amount over a three-year period and meet certain other conditions


AGE PENSION

From 1 January 2017

• Proposed increase to lower asset threshold- increased payments for lower net worth people

• Changes to taper rate

-Pension will reduce for higher net worth people

-Entitlement to pension will cease at lower asset levels

• Those who lose Age Pension (estimated to be 12% of pensioners) as a result of changes will be automatically entitled to the Commonwealth Senior Health Card

• Changes to deeming thresholds previously announced will not proceed

2015 FEDERAL BUDGET ANALYSISYOUR GOVERNMENT BENEFITS-RETIREES



• Below compares amount of Age Pension received by a homeowner couple under the new proposed measures, with current entitlements

• Indicates percentage of assets which would need to be drawn down to replace pension reduction

• Asset ranges effected

Assessable assets

Age Pension received at current $1.50 taper rate

Age Pension under rebalanced asset test

Reduction/increase in pension

% of assets required to replace Age Pension

Assessable asset range

$200,000 $34,923 $34,923 $0 N/A $100,000-$199,999

$400,000 $30,965 $32,973 ($2,009) N/A $300,000-$399,999

$600,000 $23,165 $17,373 $5,792 0.97% $500,000-$599,999

$800,000 $15,365 $1,773 $13,592 1.70% $700,000-$799,999

$1,000,000 $7,565 $0 $7,565 0.76% $900,000-$999,999


ASSESSMENT OF DEFINED BENEFIT PENSIONS

From 1 January 2016

• Larger proportion of defined benefit pension income will be taken into account when determining entitlements

• Maximum amount which can be excluded from income testing capped at 10%

• Current arrangements allow large proportion of pension income to be excluded

• DVA Pensions, and Defined Benefit pensions paid from military super funds- exempt



PORTABILITY OF SOME PAYMENTSFrom 1 January 2017

• Proposed that some payments to be proportionately reduced after 6 weeks overseas, if less than 35 years Australian Working Life Residency

• Currently 26 weeks

• Applies to Age Pension, Wife Pension, Widow B, and Disability Support

2015 FEDERAL BUDGET ANALYSISYOUR GOVERNMENT BENEFITS


FTB-A

• Proposed from 1 January 2016, families will only be eligible for 6 weeks in a 12 month period while overseas

• Currently eligible whilst overseas for 6 weeks, this reduces to base rate for 50 weeks

• Large Family Supplement to cease from 1 July 2016

PAID PARENTAL LEAVE

• Government to remove ability to access full amount of both Government Paid Parental Leave as well as employer benefits from 1 July 2016

• ‘Top-up’ still available if employer benefits are less than minimum wage for 18 weeks

2015 FEDERAL BUDGET ANALYSISYOUR GOVERNMENT BENEFITS-FAMILIES


CHILD CARE SUBSIDYFrom 1 July 2017

• Replaces some other benefits, such as the Child Care Rebate

• Single means test - ‘activity test’

• Level of support-based on family income1:- Up to $65,000: 85% per child- $65,000-$170,000: tapers to 50% per child- $170,000 to $185,000 50% per child- $185,000+: capped at $10,000 per child

2015 FEDERAL BUDGET ANALYSISYOUR GOVERNMENT BENEFITS-FAMILIES

1Thresholds reflect ‘future dollars’


AGED CARE

• Rent from former family home - assessable income for aged care fees

• Irrespective of whether accommodation payment paid as lump sum or daily payments

• New residents from 1 January 2016

• May increase the cost of care

• Will not impact social security income test

2015 FEDERAL BUDGET ANALYSISYOUR GOVERNMENT BENEFITS

Contact details line 1Contact details line 2

THANK YOU

Federal Budget – 12th May 2015

Documents

Presented by Firstname Surname Jobtitle/Position A presentation to Client Name Date 2015 Budget summary