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2019/20 Federal Budget Highlights

With a bit over a month to go until the Federal Election, it’s unsurprising that the announcements centred on election-friendly promises such as tax cuts and increased funding to healthcare, aged care services and infrastructure.
Federal Budget 2

The key take-outs to be aware of include:
  • • immediate tax cuts for low-to-middle income earners to help ease the cost of living, and lowering the 32.5% tax rate to 30% from 1 July 2024
    • the ability for people aged 65 – 66 to contribute to super without meeting the work test requirements from 1 July 2020
    • an increase to the age limit for spouse contributions, from 69 to 74 from 1 July 2020
    • a significant increase to funding for health and aged care services.

Finally, it’s important to remember that the Budget announcements are still only proposals at this stage. Each of the proposals must be passed by Parliament before they’re legislated.
The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. Highlights of relevance to our clients include:

1. Personal Income Tax Cuts

The Government has announced it will extend the personal income tax cuts that were announced in last year’s Federal Budget. This is proposed to be achieved as follows:

From 1 July 2018 to 30 June 2022

increase of the Low and Middle Income Tax Offset (LMITO) from a maximum of $530 to $1,080 ($2,160 for dual income families) and this can be claimed in your 2018/2019 tax return.

From 1 July 2022
    • • the upper threshold for the 19% tax bracket will increase from $41,000 to $45,000, and
      • the LITO maximum amount will increase from $645 to $700. The increased LITO will be withdrawn at a rate of 5 cents per dollar between taxable incomes of $37,500 and $45,000.
      • LITO will then be withdrawn at a rate of 1.5 cents per dollar between taxable incomes of $45,000 and $66,667.
From 1 July 2024

the 32.5% marginal tax rate will be reduced to 30%. The 37% tax bracket will also be abolished as per the Government’s already legislated plan.

Federal Budget 12. Increasing the Medicare Levy thresholds (Effective 01.07.2018)

This will be increased slightly, resulting in less Medicare Levy payable

3. Small & Medium Business – Increased access to the instant asset write-off (Effective 02.04.19 – 30.06.2020)

This means businesses with a turnover of less than $5 million (small and medium) can immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from Budget night to 30 June 2020.
The $30,000 threshold applies on a per asset basis. This means eligible businesses can instantly write off multiple assets.

 

Federal Budget 3

4. Superannuation

No work test for voluntary contributions extended to age 66 (Effective 01.07.2020)
The Government will amend superannuation contribution rules to allow people aged 65 and 66 to make voluntary contributions to superannuation without meeting the work test.
Under current legislation, for a client aged 65-74 to be eligible to a make a voluntary
superannuation contribution they must have already satisfied the work test during the financial year the contribution is made.

The work test is satisfied where a client has been gainfully employed for 40 hours in a period of 30 consecutive days during the financial year. Alternatively, from 1 July 2019 clients may instead satisfy the work test exemption to make voluntary contributions.

 Bring-forward rule extended to age 66 (Effective 01.07.2020)
People age under 67 at any time during a financial year will be able to trigger the non-concessional bring-forward rule. Currently, clients must be under age 65 at any time during a financial year to trigger the bring-forward rule. The bring forward rule allows client to make up to three years’ worth of non-concessional contributions, which are capped at $100,000 a year, to their superannuation fund in a single year.

5. Social Security

Energy Assistance Payment (Effective 30.06.2019)
Social security recipients will receive a once-off Energy Assistance Payment by the end of the current financial year. The payment will be $75 for singles and $125 for couples combined and will be exempt from income tax.

6. Aged Care

Increased funding for aged care
The Government will provide $724.8 million over five years from 2018-19 to fund improvements in residential and home care services.

Extension of Commonwealth Home Support Programme
The Government will provide $5.9 billion to extend the Commonwealth Home Support Programme (CHSP) funding arrangements.

The CHSP contributes to essential home support services, such as meals (Meals on Wheels), personal care, nursing, domestic assistance, home maintenance, and community transport, to assist older people to keep living independently in their own home.

Comprehensive analytics and research

We invest a great deal of time and effort researching the best tax effective investment strategies for our clients. We have developed a number of systems to manage and track the marketplace.
The investment landscape always evolves and it is more important than ever to consider your investments and superannuation funds carefully. We pride ourselves on being experts in researching opportunities, investments and strategies that fit in with your retirement goals. We want, our clients to get on with enjoying their life rather than worrying about money.
For an obligation free conversation about your financial future, please contact us on 03 9190 8964 or at advice@endorphinwealth.com.au

What our Clients Say

  • Rob has been our advisor for around 6 months now and to say we’ve been happy with his service is a huge understatement. His attention to detail, responsiveness and general customer service are exceptional. We’re now on the path to a much brighter retirement and hopefully reaching it a few years earlier too!

    - Luke Fleming

  • Glenn Malkiewicz has been a great help in setting up my finances for post retirement. He explained everything clearly in words I could understand and answered my questions promptly and succinctly. I now feel very comfortable about my future going forward. His friendly manner makes him a pleasure to work with. I look forward to consulting with him in the future.

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  • 5 Stars to Rob Rich. Fantastic to work with, caring nature and a Human with a gold heart. Highly recommended.

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  • Phillip and the team are completely focused on delivering excellence for their clients.

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  • It was a pleasure to engage Rob to assist with a review of my fiances which included financial modelling of 3 options for my property plans and a review of personal insurances tailored to my needs. He displayed great patience and understanding throughout my journey and gently sent reminders for paperwork he needed without being pushy. He was contactable in person, email, text messages even outside of standard business hours. The plan he produced was not only tailored to me, but his approach and style he adopted was very tailored as well. The future of Financial planning in in safe hands with approaches like Rob’s.

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  • We have been working with Robert since February this year, just prior to the birth of our second child. He has been a pleasure to work with and has provided comprehensive financial advice to us. Robert takes the time to get to know you and your family so that he can fully understand your financial situation and what your plans and goals are for now and into the future. He is extremely knowledgeable and very passionate about his job. He is a great communicator, responds to calls and emails promptly, and displays a genuine interest in our family. I have no hesitation in recommending Robert and Endorphin Wealth Management

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  • Rob Rich has a well-earned reputation for providing articulate and direct financial advice and he has been the consummate professional for me, particularly regarding my superannuation. His intelligent approach and outstanding knowledge has been second to none. He's a great communicator and has done a fantastic job of translating complex financial issues and concepts into terms that are easy to understand. I would certainly recommend Rob and Endorphin for his well considered and practical advice.

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  • Phillip has been my financial advisor for the last few years and I could not be happier. The outstanding retirement planning and financial advice that Phillip provided has put me in the best possible position to enjoy my future with confidence, for which I am extremely grateful.

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  • Phil is attentive and super communicator, great advisor.

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  • Love working with Robert. He is highly skilled, practical and empathetic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.

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  • Phil and the crew are very solid financial planners/advisors and provide excellent customer service.

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  • Great company, wonderful people and a genuine focus on delivering the best for clients.

    - Gavin Tan

  • Great advice. Worth listening to.

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  • Phillip and the team at Endorphin have looked after my financial affairs for a few years now and I could not be happier. They are pro active with communication, experts at investment advice and are friendly and great to deal with. They are my trusted financials professionals. I highly recommend them if you are looking for a financial planning team that will look after you for the future.

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  • Robert Rich is a gun and has been a pleasure to work with, he spent a lot of time asking questions and listening to both my husband and I to get a deep understanding of our current financial situation of who we are and where we want to be. His advice has been comprehensive and easy to understand. The genuine interest and enthusiasm he has demonstrated has made the whole experience to date, fun and engaging (it has also been awesome to see some great financial results!). Rob is a great communicator and is always available to chat, meet up or respond to an email. We wish we had seen Rob earlier, and plan to have him as our advisor now and into the future, I have and will continue to recommend him and his services.

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  • Rob has been fantastic helping us set all our financials in order. We didn't want to have to worry about any of this stuff day to day. Rob put together a set and forget strategy that will see us in good shape for the future. Good guy, good advice, great help. Thanks again Rob

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  • My husband and I had a wonderful experience with Rob. He is genuine and honest. He has done amazing things with our finances to ensure our future is set up the right way. He has gone above and beyond our expectations. I highly recommend Rob, he is an expert in his field.

    - Anthea Husing

  • love working with Robert. He is highly skilled, practical and empathic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.

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    - A. Miles

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  • Rob has been helping me with my finances for just over 12 months now and i couldn't be happy, he is a wealth of knowledge and is amazing at what he does.

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    - Jon Sutton

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  • Your knowledge of the financial market is up to date and your approach to my portfolio has been proactive

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  • The plan has definitely made a big difference to my lifestyle

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  • They provided me with a sense of direction and security that I did not have previously

    - Michelle C