EARLY PLANNING, THE KEY TO AGED CARE CHOICE
Early planning is definitely the key when considering aged care at home or a residential aged care facility.
These days there are Home Care Packages available that provide access to services that can help you to stay at your own home for as long as you can. Support services include cleaning, meal preparation and transport for shopping and appointments.
However, depending on your dependency for assistance you may need to consider an Aged Care Facility. Aged care facilities provide accommodation and care depending on your personal needs. Care can range from personal care, such as help with showering and occasional nursing care to continuous nursing care for those who are unable to look after themselves.
Many residential care facilities have significant waitlists and this is one reason it is vital to plan early.
You should visit a few that appeal to you, along with family members. Becoming familiar with your options can enable you to have meaningful conversations regarding your options and make more informed lifestyle and financial decisions.
When you move into an Aged Care Facility an accommodation payment will be payable. This can be paid as a lump sum, in regular instalments, or a combination of a lump sum and regular instalments.
This amount will vary between facilities and as a general rule will be higher for newer places. There will also be ongoing aged care fees and your living expenses.
A financial planner can help you minimise the fees you may have to pay and/or maximise governments benefits you may receive. They can also determine whether care in your preferred facility is affordable, and potentially start restructuring your assets to improve your financial position. A financial planner can also help address your estate planning needs.
For more information please contact me via this page to arrange a FREE 30 minute consultation. https://amandamccall.com.au/contact-financial-services-brisbane
STREAMLINING TAX TIME
Do you get to 30 June every year and ask yourself why are you so unprepared for tax time? Especially if you are a small business owner and have been focusing on your business, you possibly don’t know where to start.
Here are a couple of tips to implement for next year to minimise stress and increase your tax return.
1. GET ORGANISED AND IMPLEMENT GOOD RECORD KEEPING
Poor record keeping costs Australian businesses thousands of dollars each year.
Let’s put some systems and processes in place to avoid this happening again next year. The trick is not to see tax and tax returns as a once a year event but make them part of your regular business administration.
You may have a bookkeeper and/or an accountant for your tax needs, but you still need to be able to keep them informed of changes in circumstances, and understand if any changes to the tax rules apply to you or things you can claim.
The Australian Tax Office have a range of apps and online tools to assist small businesses with good record keeping. The ‘My Deductions’ allows you to record your receipts as they come in rather than keeping the old shoe box full of faded dockets.
Don’t forget to include things that don’t typically have a receipt such as home office usage and equipment – If you use part of your home as an office you will need to keep a log of the time, space and items which are used for business.
2. GET ADVICE BEFORE 30 JUNE
It is too late to start thinking about minimising your tax bill in July or August. Each year it can differ however for financial year ending 2018 the big tax deductions included are:
- $20,000 immediate write off for business asset purchases
- Superannuation – Depending on age, business owners may be able to contribute up to $25,000 in super and get a deduction for the contribution.
- Prepaid interest – You can bring forward next year’s interest deduction by paying a lump sum of interest before 30 June.
So definitely worth getting advice on these sort of things prior to 30 June. Mark it in your calendar now for next year.
These tips will get you on the road to good tax planning for 2017/2018 financial year.
THE FEDERAL BUDGET SUPER REFORMS – HOW WILL THEY IMPACT YOU?
From 1 July 2017, a range of super reforms are set to come into play. What are the changes and how will they impact you?
The Australian Government’s office of Treasury, state once implemented, these changes will help to improve the fairness, sustainability, flexibility and integrity of the superannuation system.
They also state that the legislated superannuation changes are only expected to affect 4% of all individuals with superannuation.
If you earn less than $40,000 or are self-employed you will benefit from more flexible super contribution rules. If you are a high income earner or have a large super balance there are new contribution limits and a balance cap that will change how much you can add to your super.
Explained in summary here are the main changes and who they will affect:
LOW INCOME EARNERS
Those earning up to $37,000 a year will receive a Low Income Superannuation Tax Offset (LISTO) contribution to their super fund. The LISTO contribution will be equal to 15% of their total pre-tax super contributions for an income year, capped at $500.
Individuals with a total superannuation balance of less than $500,000 just before the beginning of a financial year can carry-forward unused concessional cap space (for up to 5 years) to use if they have the capacity and choose to do so.
HIGH INCOME EARNERS
Anyone earning more than $250,000 a year will have their concessional superannuation contributions taxed at 30% (this was $300,000 previously)
RETIREES OR THOSE APPROACHING RETIREMENT
From 1 July 2017, the amount of money a person can transfer into their superannuation account during the retirement phase will be capped at $1.6million.
Individuals under the age of 65 - as well as those aged 65 to 74 - who meet the work test, will be able to claim a tax deduction for personal contributions to eligible superannuation funds up to the concessional contributions cap.
ANTI-DETRIMENT RULE NOW ABOLISHED
Under this new law, a super fund will not be able to pay a refund of a member’s lifetime superannuation contributions tax payments into a deceased estate. Likewise, the super fund will not be able to claim a tax deduction for this payment.
There is quite a lot of information and we have only provided a snippet here. Remember, it is imperative that you speak to your financial adviser before making any decisions regarding your super and your financial future.
FINANCIAL SECURITY FOR THE SELF EMPLOYED AND CONTRACTORS
The trend of more flexible work arrangements is becoming increasingly popular as more people work as contractors rather than employees.
The benefits include building a wide range of skills, flexibility around children or allowing time to travel. The downside includes no superannuation, annual leave and sick leave and no consistency of income.
Here are a few tips to ensure you make the most of your contracting dollar:
1. BUILDING A CASH BUFFER
Building and maintaining a cash buffer is critical as a contractor. It is a good idea to have about 3 - 6 months wage up your sleeve. This may seem like a lot and hard to achieve. One step at a time. Work towards it as it will give you peace of mind should you be faced with the unexpected.
2. MAKE SURE YOU ARE PAID WHAT YOU ARE WORTH
Ensure your hourly rate covers an allowance for holidays, sick leave and superannuation. Have you researched your going rate in the industry? Know your minimum fall back position in pay negotiations - know whether to accept a less than ideal contract or walk away.
3. MAKE THE MOST OF TAX DEDUCTIONS
Keeping receipts for home office supplies or for a laptop that you need for work may be a valid tax deduction. Depending upon how you are paid and where you regularly work, some of your travel costs may even be tax deductible. Have a chat to your accountant or consult the ATO website for the range of costs that might be tax deductible to you.
4. KEEP NETWORKS & SKILLS FRESH
It will be your responsibility to invest your own money in the occasional course to make sure you are up-to-date. LinkedIn (like it or hate it) has made the job of keeping in touch and extending your professional network much more straightforward. LinkedIn allows you to stay connected with colleagues and associates long after they leave their current employer.
Contracting, like any form of self-employment has its ups and downs. The flexibility and freedom does come with some barriers and uncertainty, but that doesn’t mean you have to forego your financial security and independence. Some things that are worth going after, may take a little more work and planning.
EXTEND YOUR SUPER
Are you looking at your Super balance and becoming a little nervous as to whether it will be enough? There are a few things you can do to ensure you make the most of your Super.
1. REVIEW YOUR SUPER FUND
Conduct a review of your Super Fund, ensure it has low fees and a solid history of strong returns. Most funds offer life insurance, total and permanent disability cover and income protection. Firstly check that your super policy does offer these options. Generally, buying this insurance through your super fund can be cheaper and premiums are deducted from your super account.
2. SALARY SACRIFICE
While you are still employed, make extra contributions through salary sacrifice. This means giving up some of your pre tax pay and putting it into your super. This saves you on tax as monies going into Super are only taxed at 15%.
3. CONSIDER A TRANSITION TO RETIREMENT STRATEGY
If you are still working and keen to do so for the time being this kind of strategy can help you ease into retirement. You can us some of your Super as an income stream. This can also have tax benefits.
4. GOVERNMENT ENTITLEMENTS
Do the research and find out what you are entitled to as it will affect the amount of Super you need to draw on to supplement your income.
5. KEEP UP TO DATE WITH CHANGES
Ensure you keep up to date with changes to laws affecting your Super or government entitlements. The federal government recently passed significant changes to superannuation. You can read more about these changes here http://www.treasury.gov.au/Policy-Topics/SuperannuationAndRetirement/Superannuation-Reforms