Why Did My Credit Score Go Down?
A drop in your credit score can be puzzling and stressful, but understanding the reasons behind it can help you take control and improve your financial health.
Here are some common factors that might cause your credit score to decrease, along with strategies to address them.
1. Late Payments
Payment history is a significant component of your credit score. Missing payments on home loans, credit cards, utility bills, or other financial obligations can negatively impact your score. Even delayed Buy Now Pay Later (BNPL) payments can contribute to a decline.
Strategy: Set up automatic payments and alerts to remind you of due dates, ensuring you never miss a payment. This proactive approach helps you avoid late fees and potential damage to your credit score.
2. Growing Debt
Accumulating debt or having accounts sent to collections can severely damage your credit score. A payment default, defined as an amount of $150 or more overdue by 60 days or more, can be reported to credit bureaus and harm your credit rating.
Strategy: Contact your credit providers to discuss hardship options if you’re struggling. Taking proactive steps to pay off debt and demonstrating responsible financial management can gradually improve your score. Establishing a budget and prioritising debt repayment can also be beneficial.
3. Too Many Credit Applications
Applying for multiple credit accounts in a short period can raise concerns about financial stress, as it may suggest you are struggling with credit. The type of credit and provider you choose can also impact your score.
Strategy: Research and select reputable providers before applying for credit. Space out your applications to minimise the impact of hard inquiries on your credit score. Each application can slightly lower your score, so be strategic about when and where you apply.
4. Lack of Stability
Frequent changes in your residential or employment status may indicate higher credit risk and impact your credit score. Stability is often seen as a sign of financial responsibility.
Strategy: Maintain stability in your employment and residence to positively impact your credit score over time. Keeping a consistent job and address can signal to lenders that you are a lower-risk borrower.
5. Business-Related Issues
If you are a business director or proprietor, your financial decisions and responsibilities can influence your personal creditworthiness. For example, a history of closing and opening new businesses to avoid debt payments can affect your credit report.
Strategy: Be mindful that your financial behaviour both as a consumer and a business proprietor can impact your credit score. Maintaining a good credit record and managing business finances responsibly are crucial for both personal and business credit health.
6. Inaccuracies
Errors in your credit report, caused by mistakes from credit providers, can affect your score. Common errors might include incorrect information about your payment history or account status.
Strategy: Review your credit report regularly and contact your credit provider to correct any mistakes. You can also use Equifax’s Corrections Portal to request an investigation and amend inaccuracies. Regular checks can help you catch and resolve errors early, preventing potential damage to your credit score.
7. Identity Theft
If you fall victim to identity theft, fraudsters may open new credit accounts in your name. Accumulated debt and missed payments on these accounts can significantly damage your credit score.
Strategy: If you suspect identity theft, consider placing a ban on your credit report while you work to resolve the issue. Staying vigilant and addressing any signs of fraud early can help minimise damage. Additionally, monitoring your credit report regularly can help detect suspicious activity before it significantly impacts your score.
Stay Informed and Take Action
Regularly monitoring your credit score and report is crucial to understanding and addressing changes. Services like GetCreditScore allow you to check your credit report overview, including your score, for free online. By keeping an eye on your credit profile, you can identify and resolve issues that might be affecting your score.
Understanding these factors and taking proactive steps can help you maintain a healthy credit score and improve your financial well-being. Staying informed about your credit profile and addressing issues as they arise is essential for long-term financial health.
Conclusion
Understanding the reasons behind a drop in your credit score is crucial for maintaining your financial health. Factors such as late payments, growing debt, excessive credit applications, and inaccuracies can all influence your credit rating. Additionally, issues related to identity theft and business-related financial behaviour can also impact your score. Regular monitoring of your credit report and addressing any issues promptly are key steps in managing and improving your credit score effectively.
At The Hrkac Group, we are dedicated to supporting you in navigating your financial concerns and achieving your goals. Whether you need assistance with credit management or other financial matters, our experienced team of Geelong Mortgage Brokers is ready to help. By partnering with us, you can gain valuable insights and practical strategies to improve your financial health. Contact us today via our online booking form or call our Geelong office on (03) 5221 2355 to schedule a consultation and take the next step towards a healthier financial future.
A testamentary trust, established through a will, serves as a tool to manage and protect assets for beneficiaries after the will-maker’s death. We’ve put together a detailed guide on the pros and cons of these trusts, to help you understand if they are suitable for your estate planning needs.
An introduction to Testamentary Trusts
A testamentary trust is a type of trust created that comes into effect only after the death of the person who has made the testamentary trust will. In a standard will, assets are passed directly to beneficiaries. However, in a testamentary trust will, the assets are placed into one or more trusts as desired by the estate planning needs of the will-maker.
The pros of Testamentary Trusts
1. Flexibility over asset distribution
Testamentary trusts provide considerable control and flexibility over how assets are distributed. They allow the trustee to decide when and to whom the assets will be distributed. This flexibility ensures that beneficiaries receive their inheritance over time or when it is most appropriate, such as when they reach a certain age or when specific conditions are met.
A trustee named in the will manages these estate assets and distributes them, or the income they generate, to the beneficiaries as outlined in the trust terms. For clients seeking to safeguard their assets, ensure tax efficiency, and protect their families financial future, understanding manage a testamentary trust is crucial. Therefore, it is recommended that trustees and beneficiaries also financial and legal advice when receiving their inheritance under a trust arrangement.
2. Asset protection
Assets held in these trusts are shielded from claims against beneficiaries by creditors, lawsuits, or ex-spouses in case of divorce, as they are not directly owned by beneficiaries. This is particularly useful for beneficiaries who have personal financial difficulties. The trust structure ensures that the assets are protected from external risks.
3. Tax efficiency
Tax benefits arise because income can be allocated to beneficiaries in a way that reduces the effect of higher tax rates for minors and progressive tax rates for adults. This can lead to substantial tax savings, making the trust an attractive option for families. Beneficiaries include a broad range of family members known as secondary beneficiaries including and not limited to; cousins, grandchildren, nieces & nephews, siblings, parents, or any other family lineage.
4. Preservation of government benefits
For beneficiaries who receive government benefits, such as pensions, testamentary trusts can be structured to protect their eligibility. By keeping the assets within the trust rather than directly transferring them to the beneficiary, the assets may not be counted towards means-testing for benefits. This ensures that the beneficiary can continue receiving government support while still benefiting from the trust, for example, via a Special Disability Trust.
The cons of Testamentary Trusts
1. Complexity and costs
Administering a testamentary trust can be more complex and costly than a standard will. The ongoing management requires maintaining accounts, filing tax returns, and complying with legal obligations to act in the beneficiaries best interest as required by the Trustee Act 1958.
2. Succession of the role of trustee
The succession of the role of trustee must be specifically spelt out in the Will, if the individual wishes to determine who will control the trust upon their death.
3. Capital gains tax issues
While testamentary trusts offer tax advantages, there are also potential downsides, particularly concerning capital gains tax. If assets within the trust are sold at a loss, these losses cannot be distributed to beneficiaries. Instead, they must be carried forward within the trust and offset against future gains.
Conclusion
Testamentary trusts offer a powerful tool for estate planning, providing control, protection, and tax benefits for beneficiaries. In contrast to a testamentary trust, a traditional will gives beneficiaries no choice but to take their inheritance in their own name – in some circumstances resulting in tax consequences and liability/protection problems. However, they also come with complexities and costs that must be carefully considered. Some people like to avoid complexity. Some people want to avoid what they perceive as unnecessary costs. For some people (depending on their assets and family circumstances), a testamentary trust provides no real benefit over a traditional, simple will.
Consulting with professionals who specialise in estate planning can help navigate these complexities and determine whether a testamentary trust is the right choice for your specific circumstances.
We can help protect your final wishes. The Hrkac Group can help you with making a will in Geelong, so if you are ready to take that next step to take control of your future, contact our Geelong-based Legal team at The Hrkac Group. Make an appointment today via our online form or phone our Geelong office on 5224 2366.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
Liability limited by a scheme approved under Professional Standards Legislation.
Choosing the best Mortgage Broker Geelong
Buying a home and taking out a home loan of any size is a big commitment. Whether it be your first house or your third, the process can be both daunting and overwhelming. Having an expert mortgage broker on your side to help guide you through the process can make a world of difference to your home buying and lending experience.
With endless options at your fingertips when it comes to Mortgage Brokers, it’s essential to find one who can work with you, and your family’s needs effectively and help you secure a suitable home loan.
To choose the best mortgage broker in Geelong for you, a little bit of research will go a long way to help with your decision. To help streamline the process for you, there are several things that you should take into consideration to help with your decision.
What exactly can a Mortgage Broker do for me?
Mortgage brokers essentially work as the link between you, and various lenders, both with banks and non-bank institutions.
We always have your best interest at the forefront of our minds. We work to align your individual requirements with the loan’s attributes to ensure you get the most out of your home or business loan, ensuring the most favourable rate is secured for you on every occasion.
Having an experienced mortgage broker on your side, takes the stress off your shoulders, as it is our job to research and compare the market to suit your needs, communicate with your chosen lender (so you don’t have to) and help guide you through the entire process. Answering any questions you have throughout the process, as well as assisting with finalising paperwork.
Researching for the best Mortgage Broker
Doing thorough research may seem overwhelming, but trust us, starting your journey with proper research will simplify the rest of the process. This groundwork will equip you with the knowledge and expertise similar to that of a Mortgage Broker, who will take care of the rest for you!
How extensive is their experience?
Experience matters. If it didn’t, you would most likely just roll with the first Mortgage Broker that appeared on the top of your Google search and your experience may be underwhelming.
Look into how many years of experience they have. The more years of experience they have under their belt, the more confidence you will have knowing you are in the right hands when you find a mortgage broker best suited for you.
Whether you are looking into the services of a company, or an individual, some of the most important questions to find the extent of their experience are:
What qualifications and accreditations do they have?
Qualified mortgage brokers should have the following:
- Certificate IV in Finance and Mortgage Broking
- Be accredited under the National Consumer Protection Act
- Be a member of the Mortgage & Finance Association of Australia (MFAA) and/or the Finance Brokers Association of Australia (FBAA)
Are they licensed?
All mortgage brokers should have their own Australian Credit Licence or alternatively, as required by the Australian Securities and Investments Commission (ASIC), they should be qualified to act as an authorised Credit Representative.
How many lenders have they worked with?
Brokers are limited to a list of banks they can obtain loans from, which is referred to as their “lender panel.”
Ensuring your broker has worked with multiple lenders is crucial for your financial interests as it provides you with a wider range of loan options.
A reliable broker should have a diverse range of lenders on their panel, as it will help to utilise different options based on the borrowers’ situation. It is best to confirm the number of lenders the broker has on their panel, how many they work with, and inquire about the reasons behind their choices.
Do they have positive reviews?
Customer testimonials provide the most authentic insight into a product or service. Explore their Google reviews to read about others’ experiences. What do customers say about the services reliability, friendliness, and honesty? How prompt was their response?
Ideally, a reputable mortgage broker will have a portfolio of satisfied customers to share with the community and potential new clients.
If any of your family or friends have engaged with the services of a mortgage broker recently, ask them about their experience. Were they satisfied with their broker, and the guidance received? What qualities would they seek in their future broker?
What are the fees, charges & commissions?
By law, mortgage brokers must explain exactly how they are compensated, or paid. Typically, brokers earn a commission based on a percentage from the bank that is granting the loan, which is why there is no costs associated for you to use the services of a mortgage broker.
Consider it a warning sign if a broker struggles to address fundamental inquiries regarding charges, commissions, and ownership structures. Any reliable mortgage broker should consistently provide clear and transparent information about their business operations and services.
Find the best Mortgage Broker Geelong at The Hrkac Group
If you are looking for the best Mortgage Broker Geelong, our team at the Hrkac Group is here to provide you with practical and effective financial advice.
We’ll assist you in finding the best home, or business loan solution tailored to your specific needs. Our honest, knowledgeable team of Geelong mortgage brokers will give you the confidence to negotiate for your future, so together, we can develop and maintain your wealth with our transparent approach.
Contact our team of Mortgage Brokers today on (03) 5224 2366 or book an appointment here.
It’s tax time again! The end of the financial year seems to arrive quicker every year. This can be a stressful time of year that many of us might dread, however, utilising the end of the financial year can be the perfect opportunity to organise your finances.
To avoid the hassle of amendments and ensure your tax return is correct and complete, we recommend waiting until all of your information is available on your ATO records, including possibly:
- Your income statement/(s) status is “Tax Ready” before proceeding to lodge your return
- Ensuring Private Health Insurance Information is available
- Any other income, such as Interest, dividends and managed funds, is available on your ATO records
When to complete your tax return
When your income statement is marked as “Tax Ready,” it means your employer has finalised all relevant details regarding your wage, tax, and super contributions. Using this final information will ensure the accuracy of your tax return.
Lodging your return with a “Not Tax Ready” status means you will be relying on incomplete or estimated information, which will increase the risk of errors and potential discrepancies. If your employer finalises your income statement after you’ve lodged your return, you will need to amend your return, which can be time-consuming and may result in additional tax liabilities and penalties may apply.
Income Statements (Formally known as Payment Summaries or Group Certificates)
To proceed with lodging your tax return, you first must have a summary of employee income, which is also known as an Income Statement (Formally known as a Payment summary or group certificate).
Every year, all workers must have access to this information provided by their employer by July 14th. The same deadline still applies, regardless of if the amount being withheld is $0.
Private Health Insurance
Due to recent changes made by the Australian Government, health funds are no longer obligated to automatically provide members with an annual tax statement via mail or email. If you file your tax return online using myTax or through a registered tax agent, you no longer need to manually enter your health insurance tax information, and it will be automatically filled in by late July.
If you and your entire family unit don’t have the appropriate private patient hospital cover, you may be liable for the Medicare Levy Surcharge (MLS) in addition to the 2% Medicare Levy. The surcharge amount does differ as it depends on your income and individual circumstances. By you and your entire family unit purchasing suitable hospital coverage through an approved health insurer, you can avoid this surcharge at tax time. (Please note that this can be apportioned on a daily basis where coverage commences part-way through a year)
Home Office Deductions
The number of people working from home has increased since COVID-19. If you work from home, you may be eligible to claim deductions for related expenses. These deductions can include costs for stationery, energy, and office equipment.
Per 2023 financial year, there are two methods and both require you to maintain relevant records and documentation. This includes:
- Fixed Rate Method – Require a record of all the hours you work from home for the entire year
- Actual Cost Method – Require a record and documentation of all your home office expenses and the business use percentage
If you would like to check your eligibility and find out more information on what you can claim, you can learn more here.
Support for Small Businesses
As part of the 2024–25 Budget on May 14, 2024, the government proposed an extension on the $20,000 instant asset write-off for small businesses by an additional 12 months until June 30, 2025. This measure aims to improve cash flow and reduce compliance costs.
Small businesses with a turnover of less than $10 million can immediately deduct the cost of eligible depreciating assets under $20,000. This applies to assets used or installed between July 1, 2023, and June 30, 2025. “Immediately deductible” means claiming a tax deduction in the same year the asset is purchased and used. For GST-registered businesses, the cost must be under $20,000 after GST credits; for non-registered businesses, it must be under $20,000 including GST, applying to each individual asset. (Please note that neither the 2024 or 2025 Financial Years have been Legislated yet and the Senate is requesting that the limit be set at $30,000).
Tax returns Geelong with the experts at The Hrkac Group
If you need assistance with lodging your tax return or you have any questions about how to best prepare for tax time and maximise your return, The Hrkac Group team of accountants have the knowledge and are here to help make your life easier.
Get in touch and book your tax appointment with the HG Accounting professionals today! Call us on (03) 5224 2366 or book your appointment here.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
Liability limited by a scheme approved under Professional Standards Legislation.
Retirement Planning Geelong
Retirement – A phase many of us daydream about. Whether it involves spending more time with family, travelling the world, or volunteering for a cause we’re passionate about, one thing is certain: retirement costs money.
So, when should you take the plunge into retirement, and how much money is enough to comfortably retire?
What Is the Best Age to Retire?
Ultimately, deciding when to retire is a highly personal choice. However, here are some key considerations:
Average Retirement Age: Of the 140,000 Australians who retired in 2020, the average age was 64.3. Most people still expect to retire in their mid-to-late- 60s.
Financial Factors
Your ability to finance retirement plays a crucial role. Key sources of income for retirees include:
- Government Pension: Currently, the government pension is the primary source of personal income for retirees in Australia.
- Superannuation: Many retirees rely on their superannuation funds or account-based pensions (drawn from their super balance).
- Age Pension: For those born on or after 1 January 1957, the qualifying age for the age pension is 67.
Factors to Consider Before Retiring
- Assets: Evaluate your assets, including home ownership, savings, and investments outside of super.
- Annual Expenses: Understand your annual spending needs.
- Savings: Decide how much you’re willing to dip into your savings.
- Housing: Consider downsizing or selling your house.
- Part-Time Work: Decide if you’ll continue working part-time after retiring.
- Age Pension Entitlements: Keep in mind that earning over a certain amount per fortnight can affect the amount of pension you receive, however, recent changes allow an age pensioner to earn more from working without it affecting their age pension.
But it’s not just about the money
While the financial aspects of retirement are vitally important, it is not the only consideration. In many ways, and perhaps more importantly, the non-financial aspects need to be considered carefully. Ask yourself, and honestly answer the following questions:
How will you spend your time?
A couple of weeks in retirement will just feel like being on holiday, but how will you adjust to every week being like the weekend?
Will you suffer from irrelevance?
When people are working and are part of a workplace structure, they have a certain status that comes with the position they hold. They may be an expert in a particular field. However, in retirement, that status may simply evaporate.
Has your health called “full time”?
For some, the time to retire may be heralded by physical or mental health concerns. Perhaps either the brain or the body is no longer able to cope with the day-to-day pressure of work. Sadly, for some, this may be at a time much earlier than they would have liked.
Caring for others
The current generation of people entering retirement is sometimes referred to as the “sandwich generation”. They become the carers for their grandchildren and their older parents and relatives. While the need to care for others will often be the driver behind people deciding to retire, careful consideration needs to be given to incorporating plenty of time for yourself. You should not swap one full-time job for another (unpaid) full-time job.
Expert advice on Retirement Planning Geelong with the Hrkac Group
While finances and other personal circumstances can dictate the right time to retire, merely retiring because you have reached some arbitrary age dictated by a bureaucrat somewhere in their ivory tower should not be an option. Remember, in Australia, there is generally no mandatory retirement age.
Retire on your terms and when it is best for you. Seek qualified, independent financial advice to tailor your retirement plan to your specific circumstances when thinking about retirement planning Geelong. Remember, there’s no one-size-fits-all approach, but thoughtful planning can help you transition into a fulfilling retirement phase.
Contact us and get in touch and get the professional advice you need today! Call our team of Financial Advisors on (03) 5224 2366 or book your appointment here.
The content within this blog has been sourced from our Licensee, Alliance Wealth’s blog ‘Realise Your Dream’.
https://blog.centrepointalliance.com.au/realiseyourdream/when-is-the-right-time-toretire
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
From March 31st 2024, changes to the Victorian WorkCover Laws were introduced. They have been made under the Workplace Injury Rehabilitation and Compensation Amendment to modernise the scheme. This has come about due to the scheme being referred to as “fundamentally broken”. It was no longer meeting the needs of those whom it was originally designed for over 30 years ago.
In 2023/2024 Victorian employers experienced a rise of 42% in their WorkCover Premiums which increased from 1.27% to 1.8%. WorkSafe has announced the rate for 2024/2025 will not see any increases and will remain at 1.8%.
Individual businesses will continue to expect changes to their premium rate as they are based on specific experiences within their respective industry. However, employers who are experiencing a significant increase in their industry could find their premiums increasing by up to 30% in 2024/2025.
What changes have been made?
Mental Injury Eligibility
Mental Injury claims in comparison to Physical Injury claims have proven to be more expensive. This is due to workers suffering from Mental Injuries generally remain off work for longer periods of time. It’s said by the year 2030, we can expect a third of all claims will be related to mental injuries. In order for WorkSafe to combat these existing challenges, changes in eligibility requirements have been outlined and will apply to any mental injuries sustained on or after 31 March 2024.
A new mental injury definition has been put in place. In order to be eligible for compensation, the following definition must be met. “A mental injury is defined as an injury that causes significant behavioural, cognitive or psychological dysfunction, and has been diagnosed by a medical practitioner in accordance with the Diagnostic Statistical Manual of Mental Disorders.”
Along with the modernisation of the scheme, new exclusions for stress and burnout have been outlined.
Ineligible Compensation
Workers will be ineligible to receive compensation if the cause of stress or burnout is one or more of the following:
- Pressures around an increased workload
- Working additional hours
- Interpersonal conflict with co-workers that is not considered bullying or harassment
Typically, the above reasons will be considered as:
- Usual or typical
- Reasonably expected to occur in the course of their duties
Exemptions to Eligibility
Workers may remain eligible for compensation and an exemption of this rule will apply if they are exposed to situations including:
- Repeated and unreasonable conflict with people, which is considered bullying and harassment
- If a worker’s mental injury has been predominantly caused by stress or burnout resulting from traumatic events that are considered usual or typical and reasonably expected to occur in their work
If you are seeking further information on Mental Injury eligibility, download the information sheet here.
Second Entitlement Review
130 Week – Additional Whole Person Impairment Requirements
Previously, as workers approached their 130 weeks of weekly paid compensation, they would need to review their claim. Reviewing the claim would then determine if payments would be extended past the original 130 weeks. Generally, the final outcome would result in the termination of future payments.
To continue to receive weekly payments once 130 weeks have been exceeded, an additional requirement has been implemented, which includes:
- Having a whole person impairment (WPI) of 21% or more and
- Meet the existing capacity test requirement
The WPI requirement will only apply to claims that reached 130 weeks on, or after 31 March 2024. From this date for weekly compensation to continue to be paid post 130 weeks, it must additionally be determined by an independent medical examiner that a worker has a whole person impairment as a result of their injury or injuries from the same event of 21% or more.
For further information on whole-person impairment, download the information sheet here.
Further supported changes
To improve the way the WorkCover scheme operates, a number of supporting changes have also been made and make sure the changes in the Scheme Modernisation Act are effective. These include:
- Changes to WorkSafe’s ability to share information across business units
- Requirements for certain rejected claims that can’t be resolved through conciliation to be determined by the courts, instead of arbitration
- Independent reviews of the changes introduced under the Scheme Modernisation Act to be conducted by a panel of experts in 2027
- Establishment of the Return to Work Advisory Committee, to provide advice to the WorkSafe Victoria Board on return-to-work initiatives
The implemented changes are set to deliver a more sustainable scheme to ensure Victorian workers are supported well into the future.
Get professional advice from an Expert Geelong Accountant at the Hrkac Group
If you need assistance with navigating your business through these changes or are seeking any further business advice, contact The Hrkac Group Geelong-based Accounting team. You can make an appointment via email or phone (03) 5224 2366.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
Liability limited by a scheme approved under Professional Standards Legislation.
When it comes to preparing and executing a valid Will, several factors need to be taken into account to comply with legal requirements.
A Will is a legal document that sets out individual testamentary wishes. This comes into effect once you have passed away. A Will outlines one’s wishes regarding details on your estate, including who you want to inherit your estate assets. (E.g. specific gifts, family heirlooms, share portfolio, company directorships), as well as your preferred Executor(s).
A Will also outlines other personal matters. This can include who will be granted guardianship for your surviving children. (If under the age of 18 years.)
Often, thinking about writing a Will can be a daunting task and something that can often be put on the back burner. It may have even crossed your mind to attempt writing up a testamentary document yourself. But, despite your best efforts to sign and write a document outlining your final wishes, it may be deemed Informal, or Invalid and entirely dismissed by the courts if it doesn’t constitute an official legal document. As a result, this can cause headaches and a great deal of unnecessary stress for all parties involved.
What is an Informal Will?
An Informal Will is a document that is intended to act as a Will but does not comply with the set strict legal requirements. Ultimately, an Informal Will may not be considered valid before the courts when applying for a Grant of Probate. (Known as Letters of Administration with the Will annexed.)
An Informal Will can come in several forms, including:
- Electronically typed notes; This could be on a computer, tablet, or phone
- A voice recording or video recording
- A handwritten note
- A text message or email
- Instructions to a solicitor with directives to create or update a Will that was not signed or witnessed before the death
What makes a Will invalid?
A Will may be deemed invalid under several circumstances, including but not limited to:
- Not complying with the requirements of the Wills Act 1997 (Vic)
- The Will is not signed by the Willmaker
- The Will is signed without two independent or authorised witnesses present
- The signature on the Will does not match legitimate examples or is fraudulent
- The Willmaker did not have the necessary testamentary capacity. (I.e. sound mind) to write a Will (e.g. suffering from a mental illness and/or mental impairments, for example, dementia)
- The Willmaker is under duress or is influenced by a family member in the writing a new or amending a current Will
- Not revoking previous Wills
Can you prove an Informal Will?
Not all Invalid or Informal Wills are automatically dismissed by the court. The court has discretion to decide whether or not an Informal Will can be valid and be admitted to probate. Each situation is dealt with on a case-by-case basis, and the Will in question will be subject to meeting the legislative requirements of the Administration and Probate Act 1958 (Vic). Providing the Will meets all the pre-requisites, a large amount of evidence will be required to be submitted to court, to support the testamentary wishes of the Willmaker.
Inevitably, this leads to a significant increase in legal costs and delay in administrating the deceased estate. Further, it exposes the family assets to claims from extended family members or former spouses. Being granted probate is an extremely complex process and does not always end in the desired outcome. The desired outcome is finalising and distributing the estate to the desired beneficiaries.
Informal or Invalid Wills can cause significant amounts of stress to all involved, so when the time comes for you to consider making a Will, it is worth investing in a professional lawyer to ensure your final Will meets all legal requirements and is valid.
Making a Will Geelong with The Hrkac Group
Firstly, having a valid Will gives you peace of mind that your estate will be distributed to your intended beneficiaries. In addition, providing your loved ones with legal protection to ensure your wishes are complied with.
You want to be sure that your Will cannot be contested and that it will be considered valid in accordance with the relevant laws.
Our team of professionals can assist you with the following:
- Drafting & updating Wills (including Wills with trusts)
- Appointing a financial attorney under an enduring power of attorney
- Appointing a personal attorney under an enduring power of attorney (formerly known as guardianship)
- Appointing a medical treatment decision-maker
Learn more about Wills & Powers of Attorney here.
In conclusion, with careful execution of your Will and attention to your requirements, we can help protect your final wishes. The Hrkac Group can help you with making a will Geelong, so if you are ready to take that next step and take control of your future, contact our Geelong-based Legal team at The Hrkac Group today.
Make an appointment today via email or phone our local Geelong offices on (03) 5224 2366.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
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The Albanese Government recognises the economic realities of 2024: Australians are under pressure right now and deserve tax cuts.
It has been announced that The Albanese Labor Government is delivering a tax cut. This is for every Australian taxpayer to provide targeted cost of living relief, for broader and better” outcomes.
These new tax cuts are designed to provide bigger tax cuts for middle Australia. Set to make a real difference to 13.6 million taxpayers. Mr Albanese states these changes will help with easing the cost of living. All whilst making the system fairer and boosting workforce participation.
“Our plan will more than double the benefit for Australians on the average income. And it will look after low-income earners and part-time workers as well,” Mr Albanese said.
From 1 July 2024, the Albanese Labor Government has proposed:
- Reduce the 19 percent tax rate to 16 percent (for incomes between $18,200 and $45,000).
- Reduce the 32.5 percent tax rate to 30 percent (for incomes between $45,000 and the new $135,000 threshold).
- Increase the threshold at which the 37 percent tax rate applies from $120,000 to $135,000.
- Increase the threshold at which the 45 percent tax rate applies from $180,000 to $190,000.
These proposed changes would result in the following:
- All 13.6 million taxpayers will receive a tax cut – and 2.9 million more taxpayers will receive a tax cut compared to Morrison’s plan.
- 5 million taxpayers (84 percent of taxpayers) will now receive a bigger tax cut compared to Morrison’s plan
- 8 million women (90 percent of women taxpayers) will now receive a bigger tax cut compared to Morrison’s plan.
- A person with an average income of around $73,000 will get a tax cut of $1,504 – that’s $804 more than they were going to receive under Morrison’s plan.
- A person earning $40,000 will get a tax cut of $654 – compared to nothing under Morrison’s plan.
- A person earning $100,000 will get a tax cut of $2,179 – $804 more than they would receive under Morrison’s plan.
- A person earning $200,000 will still get a tax cut, which will be $4,529.
- The Government will increase the Medicare levy low-income thresholds for 2023-24.
Proposed Changes Summarised
| 2023-24 | 2024-25 | ||
| Thresholds ($) | Rates (%) | Thresholds ($) | Rates (%) |
| 0 – 18,200 | Tax-free | 0 – 18,200 | Tax-free |
| 18,201 – 45,000 | 19 | 18,201 – 45,000 | 16 |
| 45,001 – 120,000 | 32.5 | 45,001 – 135,000 | 30 |
| 120,001 – 180,000 | 37 | 135,001 – 190,000 | 37 |
| Over 180,000 | 45 | Over 190,000 | 45 |
Geelong Accounting
The proposed changes outlined in this blog will necessitate legislative changes, therefore the implementation of these changes into legislation remains uncertain.
As you prepare for your next tax return, it’s always advisable to consult with a tax accountant or use a reliable tax calculator to understand the changes and accurately estimate your tax obligations. Staying informed about tax policy updates is crucial to ensure compliance.
The expertise and experience of our Geelong Accountants at The Hrkac Group can help you with any tax return enquiries you may have.
To make an appointment to meet with one of our friendly Geelong Accountants, contact us via email or phone (03) 5224 2366.
This information has been provided as general advice. We have not considered your personal or financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
Many retirees use their superannuation to commence a pension that pays income at regular intervals. The most common type of pension is an account-based pension. These are also sometimes referred to by their former name – allocated pensions.
Account-based pensions are a very tax-effective way of setting up super to provide a regular flow of income in retirement.
However, like anything to do with super, some hurdles need to be cleared first. This will ensure the efficient and compliant operation of a pension account.
Let’s focus on the amount of income that needs to be drawn each financial year.
For an account-based pension to receive optimal tax treatment, a minimum amount of income needs to be drawn each year. This is based on a formula that varies with age.
When a pension first commences to be paid, and on 1 July each year thereafter, a percentage factor is applied to the balance of the pension account. The result is the minimum income that needs to be paid from the pension account in the coming year.
The following table sets out the current minimum percentages:
Age on 1 July |
Percentage |
| Under 65 | 4% |
| 65 to 74 | 5% |
| 75 to 79 | 6% |
| 80 to 84 | 7% |
| 85 to 89 | 9% |
| 90 to 94 | 11% |
| 95 and over | 14% |
In simple terms, a 72-year-old with a pension account balance of $340,000 on 1 July 2023 needs to draw a minimum income of $17,000 in the 2023-24 financial year.
The maximum income is not capped, except for pension paid under transition to retirement rules where the pension income is capped at a maximum of 10% of the account balance each year.
If a pension commences part way through a financial year (i.e. other than on 1 July) the minimum income that is required to be drawn is pro-rated for the number of days in the financial year the pension is in force.
Taking our earlier example of a 72-year-old, if their pension commenced on 1 September 2023, the minimum income they will need to draw in 2023-24 is $17,000 x 303/365, or $14,112.
As a result of the economic turmoil that accompanied the recent global pandemic, the government reduced the minimum income to be drawn from an account-based pension (and certain other types of superannuation income stream) by 50% for the 2019-20, 2020-21, 2021-22 and 2022-23 financial years. Therefore, during these periods, a person aged between 65 and 74 only needed to draw an income of 2½% of their account balance to satisfy the prescribed minimum.
For any readers that had taken advantage of the lower minimum income requirement for the past 4 financial years, the discount was discontinued from 1 July 2023. Therefore, if you find you are being paid more income from your account-based pension than you need, it would be a good time to speak with a financial planner and discover the options that may be available to you.
By way of example: If you have been receiving income from your pension account of (say) $30,000 and this had been adequate for topping up your income needs, now having to draw an income of $60,000 may be more than needed. One option, particularly for many people under the age of 75, might be to simply re-contribute the excess income back into superannuation as a non-concessional contribution. However, before implementing specific strategies, seek appropriate advice.
Retirement Planning Geelong
Meet with The Hrkac Group Geelong-based Financial Planning team and make an appointment. You can book with us via our booking link, email or phone (03) 5224 2366.
The content within this blog has been sourced from our Licensee, Alliance Wealth’s blog ‘Realise Your Dream’.
https://blog.centrepointalliance.com.au/realiseyourdream/how-much-should-i-draw-from-my-pension
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accept responsibility for any loss suffered by any person arising from reliance on this information.
If you have had your current home loan for a number of years, it is likely your needs have since changed. That, or you may be missing out on flexible features or add-ons that have since become available.
Refinancing your home involves paying out your current loan with a new one. In many cases, this will be with a different bank entirely. Why? This may allow you to select certain features that better suit your lifestyle, wants and needs.
Here are 8 reasons why you could consider refinancing your home:
1. Save on Fees
Your interest rate will have a significant impact on how much you actually pay on your mortgage. If you have had your loan for a number of years, you may be paying loyalty tax. This is when lenders charge long-term customers a higher interest rate, compared to new customers. Securing an interest rate just 0.5% lower than your existing loan can see you save thousands. Ultimately resulting in your loan being paid off quicker, and who doesn’t want those extra dollars in their pocket?
It is important to remember your home loan is more than the interest rate. All lenders measure their rates differently, which is why it is so important to speak with a Lending Specialist or Mortgage Broker to ensure you are reviewing all aspects of the loan before making the change.
2. Customise your loan
It is likely that your personal circumstances will change over the course of your home loan and you may need to alter your loan accordingly. When getting your home loan years ago, it may have included features that no longer suit you today, or you have found that over time, the features on your current loan are just not being maximised. Adding or removing features to better suit your lifestyle can help give you the flexibility you need. There are a range of features available to you, including flexible repayments, redraw facilities or even offset accounts. As always, it is best to consult our team of Geelong Mortgage Brokers to explore the best path for you.
3. Opt for a fixed rate
Fixed rates work really well in the right situations however upon the end of your fixed rate term, you will be transferred to a higher variable rate by default. However, refinancing your fixed loan once it has ended, may help you avoid having to pay any associated fees with leaving a fixed home loan early.
4. Access home equity
If you want to access your home equity, refinancing is the way to do it. Your equity is the portion of your home that you own outright. You can calculate your equity by subtracting your remaining home loan from the balance of your home’s current value. Accessing your equity can then help fund major purchases or investments.
5. Investment Opportunities
Refinancing your home can help you maximise your equity on your home. You could then use those funds to invest in real estate, shares, or other opportunities.
7. Facilitate Renovations
Enhance your property’s value and move closer to achieving your dream home by undergoing renovations on your property. To avoid having to take out a new loan to fund your renovations and ensure your savings stay in your bank, think about using the equity in your home which can be unlocked by refinancing your home.
7. Debt Consolidation
You may have other debts, including personal loans, car loans or credit cards.
Debt consolidation involves combining those other debts with your home loan. This simplifies repayments and makes managing your repayments more convenient.
8. Switching Lenders
You may not be 100% satisfied with your current lender. This could be due to a number of factors, some of them being: inadequate website, mobile app or in-person services, inflexible repayment methods or a negative experience with the customer service provided. Whatever the reason, if you do decide to refinance based on the lender, ensure you are taking into consideration all aspects of the new loan and not just the lender.
Geelong Mortgage Brokers at The Hrkac Group
If you are considering refinancing your home loan, there are steps you need to take to ensure you are eligible to do so. Our team of Geelong Mortgage Brokers are dedicated to helping you ensure your home loan journey is as simple and stress-free as possible. We have access to a range of home loans offered by banks and non-banking lenders, to ensure we find the best suitable option for you.
Take control of your financial future by meeting with our team of Geelong Mortgage Brokers and home loan specialists at The Hrkac Group. Make an appointment today via our Contact Us page, or phone us on (03) 5224 2366.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly, neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
One of the surprising things about superannuation is the lack of engagement people have with it.
It is not until retirement begins to appear on the distant horizon that many start to become more interested in how healthy, or otherwise, their retirement nest egg is looking.
One of the problems that has emerged with super over the years has been the proliferation of individual accounts. It was not uncommon for a person to have several individual accounts. Each time a person changed jobs; a new super fund would be opened. This leads to the duplication of super accounts and with that, the duplication of fees and often, insurance coverage.
However, in recent years the trend for people to have multiple accounts has been trending down. For the most part, has been a good thing.
Superannuation Law Requirements
Recent changes to superannuation laws now require employers to look for existing superannuation accounts before simply paying their new employees’ super to their default fund. In addition, superannuation laws specifically require superannuation funds to identify and consolidate multiple superannuation accounts held by their members. This is referred to as intra-fund consolidation.
The Australian Securities and Investment Commission (ASIC) carried out a survey and found that three out of nine trustees of superannuation funds did not have policies in place to identify members with multiple accounts. ASIC is working with super fund trustees to increase compliance in this area. While the idea of consolidating super and eliminating multiple accounts will be desirable, there will be occasions where having more than one superannuation account is either necessary or desirable. Superannuation benefits will generally comprise a taxable component and a tax-free component.
Estate Planning
When it comes to estate planning, there may be value in making non-concessional contributions, which form part of the tax-free component. This separates accumulation accounts thereby quarantines them from taxable superannuation benefits.
Often superannuation fund membership will include life and total and permanent disablement insurance cover. And, in many instances, this cover has been included without the need for the member to meet any medical requirements.
Therefore, for a superannuation fund member that has multiple superannuation accounts with embedded life insurance cover, and their health makes it unlikely they can obtain insurance either at all, or at an affordable price if they were medically underwritten, holding more than one superannuation account with life insurance attached can be a bonus.
There will be situations when consolidating superannuation accounts cannot be done. Alternatively by doing so would not be in a member’s best interest.
The obligations imposed on superannuation funds to consolidate their members’ multiple accounts into a single superannuation account may be contrary to some of the strategies that have been specifically structured to obtain a particular outcome. With that in mind, it is important to pay attention to any correspondence you receive from your superannuation fund. Remember reinstating a former situation, particularly if intra-fund consolidation has occurred, may be difficult and very time-consuming.
Expert financial advice with The Hrkac Group
Having a financial planner on your team can be worth its weight in gold when navigating the complexities of superannuation. Plan a meeting with our Geelong-based Financial Planning team. Make an appointment today via our booking link, email or phone (03) 5224 2366
The content within this blog has been sourced from our Licensee, Alliance Wealth’s blog ‘Realise Your Dream’.
General Advice Warning
This information has been provided as general advice. We have not considered your financial circumstances, needs, or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly neither nor its related entities, employees, or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.
A recent review of the Privacy Act Exemption in Australia has brought forth a pivotal change. This will impact small businesses with an annual turnover of $3 million or less. In this article, let’s explore the reasons behind this shift. We’ll delve into the significant proposals made by the review, and discuss the implications of these changes for small businesses. We’ll also look at the steps the government plans to take to ensure a smooth transition while safeguarding individuals’ privacy.
A Changing Landscape of Privacy:
The digital age has ushered in a new era of data privacy concerns. Personal information is more vulnerable than ever. To misuse and data breaches, making the protection of this data of paramount concern. The Privacy Act in Australia plays a crucial role in safeguarding individuals’ privacy, but its application hasn’t been consistent. Small businesses, with annual turnovers of $3 million or less, have been exempt from certain privacy obligations. This is set to change.
Proposals from the Privacy Act Review:
The Privacy Act review has proposed several key changes aimed at strengthening data privacy. These proposals have gained the government’s support, marking a significant shift in the country’s privacy regulations. The proposed changes include giving individuals greater control over their privacy. This is done by ensuring entities seek informed consent regarding the handling of their personal information. Additionally, entities will be held accountable for the way they handle individuals’ information. With enhanced requirements for information security and destruction of data when it’s no longer needed. Moreover, the review seeks to simplify obligations for entities handling personal information on behalf of others and introduces the idea of a Children’s Online Privacy Code to provide stronger protections for children online.
Removal of the Small Business Exemption:
One of the most substantial proposals from the Privacy Act review is the removal of the small business exemption. This exemption had previously spared small businesses with annual turnovers of $3 million or less from certain privacy obligations. However, the review committee found that community expectations around privacy had evolved, and they fully expected their personal information to be safeguarded. The removal of this exemption is a clear reflection of the changing landscape of data privacy, but it comes with a caveat. The government has acknowledged that further consultation with small businesses and their representatives is necessary to understand the full impact of this change.
Implications for Small Businesses:
The removal of the small business exemption carries significant implications for small businesses across the nation. They will now need to adapt to a new set of regulatory requirements, which could prove challenging. Non-compliance with these new regulations could result in penalties, fines, and reputational damage. Therefore, small businesses must not only understand these changes but also put in place strategies to adhere to the Privacy Act and protect customer data.
Ensuring Compliance and Data Protection:
Small businesses can prepare for the changes by conducting a privacy impact analysis and data audit. These assessments will help in understanding the extent of data handling and its potential vulnerabilities within the organisation. Implementing robust data protection policies and practices will be key to ensuring compliance with the evolving regulations. These policies should cover data security, access control, encryption, and procedures for data destruction when it is no longer required.
Government’s Commitment to Privacy:
The government has demonstrated a strong commitment to ensuring data privacy in the digital age. This commitment is not new; it builds upon past actions. In the previous year, the government significantly increased penalties for privacy breaches and empowered the Australian Information Commissioner with greater authority to address such breaches. In response to the changes brought about by the Privacy Act review, the government will conduct an impact analysis. The government is also set to collaborate with community members, businesses, media organisations, and government agencies to develop legislation and guidance material that aligns with the new privacy landscape.
The Expectations of Australians:
Australians are increasingly reliant on digital technologies in various aspects of their lives. Whether it’s for work, education, healthcare, or everyday commercial transactions, the digital realm plays a crucial role. In this context, when Australians are asked to share their data, they rightfully expect that it will be handled and protected with the utmost care and security.
The removal of the small business exemption from the Privacy Act signifies a significant transformation in Australia’s data privacy and protection approach. While it may pose challenges for small businesses, it is crucial for ensuring individuals’ privacy and building trust in a digital age. The government’s commitment to working with small businesses and other stakeholders is a positive step toward a smooth transition. As the digital landscape continues to evolve, small businesses need to adapt, prioritise data protection, and honour the trust that customers place in them. This change is a reminder that data privacy is a shared responsibility. All entities, regardless of size, must play their part in safeguarding personal information.
Geelong Accountants
If you’re interested in knowing more about your obligations as a small business, speak to the expert Geelong accountants at The Hrkac Group. Non-compliance with these new regulations carries the risk of penalties. Small businesses need to understand these changes and put strategies in place to adhere to the Privacy Act and protect customer data. Contact our experienced team of Geelong accountants if you need help implementing data protection policies and practices to ensure compliance with the evolving regulations.
To make an appointment with one of our friendly Geelong accountants today, contact us via email or phone (03) 5224 2366.
