LOCAL STORIES

Back to School

By Warren Strybosch

We, at the Find Knox, would like to wish all the 2022 children, who are attending school this year, all the best in their endeavours and we hope you have a wonderful year learning and building relationships with your peers. Our thoughts especially to those school children who must wear masks and take regular RAT’s. To those parents who must administer the RAT’s and help their children remember their masks, on top of everything else you will have to do this year…we feel for you.

If anyone has any encouraging stories about their children’s school experience this year, please send them through to editor@findknox.com.au.

Jobless rate may drop below 4 pct soon

Colin Brinsden, AAP Economics and Business Correspondent (Australian Associated Press)

Scott Morrison wants to see the unemployment rate below four per cent in the second half of this year, but Employment Minister Stuart Robert says it could come sooner.

As of December the jobless rate already stood at 13-year low of 4.2 per cent.

The prime minister, just months out from a federal election, told the National Press Club on Tuesday an unemployment rate with a “three” in front was achievable – a level not seen in over 50 years. “It could happen very, very quickly because of the amount of effort we are putting into training Australians,” Mr Robert told ABC radio on Wednesday.

“This is something we very committed to because it just changes lives. We are seeing a generation of skills coming through that we haven’t seen for a long, long time.”

Reserve Bank of Australia governor Philip Lowe has a similar view for the jobless rate, falling below four per cent this year and being around 3.75 per cent by the end of 2023.

Deputy Opposition Leader Richard Marles said low unemployment is obviously “a good thing”.

“But there is still considerable underemployment in Australia today, a lot of people who are working but want to have more work,” he told Sky News.

He also scoffed at the idea that the Morrison government could win the election based on its economic management

“This is a government which has racked up more than a trillion dollars of debt and there is very little to show for it,” he said. “This is the second highest taxing government, next to the Howard government, which we have seen since the Second World War.”

Dr Lowe will address the National Press Club in Sydney later on Wednesday where he will get the opportunity to explain his thinking on the outlook for interest rates.

The governor stuck to the line of being “patient” before lifting the cash rate from a record low 0.1 per cent in his statement following Tuesday’s first board meeting of the year.

Financial markets, which are pricing in the risk of a rate hike by mid-year, had been expecting something more definite in its guidance following the recent drop in the unemployment rate and a surge in inflation pressures.

The RBA did announce the end of its multi-billion dollar bond buying program as economists had expected, which had aimed to keep market interest rates and borrowing costs low.

“Ceasing purchases under the bond purchase program does not imply a near-term increase in interest rates,” Dr Lowe said.

Free RAT for DVA and Concession Card holders but should it be free for others as well?

By Warren Strybosch

Only DVA Gold and White Card holders, Health Care Card holders, and other concession card holders can obtain Free Rapid Antigen Test (RAT) kits.

Chemists must prepay for the RAT kits and then on sell them to their customers. For DVA and Concession Card Holders, you can walk into a pharmacy, show your concession card, and receive up to five RATs for free which are being subsidised by Medicare. Thankfully, this option is available to concession card holders given many would struggle to come up with the required $75 needed to obtain the five tests.

Whilst concession card holders are now able to obtain the RATs, many casual workers feel they should also be receiving free RAT kits. Casual workers have suggested that every person should receive at least two free kits under the Medicare system. Regardless, of who is getting them for free or not, there is still a shortage of RAT kits for Victorians.

Interestingly, the Victorian Government has decided to give free RAT kits to every child attending school this year, however, it is not compulsory to take the RAT even if symptoms are presenting. It is hard to believe that every parent is going to administer these tests to their children even when there are no symptoms showing.

Whilst some workers are struggling to get their hands on a RAT kit, there is likely to be many school families stockpiling their RAT kits for a future event e.g., when they or someone in their family needs to take one so they can get back to work.

With shortages or RATs still occurring it is also likely that some school parents will see this as an opportunity to make a few quick dollars by on selling their kits to those in need.

Hopefully, we will see a decline in the use of RATs as the year progresses but that does seem a long way away as we see continue to see increased hospitalisations and more and more people getting sick from Covid.

Mark Mogato

High Income Earners – Beware of One-off Income Earning Events

ACCOUNTANT

By Warren Strybosch

If you are a high-income earner, especially someone who is now earning close to $250,000 this financial year, you need to understand how Division 293 applies so you do not get a surprise at tax time.

Division 293 tax is the additional 15% tax on concessional contributions for high income earners. The tax applies when a client’s combined income and nonexcessive concessional contributions for the year are greater than $250,000.

One-off events can result in clients having to pay Division 293 tax when normally their annual income is well below the $250,000 threshold.

Division 293 income definition

The definition of ‘income’ used for Division 293 provisions is the total of:

• taxable income (excluding any

FHSSS* released amount and any assessable super lump sum benefits where the low-rate cap applies for those under 60) • amounts subject to family trust distribution tax • reportable fringe benefits • total net investment losses • low tax contributions * First Home

Super Saver Scheme

What are low tax contributions?

Low tax contributions generally refer to all concessional contributions made in a year less any excess concessional contributions (as the excess amount is already picked up as part of taxable income).

Concessional contributions made to defined benefit schemes (both taxed and untaxed funds) and amounts allocated from reserves to the extent that they count towards the client’s concessional cap, may also be included as low tax contributions although the contributions are modified for defined benefit interests, State higher level office holders and Commonwealth justices and judges.

Transfers from foreign superannuation funds that are taxed in the receiving fund and rollovers of taxable component (untaxed element) from untaxed public sector funds are not included as low tax contributions as these amounts don’t count towards a client’s concessional cap.

Payment process

After a client submits their tax return and the super funds have reported all contributions for the year, the ATO will determine if a Division 293 tax liability has arisen. The client has a choice of:

• paying the tax liability personally, or • having the tax deducted from their super fund (via a release authority provided by the ATO).

To make this choice, the client can complete an election form on myGov. If this election is not made within the 60day timeframe provided, the ATO will issue a release authority directly to the super fund for payment.

Trap - beware of one-off events

Income (for Division 293 purposes) can increase suddenly in a particular financial year due to a one-off event resulting in an additional 15% tax on nonexcessive concessional contributions made in that year including concessional contributions made using the carry forward of unused cap rules.

Some of the common events that can arise to dramatically increase taxable • Employment termination payments and leave entitlements that are added to taxable income as a result of redundancy (ie the amount over the tax free portion). • The sale of an asset resulting in a capital gain. • Receiving a taxable super death benefit as a non-dependent beneficiary (eg adult child).

Example:

Rory is 50 years of age with a salary of $200,000 p.a. In the 2021-22 year, he plans to maximise his concessional contributions and will contribute $27,500. His father Jon has an account-based pension valued at $300,000 (all taxable component) and Rory is the sole beneficiary under a binding nomination.

In January 2022, Jon dies, and Rory receives the death benefit resulting in taxable income for the year of $500,000 (noting that the maximum tax rate that will apply to the $300,000 death benefit is 15% plus Medicare).

As Rory’s income exceeds $250,000 for 2021-22, he will receive (possibly unexpectedly) a Division 293 tax liability notice from the ATO for $4,125 ($27,500 x 15%).

Important note:

It is not the responsibility of the employer or the receiving super fund to deduct this additional 15% tax on concessional contributions. The onus to meet this liability is on the client.

At Find Accountant, we provide SMSF tax advice. Our senior accountant is also an award-winning financial advisor. If you require SMSF advice or are considering whether or not to wind up your SMSF, then speak to Warren Strybosch at Find Accountant Pty Ltd.

Warren Strybosch

You can call them on 1300 88 38 30 or email info@findaccountant.com.au www.findaccountant.com.au

WARREN STRYBOSCH

Find Group

The founder of the Find Group of companies draws on his diverse background, which ranges from teaching, to serving in the army, to taxation and accounting, to coach and help clients live their best financial lives. A multi-award winner, Warrens’s innovative approach in business means he was a champion of virtual financial advise long before the pandemic. Warren established the Find Foundation, which owns and operates acroos Victoria.

TOP 50 MOST INFLUENTIAL FINANCIAL ADVISER IN AUSTRALIA

The financial advisers featured in this guide are a diverse group: some specialise in responsible investment advice, some provide financial advise to specific professions, and some focus on addressing market gaps, mwith several finding themselves on the list for the very first time. But they all have one thing in common: they all wield influence that can create the blueprint for the future of financial advice in Australia. Not all of them are faniliar names but just because they are not making a lot of noise doesn’t mean they are not making waves. Meet our Power 50.

More face-to-face Aged Care Specialist Officer services being offered

Additional aged care support will now be available at an estimated 80 locations across Australia. The face-to-face service will be provided at Services Australia Service Centres and will assist older Australians with:

• information on the different types of aged care services available

• help to organise an aged care assessment

• help with the appointment of a representative for My Aged Care

• providing financial information about the various aged care services on offer

• finding contacts to local support services

Appointments can be booked with a specialist by calling the Aged Care line – 1800 227 475.

More face-to-face Aged Care Specialist Officer services being offered

For Financial Planning advice related to Aged Care; the costs involved in moving into aged care facility, how this will have an impact on your age pension, and what the implications will be when considering leaving something to your children, speak to a specialist aged care financial planner.

If there is not a financial planner in your area than continue to revisit this website as more financial planners will be listing soon.

You can search for a specialist financial planner at https://findagedcareaccommodation.com.au/find-advisers/

“For some who may have had contraindications or reactions with regards to other vaccines, this will provide an additional opportunity for them, as well as those who for whatever reason have not taken up the program so far,” he said.

“But I do want to encourage everyone, unless there’s a contraindication, please continue to come forward and take the existing vaccines.”

ATAGI says the vaccine can be taken by those who have had COVID-19, while severely immunocompromised people should take three doses. It can also be taken by pregnant and breastfeeding women.

It also has noted Novavax to be “highly effective” in preventing symptomatic COVID in adults.

While welcoming the news, the Royal Australian College of General Practitioners warned practices needed extra support.

“We are under enormous pressure … GPs and their teams will carry on and get as many doses into arms as possible, but we need more help and that needs to happen right now,” president Karen Price said.

“GPs are still reporting doses not arriving on time or insufficient stock being delivered. Practices are also struggling to absorb the cost of taking part in the rollout.”

Dr Price, who noted practices were given an additional $10 per booster shot since late last year, called for greater assistance now given “the scale of the task has only grown”.

She said additional funding could see more after-hours and weekend vaccinations.

Novavax to roll out from late February

Alex Mitchell (Australian Associated Press)

Novavax vaccines will be rolled out from February 21, becoming the fourth type of COVID-19 jab available in Australia.

Health Minister Greg Hunt said the Australian Technical Advisory Group on Immunisation had given the new COVID-19 vaccine the green light.

Novavax, which will be available for those aged 18 and older, will be a twodose course with a minimum three-week gap between first and second doses.

Mr Hunt said Australia would now receive its first shipment of the vaccine and the Therapeutic Goods Administration would go through a detailed batch testing process. Presuming the regulator deems it safe, it will then be rolled out.

He said the protein-based vaccine expanded Australia’s COVID coverage, with 51 million doses having been purchased.