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SUPERANNUATION
with Brendan O’Farrell
FEDERAL BUDGET LETS TALK
QHA REVIEW | 42
INTERESTING PROPOSALS IN THE 2018 FEDERAL
BUDGET
Intrust Super has just celebrated its 30th birthday! I’d
like to thank QHA members for your continued support
over the years. The Intrust Super team is looking forward
to providing hospitality staff with the best possible
retirement outcomes for many years to come.
The 2018/19 Federal Budget proposed some interesting
changes to taxation and superannuation. Unsurprisingly,
given the likelihood that this was the last Budget
announcement before the next general election, surprise
announcements were kept to a minimum. There were
several changes to superannuation, however, which
could significantly impact younger
staff members.
I have summarised some of the announcements that
might be of interest to QHA members. It is important to
remember that the following are just proposals, and will
need to pass through Parliament before becoming law.
TAXATION CHANGES
The Government plans to introduce a seven-year
Personal Income Tax Plan, mainly aimed at providing tax
cuts to middle and low-income earners.
This plan involves the introduction of a Low and Middle
Income Tax Offset, providing low and middle income
earners with a maximum offset of $530. This offset is
intended to be a temporary measure, applying annually
from the 2018-19 financial year before phasing out in
2021-22.
From 1 July 2018, the Government also wants to raise
the upper threshold of the 32.5 per cent personal
income tax bracket from $87,000 to $90,000. In
addition, personal income tax brackets will be reduced
to four brackets by 2024. This reduction will mean the
majority of taxpayers, earning between $41,001 and
$200,000, will be charged 32.5 per cent tax.
CHANGES TO FEES AND LIFE INSURANCE
IN SUPERANNUATION
From 1 July 2019, the Government aims to introduce
capped fees on superannuation accounts with low
balances, and a ban on all exit fees charged by
superannuation funds.
In addition, all inactive superannuation accounts that fall
below $6,000 will be transferred to the ATO. The best
way for staff to avoid this is to make contributions to
their account. Intrust Super members can set up a direct
debit of as little as $20 per month. This would reduce the
likelihood of an account being transferred to the ATO.
Finally, individuals under 25, with account balances less
than $6,000, or with inactive accounts will need to optin
to receive insurance. Default insurance will no longer
be available to these individuals. Intrust Super will keep
your staff informed as this policy develops. It could have
a significant impact on young members who currently
have an insurance policy with the Fund.
CHANGES FOR RETIREES AND THOSE CLOSE
TO RETIREMENT
From 1 July 2019, the Pension work bonus is proposed
to increase from $250 to $300 per fortnight, and
eligibility for the bonus is to be expanded to include selfemployed
retirees. This will allow eligible retirees to earn
up to $300 per fortnight without impacting their pension.
The Government also wants to introduce a limited,
one-year exemption from the work test for people aged
65-74 with superannuation balances below $300,000.
The exemption will allow such retirees to make super
contributions for the first financial year they do not meet
the work test.
If you have any questions about the proposals from the
Federal Budget, the financial advisers at Intrust360° can
help. Just call 1300 001 360. Low-cost super advice is
now available over the phone.
The information contained in this document is of a general
nature only, and does not take into account your individual
situation, objectives and needs. You should consider the
appropriateness of the general information having regard to
your own situation before making any investment decision. A
Product Disclosure Statement is available at www.intrust.com.
au or call us on 132 467 for a copy.
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