Keeping you in touch May 2014 John Walker John Walker is an Authorised Representative of RI Advice Group Pty Ltd

“For better digestion I drink beer, in the case of appetite loss I drink white wine, in the case of low blood pressure I drink red wine, in the case of high blood pressure I drink scotch, and when I have a cold I drink schnapps.” “When do you drink water?” “I’ve never been that sick!”

Young AussiesFamilies with kids Higher income earners Pre-retireesRetireesEmployers Jobseeker reformsPaid parental leaveIncentives to save for super still intact, if you can afford it: -Contribution caps still indexed -Penalties for contribution breaches reformed Retirement savings focus Health care contribution Deregulation of tertiary education Changes to High Education Loan Program payback: sooner, and at a higher rate $50,638 (max 6%) Financial support for TAFE students Changes to social security benefits Loss of the tax offset for dependent spouses 2% temporary tax on income >$180k for 3 years ‘Restart’ program for older workers Pensions indexed to lower rate of inflation, not wages Super income stream will now count towards your Seniors Health Care Card eligibility for new applicants 1.5% tax cut for most businesses Delayed SG payment dates and rates 9.5% 1 July years

Jobseeker reforms Jobseekers younger than 30 will wait 6 months before receiving Newstart or Youth Allowance Deregulation of tertiary education Tertiary fees might increase (or decrease?) Changes to HELP repayments Payback now starts at $50,638k income, and the interest is likely to increase, but capped at 6% Financial support for TAFE students Students of Diplomas, Advanced Diplomas and Associate Degree courses will now be eligible for direct financial support First home saver accounts abolished Young Australians

Removal of dependent spouse tax offset Benefit loss of approximately $2,400 from July Some relief for singles Low income single parents will get an extra $750 per year for children aged between six and 12 years. Don’t forget… Kids under 16 are exempt from the $7 health payment after their first 10 visits. Increase of Superannuation Guarantee From 1 July 2014, the SG rate will increase to 9.5% where it will stay until 30 June The rate will then increase by 0.5% each year until it reaches 12% in 2022/23. Families with kids

Temporary budget repair levy Any income you earn over $180,000, may be subject to 2% extra tax for the next 3 years. Taxable incomeLevy payable (pa) $180,000$0 $200,000$400 $220,000$800 $240,000$1,200 $260,000$1,600 $280,000$2,000 $300,000$2,400 Higher income earners

No changes to super contribution caps No Budget change to contributions caps… and they’re still indexed. Relief if you breach the non-concessional contributions cap. “Restart” program for older workers $10,000 over two years to employers who hire a previously unemployed 50+ worker. Pro rata available for part time employment. But on the other hand Mature Aged Workers Tax Offset is abolished from 1 July 2014 for ALL tax payers. Increase of Age Pension Age The Age Pension qualifying age will continue to rise by six months every two years from the qualifying age of 67 (from 1 July 2033) gradually reaching a qualifying age of 70 years by 1 July Still to come News about super preservation age. Pre-retirees

Pensions indexed to a lower rate Pension payments are now indexed to inflation, not wage growth. Deeming thresholds reduced Reduced pension entitlements likely under the income test from 1 July Commonwealth seniors health card (CSHC) eligibility tightened Your tax-free super income stream will now count towards your CSHC eligibility. Seniors supplement for CSHC holders, gone Annual payments of $ (singles) and $1, for couples scrapped from 20th September Means test exemption for downsizing family home The ‘Housing Help for Seniors’ pilot announced in the 2013/14 Budget will no longer take place Retirees

Company tax cuts 800,000 businesses will get a 1.5% cut to the Company Tax Rate. Top 3,000 still on the hook The top 3,000 will still pay a levy to help fund the paid parental leave scheme. Super Guarantee increases delayed Remaining at 9.5% until And of course… Repeal of the minerals resource rent tax and the carbon tax. Employers

Social security thresholds frozen against indexation Social security thresholds will not increase for 3 years. Austerity measures We’ll all have to make choices about how we spend our household budget (health, fuel, university fees). For everyone

Some pressing questions How will you bridge the gap between your preferred retirement age and Aged Pension age? How will you make up for the compound effect of the delay in increase in Super Guarantee payments? Will there be indirect impacts on you because of changes impacting a family member? Would you be willing to make lifestyle changes because of cuts to social security benefits? What are the ‘non-negotiables’ in your family budget? Are your current financial strategies still relevant and effective?

Residential Aged Care Services Update

Activity with UnitingCare to date Presentations: 1 annual conference (Pitt Street) A regional conference (Belrose) Co-presented to U3A, with Tony Lowe Retirement Village (Turramurra) External Activity Presentations to CLA and Gadens Aged Care Seminars in 2009 and 2011 and RI Conference 2014

Government proposals – ongoing fees Buy a homeEnter an Aged Care Residence Pay 100 per cent or deposit Or borrow from the bank Pay 100 per cent (RAD) less Borrow from the Facility DAP or not Water rates Land rates Phone bills Shopping bills Insurance Bank Residential Fee Means Tested Fee Extra Services Fee Accommodation Pay the Bills

Aged Care – The Main Areas More home care Increased care contributions – means tested Entry cost refundable Fee transparency Fee Caps One level of residential care

15 Aged Care Comparison of Changes to Fee Structures Before 1 July 2014From 1 July 2014 Basic daily care feeStandard resident contribution Daily income tested feeMeans tested fee (combined income and asset test) Accommodation chargen/a Accommodation bondRefundable accommodation deposit or refundable accommodation contribution Accommodation bond via periodical payment Daily accommodation payment or daily accommodation contribution Retention amountn/a Extra services fee In addition, a resident may be required to pay any other amount agreed between them and the care provider

Costs going up and income coming down  From 1 July 2014 no pension supplement for Aged Care residents entering a facility after 1 July. INCOME DOWN  From 1 July 2014 Home Care supplement – Income Tested. COSTS UP  From 1 January 2015, new Account Based Pensions will be deemed. There will be no Centrelink free amounts  Income Test change could reduce Age Pensions  Change could increase Income Test component of Means Tested Fee INCOME DOWN COSTS UP  From 1 July 2019 NMETO abolished. COSTS UP if client pays tax COSTS UP

Couples / Singles Solicitor Accountant Aged Care Fees Age Pension / DVA New language (DAP, RAP etc.) Investment Types ACAT Means Testing Trusts YOU and ME

18 How can I help? Discuss your options Manage your financial affairs including your estate planning considerations Fee reduction strategies Keep or sell the family home

19 Disclaimer Important Notice RI Advice Group Pty Ltd, ABN , holds Australian Financial Services License Number and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts. The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.

Thank you