The start of a new year is a great time to review your finances. Here are some recent changes and new opportunities to consider in 2019 and beyond.
First home deposit
Voluntary super contributions made since 1 July 2017, may now be withdrawn to buy a first home under the First Home Super Saver Scheme (FHSSS). The FHSSS allows eligible first home buyers to save their deposit in the concessionally taxed super environment.
HECS and HELP debts
From 1 July 2019, students and graduates who earn $45,881 pa or more will need to start repaying their HECS and HELP debts. Currently, repayments don’t need to be made until $51,957 pa or more is earned. Repayment rates will also change and a lifetime debt limit will be introduced.
Instant asset write-offs
Small business owners may be able to claim an immediate tax deduction of up to $20,000 when purchasing certain assets before 30 June 2019. From 1 July, the claimable amount will reduce to $1,000.
Catch-up super contributions
Super fund members, who make concessional contributions of less than the cap of $25,000 in 2018/19, may be able to contribute more than the cap amount in 2019/20 and beyond. This could enable ‘catch-up’ super contributions to be made in future financial years. Concessional contributions include all employer contributions (super guarantee and salary sacrifice), personal contributions claimed as a tax deduction and certain other amounts.
Super work test exemption
The Government has released regulations to allow retirees aged 65 to 74 with ‘total super balances’ below $300,000 to make voluntary super contributions in the first year they don’t meet the ‘work test’ from 1 July 2019. This measure gives eligible recent retirees more time to make super contributions before they become ineligible. Currently, 65 to 74 year olds need to have worked at least 40 hours in 30 consecutive days in a financial year to be able to contribute to super.
Super fund members aged 65 or over may be able to contribute up to $300,000 per person to super from the sale of their home after 1 July 2018 if they meet certain conditions. These ‘downsizer’ contributions don’t count towards the concessional and non-concessional contribution caps and can be made without needing to meet the usual age, work and other contribution tests.
Tax offset for aged care costs
For the 2019/20 and subsequent financial years, aged care residents will no longer be able to claim a portion of certain care costs (such as daily care fees and means-test fees) as a tax offset when they complete their tax return. This could increase the income tax payable by some aged care residents.
We can help assess whether any of these opportunities suit your needs and situation and make suitable adjustments to your financial plans. Please contact firstname.lastname@example.org.
Important information and disclaimer
This article has been prepared by Kellie Payne of Kellie Payne Financial Solutions an authorised representative of Millennium3 Financial Services Pty Ltd ABN [61 094 529 987 AFSL 244252. Any advice provided is of a general nature only. It does not take into account your objectives, financial situation or needs. Please seek personal advice before making a decision about a financial product. Information in this article is current as at 12 December 2018. While care has been taken in the preparation of this article, no liability is accepted by Kellie Payne, Kellie Payne Financial Solutions or Millennium3 Financial Services Pty Ltd or its related entities, agents or employees for any loss arising from reliance on this article. Any tax information provided in this article is intended as a guide only. It is not intended to be a substitute for specialised tax advice. We recommend that you consult with a registered tax agent.