Another financial year has drawn to a close and there are some changes that now come into effect that might impact you and your money. Some of the highlights are as follows:
Changes on the Superannuation front:
- Exit fees have now been banned so it is cheaper to change superannuation funds
- Low balance funds will be transferred to the ATO. A low balance fund is one where you haven’t contributed to your account or engaged with your fund in the past 16 months, and has a balance of less than $6000.
- If you have a small, active super account with a balance of $6,000 or less at the end of a financial year, your fees will be capped at 3% per annum.
- The insurance changes outlined in my last newsletter have been enacted. This means that any fund to which you have not contributed in the last 16 months will have had its insurance cancelled, unless you have opted in to keep that insurance directly with your superannuation company.
- Changes to the ‘work test’, regarding contributions to superannuation after age 65. There is now a one-year exemption from the ‘work test’ which applies only to recent retirees. This exemption is only available: (1) in the financial year following the year the person last met the ‘work test’, (2) to those with a ‘total super balance’ of less than $300,000 as at the prior 30 June, and (3) to be applied only once in an individual’s lifetime. This change might provide additional opportunities to contribute to super post retirement.
Changes on the tax front:
- The Low and Middle Income Tax Offset has come into effect which means if you earn up to $126,000 a year you will get up to $1080 back when you lodge your tax return.
- There will be further changes but these will not occur until 2022-23 and the third and final change in 2024-25.
Let me know if you would like to discuss any of these changes.
This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.