It's that time of year again.
The Federal Budget 2018-19 was recently announced by treasurer Scott Morrison. With the major shake-up to superannuation and retirement policies occurring in last year’s budget and effective from 1 July 2017, this budget is seeking to restore some confidence and sustainability.
Accompanied by personal income tax cuts and social security amendments, there are still a number of proposals, that if approved by parliament, could impact on your financial strategy.
Key proposals that could impact you:
- Expanding Self Managed Superannuation Fund (SMSF) member limit from four to six members
- Extend from yearly to three yearly audit cycle for some SMSFs from 1 July 2019 with good compliance history
- Removing the work test for Australians aged 65 to 74 to boost their retirement savings by means of voluntary contributions, where an individual’s total superannuation balance is below $300,000
- Life insurance cover in superannuation will be opt-in for those individuals under 25 years of age or with account balances under $6,000. Life insurance cover will also cease where no contributions have been made for a period of 13 months
- Banning of exit fees on all superannuation accounts from 1 July 2019 and cap on passive fees for low member balances
- Requiring superannuation fund trustees to offer Comprehensive Income Products for Retirement
- Increased Pension Work Bonus from $250 to $300 per fortnight
- Amendments to the pension means test rules to encourage the take up of lifetime retirement income products
- Expansion of the Pensions Loan Scheme to allow more Australians to use the equity in their homes to increase their incomes
- Protecting older Australians - the government will provide $22 million over five years from 2017-18 to protect the rights of older Australians
- Providing better access to aged care – An additional 14,000 new high level home care packages over four years from 2018 -18
- Providing better quality of aged care – A new Aged Care Quality and Safety Commission will be established
Proposed Medicare levy increase from 2 per cent to 2.5 per cent, to fund the National Disability Insurance Scheme, will now not go ahead due to increased tax revenues.
From 1 July 2019, payments for goods or services to businesses that exceed $10,000 will no longer be allowed to be paid with cash.
The $20,000 instant asset write off will be extended for a further 12 months.
Are you interested in finding out more about the 2018 Federal Budget?
If you have any queries on how this may impact on your personal financial situation, please contact your Partners Wealth Group advisor today.