Profile Blog - Category ‘Uncategorised’

The Value of Advice

A recent study by Fidelity International, titled The Value of Advice, proves once again that issues related to financial stress adversely affects the health and overall wellbeing of many Australians. It also showed that few do much about it and this lack of action is regardless of their financial situation. For example, the study found that more than 65 per cent of Australians worry about money at least monthly and this includes a significant number of respondents with at least A$1 million of investable assets.

2,228 individual Australians were surveyed, 594 retirees and 1,634 non-retirees. 502 are currently advised, 570 were previously advised, and 1,156 were unadvised.

Fidelity International’s Australian managing director, Alva Devoy, considers it surprising that “many people don’t ‘join the dots’ and realise that addressing financial issues is a step towards improving overall wellbeing”.

Despite studies of this ilk there is still a disconnect in the public’s mind between financial wellbeing and overall wellbeing. A disconnect that prevents many from addressing issues related to their finances when such help is readily available.

On the other hand, the study found that 88.5% of Australians receiving advice believe it has given them greater peace of mind financially. 86.2% believe it has given them greater control over their financial situation also.

“More than three-quarters (77.3%) of Australians have seen their GP to address personal wellbeing issues, and more than a third (35 per cent) have been to see a mental health professional for the same reason,” the report said.

However, only 24.4% indicated they had seen a financial planner to address financial worries even though financial stress is something that relates to a whole lifetime. Of these 24.4%, 49.9% say their mental health has benefited; 37.8% say their family life has improved; and 18.1% say their health has improved.

An added irony. Past PlannerWeb articles, based on research from Vanguard Investments, has shown that the overall improvement in a person’s financial position can be around 3% from professional financial help. The irony being that this is arguably enough to pay for the financial service itself as well as helping improve a client’s overall wellbeing.

For many it is time to look beyond the surface of financial planning and get professional assistance with building your financial future.

Peter Graham BEc MBA

General Manager

PlannerWeb

For some employees, sacrificing part or all of their salary to a complying superannuation fund is a great way to boost retirement savings. But two recent changes may affect your obligations as their employer.

18 February 2020

These changes, effective from 1 January 2020, relate to how you work out your superannuation guarantee (SG) obligations when an employee makes super contributions by salary sacraficing.

The changes are:

  1. The amount your employee sacrifices into super no longer counts towards the amount of SG you are required to pay for them.
  2. The amount of SG you must pay is 9.5% of:
    • your employee’s ordinary time earnings (OTE) which is the amount they are paid based on ordinary hours of work, and
    • the amount salary sacrificed from the employee’s OTE to their complying super fund or Retirement Savings Account.

If you haven’t already done so, revisit your agreements with employees to make sure you’re meeting the new rules and paying the right amount of SG. This may include checking and updating your systems to make sure they calculate the SG amount correctly.

You can continue to claim a tax deduction for salary sacrificed super contributions and the sacrificed amounts won’t be subject to fringe benefits tax.

If you have any questions then your accountant, registered tax agents and BAS agents can help.

Find out about:

A new tax scam targeting victims of recent natural disasters has been uncovered by the ATO, all are urged to remain vigilant.

The new SMS scam promises an 8 per cent bonus on 2020 tax return to victims of recent natural disasters by asking people to click on a link.

Instead, the link take people to a fake myGov website designed to steal personal information, including names, addresses, emails, phone numbers and online banking login details.

ATO assistant commissioner Karen Foat said there has been an increase in the number of reports of scammers contacting members of the public pretending to be from the ATO by SMS, email and phone, and that the scammers are becoming increasingly sophisticated.

“Last year, over 15,000 people reported to us that they provided scammers with their personal identifying information,” Ms Foat said.

“Your personal and financial information is like the keys to your identity and your money. Once a scammer has your data, they will either sell it on the black market or use it to impersonate you.

“Armed with your details, scammers can do things like get a loan or commit fraud in your name, access your bank account and shop using your credit card, lodge tax returns or steal your superannuation.”

Ms Foat reiterated that the ATO would never send an email or SMS asking a person to access Online services via a hyperlink.

The ATO will also never ask someone to provide any personal identifying information in order to receive a refund; use aggressive or rude behaviour, or threaten you with immediate arrest, jail or deportation; or request payment of a debt via cardless cash, iTunes or Google Play cards, prepaid Visa cards, cryptocurrency or direct credit to a personal bank account.

“If you or someone you know has fallen victim to a tax-related scam, the best thing to do is call the ATO as soon as you can on 1800 008 540,” Ms Foat said.

Jotham Lian
14 February 2020
accountantsdaily.com.au

The long-awaited superannuation guarantee amnesty bill has now passed both houses, with employers set to get six months to disclose historical non-compliance before tougher penalties apply.

The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has now been passed and is awaiting royal assent.

The SG amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to 31 March 2018.

An employer will not be able to benefit from the amnesty for SG shortfall relating to the quarter starting on 1 April 2018 or subsequent quarters.

It will allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as remove the administrative component and the Part 7 penalty that may otherwise apply in relation to SG non-compliance.

The amnesty period will start from 24 May 2018 and end six months from the date it receives royal assent.

The new legislation will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SG charge payable.

Around 7,000 employers have since come forward to voluntarily disclose historical unpaid super since the amnesty was first announced on 24 May 2018.

Treasury estimates an additional 7,000 employers will come forward during the six-month amnesty period, returning $230 million of superannuation to employees who may have otherwise completely missed out.

Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said the passing of the legislation should not be viewed as giving a free kick to employers who had been previously non-compliant.

“Employers will not be off the hook. To use the amnesty, they must still pay all that is owing to their employees, including the high rate of interest. However, the amnesty will make it easier for workers to secure the super they are owed by not hitting employers with the penalties usually associated with late payment,” said Ms Hume.

“If employers do not take advantage of the amnesty, they will now face significantly higher penalties when they are caught. In addition, throughout the amnesty period the ATO will still continue its usual audit and enforcement activity against employers for historical obligations they do not own up to voluntarily.

“We encourage employers to check they don’t owe outstanding super — and if they do, to take advantage of this once-only opportunity to set things right before much tougher penalties apply.”

Jotham Lian
24 February 2020
accountantsdaily.com.au

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