1. Federal Budget 2019
ARCO ADVISORY

2. Important
This information is issued by Financial Services Partners Pty Ltd, ABN , which holds Australian Financial Services Licence Number and is a summary of Financial Services Partners’ understanding of the proposed Federal Budget 2019/20 changes announced on 2 April Financial Services Partners is a company within the IOOF Group of companies, consisting of IOOF Holdings Limited ABN and its related bodies corporate. The changes are subject to the passing of legislation and, accordingly, may not become law or may change. Please note that the information is based on Financial Services Partners’ interpretation of the proposed changes as at the date of issue of this document. Accordingly, you must not do or refrain from doing anything in reliance on this information without obtaining suitable professional advice. In addition, the information is of a general nature and may not be relevant to your/your client’s individual circumstances. Before making any investment decision you must consider the relevant PDS, available on request by calling Financial Services Partners. This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without obtaining professional financial advice specific to your circumstances. If you wish to opt out of future communications, please contact us.

3. Federal Budget
Federal Budget 2019

4. Let’s keep in mind Budget proposals are not immediately law
Some may have effect from Budget night, but still require the passage of legislation to be enacted
Not many parliamentary sitting days before May
Federal election will need to be called some time shortly
Whatever has not been passed is shelved
Would require re-introduction by new Government
Federal Budget 2019

5. Federal Budget overview
Super
Taxation
Social security
Federal Budget 2019

6. Super
Federal Budget 2019

7. Improving flexibility for older Australians
Increasing the ability for those over age 65 to make contributions
‘Work test’ requirement to apply from age 67
Currently applies if age 65 or over at the time the contribution is made
Non-concessional contribution bring-forward trigger extended to age 67
66 or under on 1 July
Currently 64 or under on 1 July
Spouse contributions can be made to age 74
Spouse work test requirements expected to remain
Same caps / rules apply
Federal Budget 2019

8. Reducing red tape for small funds
Small fund tax compliance assistance
Remove requirements for funds fully in retirement phase to obtain actuarial certificate
Unexpected impact from transfer balance cap changes
Allow funds flexibility in determining tax free earnings where moving between accumulation and retirement phases
Federal Budget 2019

9. Taxation
Federal Budget 2019

10. Personal income tax cuts
Further changes to the ‘ten year personal income tax plan’
Low and middle income tax offset increasing immediately
Base rate from $200 to $255
Maximum from $530 to $1,080
Taper rates adjusted to phase in and out at broadly similar points
Offset is only temporary
Ceases to operate in 2022 financial year
Federal Budget 2019

11. Personal income tax cuts
Federal Budget 2019

12. Personal income tax cuts
Future personal tax changes
From 1 July 2022, low income tax offset increases to $700
Slight change to taper rate
Still phases out at $66,667
From 1 July 2024, 32.5% marginal rate reduced to 30%
These are in addition to already legislated changes
From 1 July 2022 the 19% marginal rate increases from $41,000 to $45,000
From 1 July 2024 the 37% marginal rate is abolished
Federal Budget 2019

13. Personal income tax cuts
Marginal rate
2018/ /22
2022/ /24
2024/25 +
Nil
Up to $18,200
19 per cent
$18,201 – $37,000
$18,201 - $45,000
30 per cent
N/A
$45,001 - $200,000
32.5 per cent
$37,001 - $90,000
$45,001 - $120,000
37 per cent
$90,001 - $180,000
$120,000 - $180,000
45 per cent
$180,001 +
$200,001 +
Federal Budget 2019

14. Small business instant asset write-off
Extending the temporary tax relief measure
From 2 April 2019
Instant asset write-off threshold increased to $30,000
Applies on a per-asset basis
Available to businesses with turnover less than $50m
Must be first used / installed for use between Budget night and 30 June 2020
Federal Budget 2019

15. Social Security
Federal Budget 2019

16. Energy assistance payment
One off payment
$75 singles
$125 couples
Welfare recipients in Australia who were receiving payment on 2 April 2019
Pensioners (including Age Pension, Disability Pension and Service Pensions)
Carers
Single parents
Newstart recipients
Unsure when this will be paid
$75 for singles and $125 for couples will go to nearly 4 million welfare recipients
The payments of $75 for singles and $125 for couples will go to 2.4 million pensioners, 744,000 disability pensioners, 280,000 carers, 242,000 single parents and 225,000 veterans and their dependents – provided legislation is passed by 1 July.
$1.44 per week - not even a Sunday mail per fortnight
Federal Budget 2019

17. Aged care Increased funding More scrutiny of aged care providers
Improved payments administration
Federal Budget 2019

18. Questions?

19. Thank you.