Need to know
Stuart Sheary, Senior Technical Manager
Outlined below is all the latest news you 'need to know'.
|Issue||What does it mean?||What do you need to be thinking about?|
Disaster Recovery Payment
People who have been seriously injured, or their house has been damaged/destroyed may be eligible for a payment of:
Eligible people have until 21 July 2020 to make a claim. For more information please visit NSW Bushfires – September 2019 – Australian Government Disaster Recover Payment
Disaster Recovery Allowance
People who have lost income as a direct result of the bushfires in New South Wales may be eligible for an allowance of up to the rate of NewsStart for a maximum period of 13 weeks.
Eligible people have until 1 July 2020 to make a claim. For more information please visit NSW Bushfires – September 2019 – Disaster Recovery Allowance
The Department of Human Services has published a page dedicated to people affected by the bushfires which outlines various allowances and types of support available.
Further state-based assistance can also be found on each State Government’s website.
Assistance available to residents of Queensland
On 20 January 2020, a media release from the Prime Minister outlined several measures designed to assist small business affected by the fires.
Assistance available to residents of New South Wales
Assistance available to residents of Victoria
The Australian Taxation Office (ATO) has published a page dedicated to people affected by the bushfires. It outlines various lodgement deadline extensions.
Retirement Income Review – consultation paper
The Government has commissioned an independent review of the retirement income system. The review was recommended by the Productivity Commission in their report - Superannuation: Assessing Efficiency and Competitiveness.
The review will consider the three pillars of the existing retirement income system, including social security, compulsory superannuation and voluntary savings. A consultation paper has been released and the final report will be provided to the Government by June 2020.
You can submit responses to this consultation up until 3 February 2020.
There is no immediate change to financial planning strategies at this stage. However, we will watch the outcomes of the review and the Government’s response. We will keep you informed of any developments via the Monthly Technical Bulletin.
|Bills to be debated in Parliament|
The Bill seeks to implement a range of technical fixes. Some notable changes include:
The Bill will limit concessional tax treatment to certain testamentary trust income distributed to minors. Under the change, concessional tax treatment will be limited to income on assets transferred into a testamentary trust from a deceased estate or proceeds of the disposal or investment of those assets.
Death benefit rollovers and untaxed element
The Bill ensures any untaxed element created on the rollover of a death benefit, that was partly funded with insurance premiums for which a deduction was claimed, is excluded from being taxed by the receiving fund.
Downsizer contributions to super
The Bill makes three changes to ensure the provisions relating to downsizer contributions operate as intended. Specifically, amendments will:
Capped defined benefit income streams
The Bill seeks to address the anomaly that arises when a market-linked pension is commuted and a new market-linked pension is commenced. Under current legislation the debit value that arises on commutation is nil. The commencement of a new market-linked pension is recorded as a credit on the transfer balance account. This may result in excess transfer balance cap issues as a result of ‘double counting’.
This should not impact most testamentary trusts. The measure aims to stop schemes where additional capital unrelated to the deceased is injected into the testamentary trust. This change is expected to impact assets acquired by, or transferred to a testamentary trust on, or after, 1 July 2019.
The amendments are retrospective and commence on 1 July 2017 meaning clients who rolled over an affected death benefit should not be disadvantaged. Please note, this does not stop the untaxed element being created in the first instance.
The first two mentioned changes are effective from 1 July 2018, meaning affected clients who may not have known they were ineligible and made a downsizer contribution will not be penalised. Individuals impacted by this change will need to discuss their circumstance with the ATO upon passage.
If legislated, the third change applies on the disposal of an ownership interest in a dwelling if the exchange contract is entered into on, or after, the day the amendments receive Royal Assent.
The amendments will be applied retrospectively on 1 July 2017. Until legislated the ATO have confirmed they would not take compliance action at this stage if a fund doesn’t report the commutation of the original pension or the start of the new market-linked pension or they have reported the transfer balance debit for the commutation as other than nil. Individuals impacted by this change will need to discuss their circumstances with the ATO and their super fund upon passage.
|Bills in the Senate|
The Bill seeks to introduce a one-off amnesty to employers who come forward and rectify historical non-compliance with their superannuation guarantee (SG) obligations.
The amnesty period will start retrospectively from 24 May 2018 and will end six months after the day the Bill receives Royal Assent
The ATO has published material relating to their compliance approach to assist employers with rectifying their SG obligations. Until the proposed amnesty law is enacted by Parliament, the ATO will continue to apply the existing law to the SG contribution statements lodged.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.