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Superannuation The Government has not made any unexpected changes to the superannuation system for the 2020-21 FY. Previously announced COVID-19 measures and the Your Future, Your Super package will continue. COVID-19 RESPONSE PACKAGE  Temporary early access to superannuation  The Government is allowing eligible Australians affected by the financial impacts of COVID-19 to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. The 2020-21 application period for the measure will cease on 31 December 2020. Temporarily reducing superannuation minimum drawdown rates The Government has reduced the superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019-20 and 2020-21 income years.  YOUR FUTURE, YOUR SUPER  Commencing 1 July 2021, the Government will implement reforms to improve outcomes for superannuation fund members. The reforms will reduce the number of duplicate accounts held as a result of changes in employment by "stapling" superfunds to members and prevent new members joining under-performing funds. The Government will require superannuation products to meet an annual performance test. Those that fail will be required to inform members and refer members to the YourSuper comparison tool. Persistently under performing products will be prevented from taking on new members. Super fund trustees will need to ensure decisions are made in the best financial interest of members and provide better information on management and expenditure.PDF VERSION AVAILABLE HERE >>


On Tuesday night, Federal Treasurer Josh Frydenburg delivered the long-awaited 2020-21 Budget, having been deferred from 12 May 2020 due to the COVID-19 pandemic. The budget is firmly focused on supporting Australia’s recovery from the first recession since 1991.

Read on for a round-up of the proposals, and how they might affect your household expenses and financial future, Remember, these are only proposals and could change as legislation passes through parliament.

Personal Income Tax

Bring forward the Personal Income Tax Plan and retain the low and middle income tax offset.

The government is proposing to retrospectively start the personal income tax cuts from 1 July 2020, that were due to start from 1 July 2022. The Low and Middle Income Tax Offset (LMITO) will be retained until 30 June 2021. The increase in the Low Income Tax Offset (LITO) from $445 to $700 is also proposed to be brought forward. The changes are intended to provide immediate tax relief to individuals and support the economic recovery by boosting consumption and therefore increasing jobs, by providing around $17.8 billion in tax relief.

  • The tax cuts already legislated to commence from 1 July 2024 remain unchanged
  • The upper threshold of the 19% tax bracket will rise from $37,000 to $45,000 and the upper threshold of the 32.5% tax bracket will rise from $90,000 to $120,000. This will be worth the equivalent of around $41 a week to those earning between $50,000 and $90,000 a year, and about $49 a week to those earning more than $120,000 a year.

Housing Affordability

The government will allow an additional 10,000 first home buyers to obtain a loan to build a new home or purchase a newly built home with a deposit of as little as 5% under the existing First Home Loan Deposit Scheme. Applications, which are made through participating lenders, will be available until 30 June 2021.Eligible first home buyers may also be able to take advantage of the First Home Super Saver Scheme to use the concessionally taxed superannuation system to save their first home deposit.

In addition, under the HomeBuilder Scheme, existing owner-occupiers and first home buyers, may be eligible for a grant of $25,000 to build or substantially renovate an existing home. First home buyers may also be eligible for state and territory grants and concessions.
These measures are designed to promote home ownership and support employment in the construction industry.
Speak to our lending team for more information - 03 9686 4976 / choice@choicecapital.com.au


Superannuation

The Government has not made any unexpected changes to the superannuation system for the 2020-21 FY. Previously announced COVID-19 measures and the Your Future, Your Super package will continue.


COVID-19 RESPONSE PACKAGE 

Temporary early access to superannuation
 
The Government is allowing eligible Australians affected by the financial impacts of COVID-19 to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. The 2020-21 application period for the measure will cease on 31 December 2020.

Temporarily reducing superannuation minimum drawdown rates

The Government has reduced the superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019-20 and 2020-21 income years. 

YOUR FUTURE, YOUR SUPER
Commencing 1 July 2021, the Government will implement reforms to improve outcomes for superannuation fund members. The reforms will reduce the number of duplicate accounts held as a result of changes in employment by "stapling" superfunds to members and prevent new members joining under-performing funds. The Government will require superannuation products to meet an annual performance test. Those that fail will be required to inform members and refer members to the YourSuper comparison tool. Persistently under performing products will be prevented from taking on new members.
Super fund trustees will need to ensure decisions are made in the best financial interest of members and provide better information on management and expenditure.


Social Security & Families

Much of the focus for the Budget has been on measures to support Australians who are out of work. The Government has confirmed extensions to the JobKeeper payments, provided clarification around COVID-19 payment supplements to those on JobSeeker, will make two $250 payments for eligible social security recipients, and has developed a new JobMaker Hiring Credit for employers who bring on younger Australians who have been on JobSeeker. 

JOBKEEPER PAYMENT EXTENSION

Social Security & Families Much of the focus for the Budget has been on measures to support Australians who are out of work. The Government has confirmed extensions to the JobKeeper payments, provided clarification around COVID-19 payment supplements to those on JobSeeker, will make two $250 payments for eligible social security recipients, and has developed a new JobMaker Hiring Credit for employers who bring on younger Australians who have been on JobSeeker.  JOBKEEPER PAYMENT EXTENSION The JobKeeper extension announced in July provides continued support until 28 March 2021, with the payment targeted to businesses that continue to be significantly affected by the economic downturn. The level of the JobKeeper Payment is being tapered to enable businesses to transition towards their longer-term plans and a two-tiered payment is being introduced to better match the Payment with the incomes of employees.

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