Boost Your Future: The Benefits of Extra Super Contributions
Superannuation, or ‘super’, is a way of saving for retirement in Australia. While your employer is required to make contributions to your super, adding a bit more yourself can make a big difference. Here’s why making additional contributions to your superannuation is a smart move.
1. Tax Benefits
One of the biggest advantages of contributing extra to your super is the tax benefits. When you make voluntary contributions from your pre-tax income (known as salary sacrifice), these contributions are taxed at a lower rate of 15%, compared to your regular income tax rate, which can be much higher.[1]This means you can save on taxes while boosting your retirement savings.
2. Government Co-Contributions
If you’re a low or middle-income earner, the government may also contribute to your super. For every dollar you contribute after tax, the government might add up to 50 cents, up to a maximum of $500 per year.[1]This is a great way to get extra money into your super without any extra effort.
3. Compound Interest
The earlier you start contributing extra to your super, the more you benefit from compound interest. This means you earn interest on your interest, and over time, this can significantly increase your super balance. Even small additional contributions can grow substantially over the years.[2]
4. Financial Security in Retirement
By making extra contributions, you’re investing in your future financial security. The more you have in your super, the more comfortable your retirement can be. You’ll have more money to cover living expenses, healthcare, travel, and other activities you enjoy.[3]
5. Less Reliance on the Age Pension
With a larger super balance, you may be less reliant on the government Age Pension. This can give you more financial independence and flexibility in retirement. It also means you’re better prepared for any unexpected expenses that might come up.[3]
6. Insurance Benefits
Many super funds offer insurance cover, such as life insurance, total and permanent disability (TPD) insurance, and income protection insurance. By having a higher super balance, you can ensure that you have adequate insurance cover, providing peace of mind for you and your family.[4]
7. Spouse Contributions
If you have a spouse, you can also contribute to their super. This can be particularly beneficial if one partner has a lower super balance. By boosting your spouse’s super, you can both enjoy a more comfortable retirement.[1]
8. Downsizer Contributions
If you’re 55 or older and selling your home, you can make a downsizer contribution to your super of up to $300,000 from the sale proceeds. This is a great way to boost your super balance without affecting your contribution caps.[1]
9. Investment Returns
Super funds invest your money in various assets like shares, property, and bonds. By contributing more, you’re increasing the amount invested, which can lead to higher returns over time. This can significantly grow your super balance, especially if your investments perform well.[4]
10. Peace of Mind
Finally, making extra contributions to your super can give you peace of mind. Knowing that you’re taking steps to secure your financial future can reduce stress and help you feel more confident about your retirement plans.[2]
Conclusion
Making additional contributions to your superannuation is a powerful way to enhance your retirement savings. With tax benefits, government co-contributions, and the magic of compound interest, even small extra contributions can make a big difference. Start today and invest in your future!
References
[1] Options for adding to your super | Australian Taxation Office
[2] Personal super contributions | Australian Taxation Office
[3] Top 10 superannuation benefits for saving money | ART
[4] Super contributions – Moneysmart.gov.au
The content within this blog has been sourced from our Licensee, Alliance Wealth’s blog ‘Realise Your Dream’.
https://blog.centrepointalliance.com.au/realiseyourdream/boost-your-future
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.
In recent years, the Australian government has introduced several measures to make electric vehicles (EVs) more accessible and affordable, especially for businesses and individuals looking to adopt greener alternatives. One such measure is the Fringe Benefits Tax (FBT) exemption for eligible electric vehicles (EVs). In this blog, we’ll break down the key aspects of this exemption and how it can significantly reduce the cost of an EV, helping both businesses and individuals save thousands of dollars annually.
What is fringe benefits tax (FBT)?
Fringe Benefits Tax (FBT) is a tax paid by employers on certain benefits provided to their employees or their associates (such as family members) in place of, or in addition to, salary or wages. These benefits can include items like company cars, low-interest loans, free or discounted goods, or entertainment. The tax is calculated based on the value of the benefit provided, and the employer is responsible for paying it. FBT is separate from income tax and is calculated annually, with rates and rules set by the Australian Taxation Office (ATO). The goal of FBT is to ensure that non-cash benefits are taxed appropriately, ensuring fairness between those who receive salary-based compensation and those who receive benefits in kind.
What is the FBT Exemption?
The FBT exemption for electric vehicles was introduced to incentivise the uptake of cleaner, zero-emission cars. This exemption removes the FBT on eligible electric vehicles and associated car expenses, which includes the cost of electricity to charge these vehicles. The exemption applies to EVs that meet certain conditions and have a value below the luxury car tax (LCT) threshold for fuel-efficient vehicles, which for the 2023/24 financial year is $89,332. This policy, which took effect from July 2022, makes electric cars much more affordable and attractive to both fleet owners and individuals.
Not only does this exemption reduce the cost of purchasing and maintaining an EV, but it also helps bring the total cost of an electric car closer to that of a comparable petrol or diesel vehicle. For companies and employees, this can mean significant savings, especially when bundled with other tax incentives such as salary packaging arrangements.
Eligibility for the FBT Exemption
To qualify for the FBT exemption, the electric car must meet certain criteria, which include the following:
1. Zero or Low Emissions Vehicle: The car must be a battery electric vehicle (BEV), hydrogen fuel cell electric vehicle (FCEV), or a plug-in hybrid electric vehicle (PHEV). However, it must not be a hybrid vehicle that is solely powered by petrol.
2. First Use After 1 July 2022: The car must be first held and used on or after 1 July 2022. This means that even if a car is purchased before this date, it will not qualify for the exemption if it was first used before 1 July 2022.
3. No Luxury Car Tax (LCT): The vehicle must never have been subject to the luxury car tax at the time of its importation or sale.
4. Employee or Associate Use: The exemption applies when the car is used by a current employee or their associate (e.g., family members) for private purposes.
5. Salary Packaging Arrangement: The exemption applies to cars provided through salary packaging arrangements, making it even more advantageous for employees to receive electric cars as part of their compensation package.
What Expenses Are Exempt from FBT?
Under the FBT exemption, the following car-related expenses are exempt from FBT:
- Registration: The cost of registering the electric vehicle.
- Insurance: The cost of insuring the vehicle.
- Repairs and Maintenance: Routine repairs and maintenance of the vehicle.
- Fuel (Including Electricity): The cost of electricity used to charge the electric car.
Additionally, if the expenses would have been deductible to the employee had they incurred them themselves, such as the cost of electricity used for charging, the “otherwise deductible rule” can be applied to reduce the FBT on these items.
However, one point to note is that home charging stations are not considered car expenses for FBT purposes. These may instead qualify as a property fringe benefit or an expense payment fringe benefit.
How Does This Reduce the Cost of an EV?
The FBT exemption has several benefits, especially when it comes to reducing the overall cost of owning an EV. Here’s how it works:
1. Cost of the Car Itself
For businesses and individuals who are eligible, the FBT exemption means that there is no additional tax burden on the car itself, reducing the effective purchase cost. Without the exemption, FBT could add a significant cost to providing a vehicle for private use, particularly for higher-priced models. With the exemption, EVs under the LCT threshold ($89,332) are much more affordable, especially when compared to conventional petrol or diesel vehicles in the same price range.
2. Lower Annual Running Costs
Beyond the initial purchase cost, EV owners also enjoy lower running costs. With the FBT exemption, the annual costs of maintaining an EV—such as registration, insurance, repairs, and electricity—are reduced. For businesses, this can make fleet management significantly more affordable. For employees who use EVs as part of salary packaging arrangements, the savings can be substantial, with lower out-of-pocket expenses and a reduced tax burden.
3. Salary Packaging Benefits
The exemption is particularly beneficial when the car is provided under a salary packaging arrangement. In this case, employees can pay for their EV through pre-tax income, which reduces their taxable income and consequently their overall tax liability. This arrangement makes EVs an even more attractive option for employees looking to reduce their tax burden and save on car expenses.
Transitioning from Plug-in Hybrid Electric Vehicles (PHEVs)
While the FBT exemption for electric vehicles includes plug-in hybrid electric vehicles (PHEVs), it’s important to note that this exemption for PHEVs will expire on 1 April 2025. After this date, PHEVs will no longer be classified as zero or low emissions vehicles under the FBT law.
If you are planning to lease or purchase a PHEV and intend to take advantage of the exemption, it’s wise to do so before the deadline to ensure maximum savings.
Please note that whilst there are grandfathering provisions for eligible PHEVs before this date – the grandfathering rules are quite strict and there are many circumstances that could result in the loss of that grandfathering.
Charging and Electricity Costs
Charging costs are a crucial part of the savings an EV owner can make. The cost of electricity used to charge an eligible electric vehicle is exempt from FBT. However, determining the cost of electricity can sometimes be tricky, especially when charging at home, as it is mixed with the household’s overall electricity consumption.
To simplify this, the government has introduced the EV home charging rate, which is 4.20 cents per kilometre for zero-emission electric vehicles. This can be used to calculate the portion of electricity costs associated with the car when charging at home. Commercial charging station costs can be included as well if the percentage of electricity used for the vehicle can be accurately determined.
Reporting and Compliance
Even though the private use of an eligible electric vehicle is exempt from FBT, it is still considered a reportable fringe benefit. This means that businesses must work out the notional taxable value of the benefits associated with the private use of the electric car and report it accordingly. It’s important for businesses to keep accurate records of usage and any associated costs to ensure compliance with reporting requirements.
Conclusion
The FBT exemption for electric vehicles is an excellent opportunity for businesses and employees to reduce the cost of purchasing and operating an EV. By removing the fringe benefits tax on eligible EVs and associated expenses, the policy makes it easier for businesses to adopt more sustainable fleets and for employees to enjoy the benefits of driving an electric car without the added tax burden.
As the market for electric vehicles continues to grow, this exemption will likely play a key role in supporting the transition to a greener, more sustainable future. However, with the PHEV exemption set to expire in 2025, it’s crucial to act soon if you plan to take advantage of this tax break for plug-in hybrid vehicles.
If you have any questions about how the FBT exemption works or how it might apply to your business or personal situation, don’t hesitate to reach out to the team at The Hrkac Group for advice and assistance. Contact us today via our online booking form or call our Geelong office on (03) 5224 2366 to schedule a consultation and take the next step towards a healthier financial future.
When it comes to home ownership, one of the most significant financial decisions you’ll make is choosing the right home loan. Whether you’re buying your first property, upgrading your current home, or investing in a rental, your choice between a fixed or variable home loan can greatly influence your financial journey. In this post, we’ll explore the differences between fixed and variable interest rate home loans, discuss the pros and cons of each, and provide guidance to help you decide which option best suits your needs.
Understanding Home Loans
A home loan is more than just a way to finance the purchase of a property; it’s a tool that can help you build wealth over time. At the heart of most home loans lies the interest rate—the cost you pay for borrowing money. When you take out a home loan, you generally have two interest rate options:
- Fixed Interest Rate: The interest rate is locked in for a specified period, typically between one and ten years. During this fixed term, your interest rate and your monthly repayments remain constant.
- Variable Interest Rate: The interest rate on your loan can change at any time, depending on market conditions and decisions made by the Reserve Bank of Australia (RBA). This means your repayments may fluctuate over time.
The type of interest rate you choose is a key factor in determining your overall loan costs and repayment amounts. Let’s take a closer look at each option.
Fixed Rate Home Loans
What Is a Fixed Rate Home Loan?
A fixed rate home loan allows you to lock in your interest rate for a predetermined period. This period can range from as little as one year to as long as ten years, depending on your lender and your needs. Once the fixed term begins, your interest rate remains unchanged until the period expires.
Advantages of Fixed Rate Home Loans
- Budgeting and Predictability: One of the main benefits of a fixed rate home loan is that it provides stability. You know exactly what your monthly repayments will be throughout the fixed period. This makes it easier to budget and plan your finances, as you won’t have to worry about unexpected increases in repayments due to rising interest rates.
- Protection Against Interest Rate Rises: If market conditions suggest that interest rates are likely to increase, a fixed rate loan can protect you from these hikes. You can enjoy the peace of mind knowing your rate is locked in, even if variable rates rise during your fixed term.
Disadvantages of Fixed Rate Home Loans
- Limited Flexibility: Fixed rate loans often come with fewer features than variable rate loans. For example, you might not be able to access additional funds through a redraw facility during the fixed term. If you have an unexpected expense or an opportunity to make extra repayments, a fixed rate loan might not offer the flexibility you need.
- Potential Cost of Break Fees: If you decide to pay off or refinance your home loan before the end of the fixed term, you may incur break costs. These fees can be significant and may offset the benefits of switching to a better rate or paying off the loan early.
- Missing Out on Lower Rates: While a fixed rate loan protects you from increases, it also means you won’t benefit if variable rates decrease during your fixed period. You’re committed to the locked-in rate, regardless of market improvements.
Locking in Your Fixed Rate
When applying for a fixed rate loan, you might find an attractive deal that fits your budget. However, it’s important to note that the fixed rate applied at settlement is based on the lender’s offer on that day, not at the time of your application. Some lenders offer a “lock rate” option, where you can secure the rate by paying a fee before settlement. Discuss these options with your lender to understand what works best for you.
Variable Rate Home Loans
What Is a Variable Rate Home Loan?
Variable rate home loans offer a more dynamic approach to interest rates. Instead of locking in a rate, the interest rate on a variable loan can change over time. These changes are influenced by a variety of factors, including decisions by the Reserve Bank of Australia, economic conditions, and changes in the market.
Advantages of Variable Rate Home Loans
- Flexibility: One of the biggest advantages of a variable rate home loan is its flexibility. Many variable loans come with features that allow you to make extra repayments, which can help you pay off your loan faster. Additionally, many variable loans offer offset accounts that reduce the amount of interest you pay by offsetting your loan balance against your savings.
- Potential for Lower Rates: If market conditions cause interest rates to fall, your variable rate loan will reflect these decreases, potentially lowering your monthly repayments. This can be a significant benefit if you’re comfortable with some degree of uncertainty.
Disadvantages of Variable Rate Home Loans
- Uncertainty and Fluctuating Repayments: The main drawback of a variable rate loan is that your interest rate can change at any time. This means that your repayments might increase if rates go up, which could impact your monthly budget. It’s important to assess whether you can afford higher repayments should rates rise.
- Limited Predictability: Because the rate is variable, it can be challenging to plan long-term budgets. The unpredictability of the interest rate might not be ideal if you prefer the certainty of fixed repayments.
Fixed vs Variable: Which One Is Right for You?
Deciding between a fixed and variable home loan largely depends on your personal circumstances, financial goals, and risk tolerance. Here are some questions to help you decide:
- Budget Stability: Do you prefer the predictability of knowing exactly what your repayments will be? If so, a fixed rate loan might be the better choice.
- Flexibility Needs: Do you value flexibility and the ability to make additional repayments or access extra funds through a redraw facility? A variable rate loan may suit you better.
- Risk Tolerance: Are you comfortable with the possibility of fluctuating repayments? If you’re prepared to ride out potential increases in interest rates in exchange for the possibility of lower payments when rates drop, a variable loan could be advantageous.
- Market Conditions: Consider the current economic climate. If rates are expected to rise, locking in a fixed rate can provide security. Conversely, if rates are expected to remain stable or decrease, a variable rate may offer cost savings.
It’s also worth noting that some borrowers choose to split their home loan into both fixed and variable portions. This hybrid approach allows you to enjoy the benefits of both options—locking in a portion of your loan for stability, while leaving the remainder flexible to take advantage of potential rate decreases.
Splitting Your Loan: A Balanced Approach
What Does It Mean to Split Your Loan?
Splitting your home loan means dividing your loan amount into two parts: one that operates at a fixed interest rate and another that operates at a variable rate. This approach allows you to hedge against market fluctuations by ensuring that a portion of your repayments remains consistent while potentially benefiting from any decreases in variable rates.
Benefits of a Split Loan
- Risk Management: By having part of your loan fixed, you reduce the risk of a dramatic increase in repayments if variable rates rise.
- Flexibility: The variable portion still allows you to take advantage of lower rates if they occur, providing some financial flexibility.
- Tailored Financial Strategy: Splitting your loan can be customized to match your specific financial situation. You might opt for a 50:50 split, or another ratio that reflects your comfort level with risk and your budget requirements.
Before deciding on a split, it’s crucial to discuss your options with your lender or a financial advisor. They can help you determine the ideal balance that aligns with your financial goals and risk appetite.
How to Choose the Right Option for You
Choosing between fixed and variable home loans is a highly individual decision. Here are some steps to help you make an informed choice:
- Assess Your Financial Situation: Consider your current income, future earning potential, and overall financial stability. Are you in a position to absorb potential increases in repayments, or do you need the certainty of fixed payments?
- Evaluate Your Goals: Are you planning to stay in your property for a long time, or is this a short-term investment? Your long-term goals can influence whether a fixed or variable rate is more appropriate.
- Understand the Market: Keep an eye on economic indicators, such as the Reserve Bank of Australia’s monetary policy decisions. These can provide insight into the direction of interest rates.
- Consult Experts: Home loans can be complex, and the best way to ensure you’re making the right choice is to speak with a Home Loan Specialist. The Hrkac Group’s experts are here to provide tailored advice based on your unique situation.
Choosing the right home loan is a crucial step in securing your financial future. Whether you opt for a fixed or variable interest rate home loan depends on your personal preferences, financial stability, and risk tolerance. Fixed rate loans offer the comfort of predictable repayments and budget stability, while variable rate loans provide flexibility and the potential to benefit from falling interest rates.
If you’re unsure which option is best for you, consider splitting your home loan between fixed and variable components. This balanced approach allows you to enjoy the advantages of both loan types while mitigating the risks associated with market fluctuations.
Ultimately, the decision should align with your long-term financial goals and lifestyle. It’s important to remember that both fixed and variable home loans come with their own set of benefits and drawbacks. By understanding these differences and evaluating your own needs, you can make a well-informed choice that supports your wealth creation journey.
If you have any questions or need further guidance, our Home Loan Specialists at The Hrkac Group are here to help. The expertise and experience of our Geelong Mortgage Broking team can help you with your home loan, whether it’s securing a new interest rate for you, refinancing your current loan, or discussing the finance of an investment property. Reach out today to discuss your options and take the next step toward a more secure financial future. To make an appointment to meet with one of our friendly Geelong Mortgage Brokers, contact us via email or phone (03) 5224 2366.
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As Donald Trump secures another term as President of the United States, Australia faces a complex array of potential impacts. Trump’s policies and leadership style, characterised by unpredictability and a strong focus on American interests, could influence Australia in several key areas:
Trade and Economy
Trump’s approach to trade, particularly his use of tariffs, could have significant implications for Australia. During his first term, Trump imposed tariffs on various imports to protect American industries. If he implements similar measures again, Australia might need to navigate new trade barriers. Additionally, a potential trade war between the US and China could disrupt global markets, affecting Australia’s economy due to its strong trade ties with both nations.
Australia’s export sectors, such as agriculture and mining, could be particularly vulnerable to any new tariffs or trade restrictions. The US is a significant market for Australian goods, and any changes in trade policy could impact Australian businesses and workers. Furthermore, the uncertainty surrounding global trade policies might lead to market volatility, affecting investment and economic growth in Australia.
Foreign Policy and Security
Australia’s strategic alliance with the US, particularly through the AUKUS partnership, is likely to continue. However, Trump’s foreign policy, especially towards China, could create challenges. His administration’s hawkish stance on China might force Australia to balance its diplomatic relations carefully. Moreover, any shifts in US support for global conflicts, such as the war in Ukraine, could pressure Australia to increase its own contributions.
The Indo-Pacific region, where Australia plays a crucial role, could see heightened tensions under a Trump presidency. Australia’s defence and security policies might need to adapt to a more assertive US stance in the region. This could involve increased military cooperation with the US, as well as greater investment in defence capabilities to ensure regional stability.
Climate Policy
Trump’s stance on climate change, including his intention to withdraw from international agreements like the Paris Accord, contrasts sharply with Australia’s current climate policies. This divergence could strain the bilateral relationship, particularly as Australia seeks to advance its own climate initiatives. Trump’s focus on boosting fossil fuel production may also impact global energy markets, influencing Australia’s energy sector.
Australia’s commitment to reducing carbon emissions and transitioning to renewable energy sources might face challenges if the US under Trump prioritizes fossil fuels. This could affect international climate negotiations and Australia’s ability to meet its climate targets. Additionally, Australian businesses involved in renewable energy might find it harder to compete in a global market influenced by US energy policies.
Diplomatic Relations
Managing diplomatic relations with a Trump administration could be delicate. Australia’s current ambassador to the US, Kevin Rudd, has previously had contentious interactions with Trump, which might complicate diplomatic efforts. Ensuring strong communication and cooperation will be crucial for maintaining a stable and productive relationship.
Australia’s diplomatic strategy may need to focus on finding common ground with the Trump administration on key issues while advocating for its own interests. This could involve leveraging Australia’s role in international organisations and multilateral forums to build alliances and promote its policy objectives.
Conclusion
A Trump presidency presents both challenges and opportunities for Australia. Navigating trade policies, maintaining strategic alliances, addressing climate policy differences, and managing diplomatic relations will require careful and strategic planning. As global dynamics evolve, Australia’s ability to adapt and respond to these changes will be key to sustaining its interests and partnerships on the international stage.
Australia’s response to a Trump presidency will need to be multifaceted, involving economic, diplomatic, and social strategies to ensure that it can effectively manage the impacts and continue to thrive in a changing global environment.
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.
Superannuation is an important part of employees’ retirement plans, but ensuring contributions are paid on time has often been a complex affair. In response to these challenges, the Australian Government has announced significant changes affecting how and when employers pay superannuation contributions.
Starting from 1 July 2026, employers will be required to pay their employees’ superannuation at the same time as their salary and wages. This move, known as Payday Superannuation, aims to streamline the process and make it easier for employees to receive their superannuation contributions on time. In this blog, we’ll walk you through what these changes mean for both employers and employees and how you can prepare for the transition.
What is Payday Superannuation?
Payday Superannuation is a reform set to take effect from 1 July 2026, which mandates that employers must pay superannuation guarantee (SG) contributions at the same time they pay employee wages. This means no more delays between when employees are paid and when their super is contributed to their super funds.
As of now, employers are required to pay superannuation at least quarterly, and there’s no requirement to pay it with the employee’s salary and wages. However, this new reform will align the timing of super contributions with employees’ payday, ensuring they receive their super on time, every time.
Why Is Payday Superannuation Being Introduced?
The introduction of payday superannuation is aimed at addressing concerns about delayed super contributions. The current quarterly payment system can lead to delays, with employees sometimes waiting months for their superannuation payments to reach their accounts.
By requiring employers to pay super at the same time as salaries, the government aims to ensure that employees are not left waiting for their retirement savings. This change will also simplify the process for employers, who will no longer have to track quarterly deadlines or deal with complex payment systems.
Key Changes to Expect
1. Paying Super at the Same Time as Salary and Wages: From 1 July 2026, employers will be required to pay superannuation contributions alongside salary and wages. Each time an employer pays ordinary time earnings (OTE) to an employee, there will be a new “due date” for contributions. Employers will need to ensure that the superannuation payments are made to the employee’s super fund within 7 days of payday.
2. Super Guarantee Charge (SGC): If an employer fails to make the superannuation contributions on time, they will be liable for the Super Guarantee Charge (SGC). The SGC is a penalty imposed on employers for late payments, and it includes:
- Outstanding SG shortfall: This is the amount of super that wasn’t paid on time, calculated based on the employee’s OTE.
- Notional earnings: This is an interest component that compensates the employee for the delay in receiving their super contributions.
- Administrative uplift: This fee is charged to reflect the cost of enforcing superannuation compliance.
Employers will also face interest and further penalties if the SGC is not paid in full by the due date. Fortunately, the SGC will be tax-deductible, which means the tax implications of paying super on time will be consistent with the rest of a business’s financial obligations.
3. Retirement of the Small Business Superannuation Clearing House (SBSCH): The SBSCH, which currently helps small businesses manage their superannuation payments, will be decommissioned by 1 July 2026. In its place, businesses will be encouraged to use more modern and efficient payroll software solutions. These new systems will make it easier for employers to pay super contributions on time and accurately.
4. Updated SuperStream Standards: To improve the flow of superannuation payments, the government is updating the SuperStream system. Super funds will now have just 3 business days to allocate or return contributions, down from the previous 20 business days. This change will ensure faster processing and fewer delays in the superannuation system.
5. STP Reporting Changes: Employers will need to report both the employee’s ordinary time earnings and total super liability through Single Touch Payroll (STP). This means that superannuation contributions will be reported directly to the Australian Taxation Office (ATO) in real-time, ensuring the super is tracked and identified correctly.
How Will This Affect Employers?
For employers, these changes will require significant adjustments to payroll systems and processes. Here’s how you can prepare:
1. Adopt New Payroll Software: With the SBSCH being retired, it will be important for employers, especially small businesses, to switch to more advanced payroll software. These systems will integrate with SuperStream and ensure super is paid on time.
2. Plan for Payment on Payday: Employers will need to adjust their payroll schedules to ensure that superannuation contributions are paid every time an employee is paid. This change may affect cash flow and will require businesses to review their payroll processes.
3. Review Reporting Obligations: Employers will also need to ensure that their reporting under Single Touch Payroll (STP) includes the necessary details about superannuation contributions. This may involve working with payroll providers to ensure accurate reporting.
4. Keep Track of Due Dates: Each payday will bring a new “due date” for super contributions. Employers will need to make sure that contributions are received by the superannuation fund within 7 days of payday, or they may face penalties.
5. Budget for Potential Costs: Failure to meet the new obligations may result in financial penalties and additional costs. Employers should factor these potential costs into their budgets and ensure they comply with the new rules to avoid unnecessary charges.
How Will This Affect Employees?
Payday superannuation will benefit employees as they will no longer have to wait months for super contributions to be deposited into their accounts. Here’s how employees will benefit:
1. Faster Super Payments: Employees will receive their super contributions on the same day as their pay, ensuring they have timely access to their retirement savings.
2. Clearer Records: Employees will be able to track their superannuation contributions more easily since they will be paid with each salary or wage payment, making it simpler to monitor their retirement savings.
3. More Consistent Contributions: Employees can expect more consistent super contributions, which may lead to better retirement outcomes over time.
Preparing for Payday Superannuation
The move to payday superannuation is a positive step towards improving the superannuation system for both employers and employees. While there will be some changes and new responsibilities for employers, the ultimate goal is to make superannuation contributions more timely, accurate, and transparent.
Employers should start preparing now by adopting modern payroll software, ensuring they understand their reporting obligations under STP, and planning for the transition. Employees can look forward to more timely and consistent super contributions, making it easier to save for the future.
The transition to payday superannuation may seem challenging at first, but with proper planning and the right tools, businesses can navigate these changes smoothly and avoid unnecessary penalties.
If you have any questions or need assistance in understanding how payday superannuation will impact your business, don’t hesitate to reach out to us at The Hrkac Group. We’re here to help you make sense of the new regulations and ensure that you stay compliant with the upcoming changes. Contact us today via our online booking form or call our Geelong office on (03) 5224 2366 to schedule a consultation and take the next step towards a healthier financial future.
The Hrkac Group is a full-service Geelong firm providing integrated Accounting, Financial Planning, Mortgage Broking, Business Advisory, Conveyancing and outsourced Bookkeeping under one roof to help individuals and businesses manage and grow their wealth.
When planning for retirement, one of the key considerations is ensuring a steady income stream to support your lifestyle. Annuities can be an effective solution for this. But what exactly is an annuity, and how can it benefit you?
What is an Annuity?
An annuity is a financial product that provides a series of regular payments in exchange for a lump sum investment. These payments can be made for a specified period or for the rest of your life, depending on the type of annuity you choose. Essentially, an annuity converts your superannuation savings or other investments into a predictable income stream.
Types of Annuities
- Fixed Term Annuities: These provide payments for a set period, such as 10 or 20 years. The amount you receive is predetermined and does not change, unless indexed, offering certainty and stability.
- Lifetime Annuities: These provide payments for the rest of your life, regardless of how long you live. This can be particularly beneficial for those concerned about outliving their savings.
- Indexed Annuities: These adjust payments in line with inflation, helping to maintain your purchasing power over time.
- Market Linked Annuities: New types of annuities offer an opportunity to participate in an increased income because of positive investment returns. However, payments may be less predictable than other types of annuities.
- Deferred Annuities: These start payments at a future date, allowing your investment to grow in the meantime.
Benefits of Annuities
- Guaranteed Income: Annuities offer a reliable income stream, which can help cover your living expenses in retirement.
- Peace of Mind: Knowing you have a guaranteed income can reduce financial stress and help you enjoy your retirement.
- Tax Advantages: In Australia, the income from annuities purchased with superannuation money is generally tax-free if you are over 60. Annuities purchased with non-superannuation money can also deliver a favourable tax treatment.
- Social Security: Several types of annuities are very favourably assessed under both the assets and income tests for the Australian age pension.
Considerations
- Inflation Risk: Annuities that do not adjust for inflation can erode your purchasing power over time.
- Fees and Charges: Be aware of any fees associated with purchasing an annuity. These are embedded in the income quoted and can impact your overall returns.
- Flexibility: Annuities are generally less flexible than other investment options, as your money may be locked in once you purchase the product.
Is an Annuity Right for You?
Annuities can be a valuable part of a diversified retirement strategy, providing stability and peace of mind. However, they may not be suitable for everyone. It’s important to consider your individual financial situation, retirement goals, and risk tolerance. Consulting with a financial advisor can help you determine if an annuity is the right choice for you.
The content within this blog has been sourced from our Licensee, Alliance Wealth’s blog ‘Realise Your Dream’.
https://blog.centrepointalliance.com.au/realiseyourdream/what-is-an-annuity
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 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.
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.
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.
