Need to know

Outlined below are all the latest news you 'need to know'.

 
Issue What it means  What do you need to be thinking about?
Social Security 
COVID-19 Disaster Payment - phase out

Upon reaching 70% full vaccination in state or territory

Once a state or territory reaches 70% full vaccination, the automatic renewal of the temporary payment will end and individuals will need to reapply each week that a Commonwealth 'hotspots' remains in place to confirm their eligibility.

Upon reaching 80% full vaccination in state or territory

In the first week after a state or territory has reached 80% vaccination, there will be a flat payment of $450 for those who have lost more than 8 hours of work, while those on income support will receive $100.

In the second week, the payment will be brought in line with the JobSeeker payment at $320 for those who have lost more than 8 hours of work, while the payment will end for those on income support. 

It is anticipated that different states and territories will hit the full vaccination milestones at different times. 

As the COVID-19 Disaster Payment phase out is dependant on achieving vaccination milestones there is no set date as to when the phase out will begin.

The Government will leave the Pandemic Leave Disaster Payment in place until 30 June 2022. It is for a taxable payment for support if you can't earn an income because you must self-isolate, quarantine or are caring for someone with COVID-19.

New Centrelink rates and thresholds released. The maximum Age Pension has increased.

Social security clients may see an increase in their social security benefit payments.

As a result of the indexation to Centrelink payments, the cut-off means testing thresholds for both pensions and allowances have also increased. This means more clients may now be eligible for a benefit.

  Previous amount  From 20 September
 Single $952.70 $967.50
 Couple (each) $718.10 $729.30

*Includes Energy and Pension Supplements

Here are the indexed Centrelink benefit payments rates and thresholds for pensions and allowances.

New aged care rates, thresholds and subsidies have been released.

Many aged care fees, charges, subsidies and supplements were indexed on 20 September 2021.

Here is the updated schedule of fees and charges for residential and home care.

Here are the updated aged care subsidies and supplements.

Client fees relating to residential aged care and home care may have changed from 20 September 2021.

The maximum permissible interest rate used in calculating interest on any outstanding payment will decrease from 4.04% to 4.01% for residents entering care between 1 October to 31 December 2021.

Current and historical maximum permissible interest rates can be found here.

The Department of Human Services (DHS) has reviewed and updated residential aged care and home care fees, effective 20 September 2021.

The quarterly review is a reconciliation process which:

  • aligns the fees a care recipient pays with the fees associated with their care needs and changes to their financial circumstances
  • incorporates any indexation into the fees that care recipients are asked to pay (usually in March and September each year).
  • includes any changes made during the quarter that relate to a historical event (for example, the sale of an asset in a previous quarter that the DHS was not notified of until a later date).

If the review finds that the resident has:

  • overpaid fees in the previous quarter then the Department of Human Services will refund the over payment
  • underpaid fees in the previous quarter the resident will not be liable for the underpayment but they will have their fees adjusted from the start of the next quarter.

The effective dates of the four quarterly reviews are 1 January, 20 March, 1 July and 20 September. This means the next review will be on 1 January 2022.

 Australian Taxation Office
Re-contribution of COVID-19 early release super amounts From 1 July 2021, super fund members can re-contribute amounts they withdrew from super under Compassionate grounds - COVID-19 early release of super without counting towards their NCC cap. To have a COVID-19 early release of super re-contributed amount excluded from the NCC cap it will be necessary to complete and return the 'Notice of re-contribution of COVID-19 early release amounts' to the fund before or at the time of the contribution.
Compensation payment from financial institutions and super contribution caps The ATO have released a fact sheet 'Super contribution caps' which explains the impact on clients' concessional and/or non-concessional super contribution caps where an amount of compensation is received by their super fund. It also explains how you may apply to the ATO to request the Commissioner to exercise a discretion in these circumstances where you have or will exceed your concessional or non-concessional contribution caps.
 Enacted legislation
Treasury Laws Amendment (2021 Measures No. 6) Bill 2021 The new legislation allows SMSFs / SAFs who would otherwise be subject to the disregarded small fund asset rule to apply the segregated asset method without the need of an actuarial certificate where 100% of the assets are supporting a retirement phase income stream for all the income year. The change applies for the 2021-2022 financial year and onwards. This means for the 2020-2021 financial year and earlier, an actuarial certificate is required where the fund has disregarded fund assets even if it is entirely in retirement pension phase. 

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

Disclaimer
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.