The Federal budget was announced on Tuesday 6th October after a delay due to the coronavirus pandemic.
Treasurer Josh Frydenberg said it would focus heavily on job creation in order to pull the country out of the economic crisis it faces. With uncertainty remaining until a vaccine for Covid-19 is available, there will likely be more announcements as circumstances change over time. Some of the key measures in the budget are:
Lower and middle income earners will receive a tax cut that will be up to $2,745 for singles or up to $5,490 for dual income families in 2020–21.
The table above is taken from the Government’s Budget website – talk to us about actual figures for your situation.
Employers and young workers – The JobMaker hiring credit is aimed at increasing employment for young people aged 16-35 years. Employers who demonstrate an increase in overall employment will receive a credit for a period of 12 months for eligible employees.
The instant asset write-off threshold – Businesses with turnover up to $5 billion will be able to write off the full cost of eligible depreciable assets of any value in the year they are first used or installed ready for use. The cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.
Temporary loss carry-back – Companies with turnover up to $5 billion will be able to temporarily, up to June 2022, offset tax losses against previous profits and tax paid in or after 2018-19.
Research and Development – For small claimants (turnover less than $20 million), the Government will increase the refundable R&D tax offset to 18.5 percentage points above the claimant’s company tax rate.
Fringe Benefit Tax Returns now simpler – employers will be able to use existing corporate records, rather than prescribed records, to complete their FBT return and employer-provided retraining activities will now be exempt when employees are redeployed to a different role in or outside the business. From April 2021, carparks and electronic devices will also see concessions.
Paid parental leave is extended – Parents will now qualify for the payment if they have worked 10 of the 20 months before giving birth or adopting, as opposed to 10 of the past 13 months.
$50 million will go to a Regional Tourism Recovery initiative to support tourism operators market to a domestic audience.
The budget promises $2 billion for concessional loans to help Farmers receiver from drought. There are also plans for improved water infrastructure and support for exporters.
Over the next four years an additional 14 billion is committed for new and accelerated projects in Australia.
Apprenticeships and training
Businesses will receive the 50 per cent wage subsidy, up to a cap of $7,000 per quarter, for commencing apprentices and trainees, including those employed by Group Training Organisations, until 30 September 2021 $252 million will be spent over two years to support the delivery of 50,000 higher education short courses in areas including teaching, health, information technology, science and agriculture.
Superannuation funds will now be linked to employees and move with them in order to stop so the creation of unintended multiple accounts. An online tool named YourSuper will give people the ability to compare funds. Aged care pensions will increase by an extra $250 payment in December and March, and government funding will be provided for 23,000 new home care packages.
There are also commitments across a number of other areas such as for the homeless, investment in dementia care, health, tourism, first home buyers and the environment.
The coronavirus pandemic has forced a significant amount of change and upheaval onto you and your team – in a very short amount of time. We’ve gone from ‘business as usual’ to closed offices, working from home and the full reality of isolation during an emergency lockdown.
To combat this change, it’s important to take steps to care for your employees.
Key ways to take care your teams wellbeing
There’s no single solution when it comes to taking care of your employees’ wellbeing. For your people to cope with their new enforced remote working life, they’ll need to consider everything from work/life balance, to fitness, exercise or their own mental wellbeing.
As a leader, your advice, tips and support will be vital to your workforce during these testing times. Important areas where you can provide guidance may include:
Getting used to remote working – Switching from working in a busy communal workspace to being isolated in your own home is a huge shift. Provide as much guidance as you can and send your team links to useful remote working resources.
Keeping in contact with each other – team spirit is a hugely important thing to preserve, even when your people are spread over different locations. It’s crucial that your employees can communicate with each other in real time, whether it’s instant messaging, like Slack or WhatsApp, or the many different video conferencing platforms, such as Google Hangouts, Zoom, Skype, or Microsoft Teams.
Sticking to some form of routine – a big part of any working day is routine. Having a clear routine provides structure for your employees day and makes it easier for them to know when they should be working, and when they should be relaxing.
Being conscious of work/life balance – as per the previous point, when you work at home, it’s imperative to get the balance right between ‘work time’ and ‘home time’. Give your team a rough idea of what hours they should be working, and between which times, but let them be flexible about how they use that time.
Having frequent breaks away from work – another very important element of the working day is breaks. In a normal workspace, tea breaks and catch-ups serve to break up the working day, so make sure your team take regular screen breaks. It’s a chance to relax and let your mind recharge.
Taking regular exercise – when you’re cooped up at home, it’s tempting to sit all day. But we all need some form of exercise during the day to keep us energised, fit and healthy. Whether it’s following a YouTube exercise routine, or running around the block, ensure your team does something to get the blood flowing.
Focusing on mindfulness and mental health – Taking measures to reduce stress and become more calm is vital for your team’s mental health. Try yoga or meditation to destress, and suggest they explore mindfulness apps like Headspace and Calm to introduce them to new techniques.
Limiting exposure to news and social media – watching rolling news reports on the pandemic, or constantly getting notifications from your social media accounts, serves only to add to your team’s stress levels. Suggest that they check the news via one trusted source once a day, but try not to let themselves be bombarded with updates.
If your superannuation fund balance is less than $500,000, a new rule means you are now able to carry forward any unused concessional contribution from prior years into following years. This allows you to maximise the tax benefits of contributing the upper limit concessional amount.
It also gives you some flexibility with being able to contribute more in years that you have the cash flow to do so. This is useful for people whose income has been interrupted or for those who receive larger than usual income some years.
Once your fund balance reaches $500,000 you won’t be able to carry forward unused amounts. Also, unused balances can only be carried forward for up to five years.
The new rule applies from 1 July 2018. This means that the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount. This year, there is only one year (2019) of unused cap that can be carried forward. In 2021, there will be two years of unused balance available to carry forward and so on, up to a maximum of five years balance to carry forward in the 2024 financial year. Assuming the law doesn’t change, the five-year expiry rule will continue from then.
What are Concessional Contributions?
Concessional superannuation contributions are those made to your super fund before tax. This includes compulsory employer superannuation guarantee contributions, additional employer before-tax super and salary sacrifice amounts.
It may also include personal contributions you make as tax deductions, for example, sole traders who contribute to their own super fund.
Roll Over Unused Concessional Balance Example
If you contributed $15,000 in the 2019 financial year, and your fund balance is less than $500,000, you can contribute an extra $10,000 in the 2020 financial year, above the usual $25,000 concessional cap, bringing the total for 2020 to $35,000.
As another example, let’s say as a self-employed person you did not contribute any superannuation for 2019 to 2023. In the 2024 financial year, you could then contribute $125,000 to catch up to the allowable concessional contribution cap for the previous five years.
Concessional Contributions Checklist
Check your superannuation balance as at 30 June 2019. Was it less than $500,000?
What did you contribute to super in the 2019 financial year?
If you contributed less than $25,000 in 2019 and you have available cash flow, consider topping up to the threshold, even if you don’t pay the full $25,000 this tax year. You can always carry forward this year’s threshold balance and top up in a future year.
What is the last date your super fund will accept payments? It will probably be at least a week before the end of the financial year.
Get advice before making extra contributions
If you contribute too much to your super fund you may end up with a tax bill! If you’re keen to get the tax benefits of maximum contributions, talk to us now before your super fund deadline and we’ll help you build your super balance. We can also help you start planning for the following year’s contributions.
Devenny Payne is proud to support the 15th David Calleja
Memorial Car Show.
To be held on 2 February 2020, the event is expected to
attract over 2 000 people from all over Victoria with more than 600 car
enthusiasts displaying classic, historic and modified cars, trucks and bikes.
All funds raised are donated to Djerriwarrh Health Services
(DJHS) to purchase medical equipment to improve patient care. The event also
promotes awareness of the health services DJHS provides to the local
communities of Bacchus Marsh, Melton and Caroline Springs.
DJHS relies on the generosity of patients and their carers
(past and present), individual donors, community groups and corporate
supporters to supplement government funding in order to ensure vital
improvements are made to benefit patient care.
We are pleased to announce Devenny Payne has been recognised
as a finalist at the recent Ballan and District Chamber of Commerce Business
Excellence Awards 2019 in the category of Professional Services.
We celebrate this achievement with our team of hard working experienced
professionals who every day strive for excellence in the service of our clients
and thank our valued clients who believe in our vision of helping small
business do big things.
recognition for its excellent contribution to the broader community reinforces
the strength of the firm in connecting with the local community and engaging
with our clients.
Devenny Payne has been serving small and medium sized
businesses for over ten years and we are honoured to have achieved recognition
for our team’s commitment to service our clients and community.
There is nothing more rewarding than seeing our clients make
an impact and achieve their goals as a direct result of our financial and strategic
The Awards showcase the local community’s talented business
pool and Devenny Payne congratulates all the Award winners.