LOCAL STORIES

ASIC - Influencers providing money advice have been warned

Friends/family

News/media

Financial adviser

Other

Other financial Professional 10%

9% 22%

18% 35%

Warren Strybosch

Who do you get your money or finance advice from? For many people they rely on their friends and family. For others, it is their professional advisor. In the past their professional advisor was the accountant but now that accountants can longer provide financial advice anymore, more people are turning to licenced financial planners. However, there is a growing number of people who do not seek professional advice but rather put their faith and trust into financial influencers or ‘fin-influencers’.

With a recent survey conducted by the Australian Securities and Investments Commission (ASIC), they found that over 33 cent of 18 to 21 year-olds are following someone a fin influencer on social media to obtain money advice. ASIC has become concerned about these influencers that they have released a paper INFO 269 warning social media influencers of the substantial risks and penalties they face if they promote financial products and services online.

The information sheet warns that anyone discussing financial products and services online or promoting affiliate links must understand their legal obligations, including whether they are providing financial product advice or arranging for followers to deal in a financial product.

“Make sure your content is accurate and balanced. If your online post is misleading, you may be breaking the law.”

ASIC stated that influencers can share factual information but if that information is presented in a way that conveys a recommendation that someone should or should not invest in a product or a class of products, then this may be a breach of law.

“If you’re an influencer who receives benefits or payment for your comments in relation to financial products, you’re

Social media

more likely to be providing financial product advice because it indicates an intention to influence the audience,” the information sheet warned. ASIC commissioner Cathie Armour said the way investors access information is changing.

“It is crucial that influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk,” said Ms Armour.

“ASIC monitors select online financial discussion by influencers who feature or promote financial products for misleading or deceptive representations or unlicensed advice or dealing. If we see harm occurring, we will take action to enforce the law.”

Dr Angel Zhong – who is a senior lecturer in finance in the school of economics, finance and marketing at RMIT University - applauded the move by ASIC, after recent research by the university found that financial information consumed online influenced investment decisions.

“Unverified investment advice is no different to fake news, which is frequently flagged by social media platforms that urge viewers to read with caution,” Dr Zhong said.

“Newbie investors are particularly susceptible to receiving dodgy financial advice, as the internet replaces traditional outlets like accredited financial advisers.

As one of Australia’s most popular fin influencers, better known as the Bare Foot Investor, we emailed Mr Scott Pape, seeking his response to INFO 269. We asked him to comment on his audio books which direct clients to use certain industry funds and personal insurances within those industry funds. Lastly, we asked him if he would be making it clear that he is no longer able to provide

6%

Source: ARdata consumer survey 2022

financial planning advice since giving up is Australian Financial Services Licence back in 2020. As of writing this article, we have had no response from Mr Pape.

As a side note, we acknowledge that the financial planning world has changed a lot over the past few years, and it is hard to keep abreast of these changes. We would encourage Scott to review his material in his books before releasing the next edition. For instance, he may not be aware that most industry fund insurers have changed their Total and Permanent Disability terms about five years ago and now have made it very hard for anyone to get a claim paid under their ‘any’ occupation definition. Also, professionals should consider an ‘own’ occupation definition which cannot be offered by industry funds. Pricing is another factor. Often it is cheaper in the long term to take up personal insurances with a retail insurer whilst still paying the premiums from their industry fund as a rollover. Given industry funds don’t offer level premiums, for young people, having a level premium policy can save them thousands of dollars in the long term compared to stepped policies.

Whilst Financial Services Minister Jane Hume last year compared the influencers to “taxi drivers…giving stock tips”, ASIC has taken a dimmer view. Last month, the corporate watchdog updated its guidance and warned unlicensed influencers could face up to five years in prison or significant fines for breaking financial services laws.

ASIC, in the past, have made bold statements and often their bark has been bigger than their bite. It will be interesting to see if ASIC will follow up on INFO 269 as undoubtedly, fin influencers, will continue to provide comments that may be construed as providing ‘money’ advice that they consider is not always in the best interest of consumers.

Influencers in firing line – this time with Therapeutic Goods Administration (TGA)

Warren Strybosch

Many people want to become an influencer because of the money they can bring in from incentivised testimonials promoting health care products and the like.

However, the TGA have made revisions to the Code which specifically deals with social media influencers. The new rules prohibit paid or incentivised testimonials by influencers in relation to any and all health products within Australia.

The TGA have stated that influences can no longer be paid for posts related to sunscreen, protein powder, vitamins, supplements, medicines, skin-lightening products, and ‘acne skincare.’

Many people believe the ban or restrictions placed on influencers, be in influencers providing ‘money’ advice (read our other article in this month’s edition related to fin influencers) or those selling health products, can only be a good thing as it will combat misinformation which has become a big concern for regulatory bodies.

Some people have spoken out against the bans believing it will have a negative impact on their lives; namely LGBTQIA+ and female social media influencers. However, most people believe combating misinformation is more important than some people making a lot of money from promoting products that they likely don’t care about and/ or don’t believe in. Some people have gone so far as to state that influencers should go and “get a real job”; believing influencers have become famous for all the wrong reasons.

To clarify these new rules brought out this year, the TGA stated that “companies can continue to connect with influencers for the purpose of product promotion”. However, an influencer cannot, whether direct or inferred, provide any type of personal endorsement of health products. They can work with a business but cannot express their personal opinions about the business or the products they sell. As such, an influencer can be seen holding a product but cannot comment on it or provide a personal testimonial anywhere; be it their own websites, print material, and social media.

According to the TGA, this step will result in greater transparency regarding product reviews and suggestions on social media. Testimonials can be overly persuasive to a sensitive audience looking for products to help with their health and, in some cases, really significant health concerns. The new Code assures that endorsements are as neutral as feasible and are not swayed by business interests or personal benefit. For the TGA, since the inception of social media, misinformation has been a major concern. Some products have been endorsed that were either fraudulent in their claims or, worse case, led to deaths. The TGA wants consumers to have confidence that any testimonial is free from influence or bias and that the products they purchase have information supplied that is true and correct to label. The TGA has gone so far as to require influencers to delete past posts in relation to certain products e.g., sunscreen, if those posts were incentivised in any way.

Influencers have been a key sales strategy for many well-known brands and these changes are likely to impact sales in the short term as the grapple with the new codes now in play.

For influencers, they may need to look elsewhere to secure their fortunes. Given the pharmaceutical industry as always been a lucrative one to be a part of the new rules are sure to hurt some influencers bottom line going forward. Unfortunately, we don’t believe there will be any Change.org campaigns or the like to help their cause.

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Paid Parental Leave Scheme to be Expanded

Andrew Brown (Australian Associated Press)

Single parents will now be able to access the full 20 weeks of paid parental leave, under changes to the scheme announced in the federal budget.

The 2022/23 budget unveiled changes to the paid parental leave scheme, which would expand eligibility for the program.

Enhanced paid parental leave will provide up to 20 weeks of flexible leave for eligible working families.

The changes would mean eligible single parents would be able to access an additional two weeks of paid parental leave.

The federal government will provide $346.1 million over five years to improve the paid parental leave scheme. The scheme will be changed by rolling the Dad and Partner Pay into Parental Leave Pay to create a single scheme.

The paid parental leave can be taken within two years of the birth or adoption of the child.

It’s estimated 180,000 new parents access the paid parental leave scheme each year.

The budget papers say the changes to the scheme would not result in any existing people who are on the scheme being worse off under the changes. A further $19.4 million has been set aside over five years to set up a new grant round of the community child care fund.

The fund is used to help set up new child care services in rural, remote and regional areas where child care services are limited.

It’s forecast $11 billion will be spent on child care during 2022/23, with $10.7 billion coming from the child care subsidy.

Flood-affected childcare centres will also receive a boost from the budget, with $22.1 million over two years to increase the community child care fund.

Latest Snapshot of Coronavirus Impact

Robyn Wuth (Australian Associated Press)

AUSTRALIAN VACCINATION NUMBERS:

* There have been 56,665,166 vaccine doses administered in the national COVID-19 rollout up to Monday, including 57,638 recorded in the previous 24 hours.

* Of that total, 35,870,745 have been administered by commonwealth facilities, an increase of 45,731 in the previous 24 hours.

* State and territory facilities have administered 20,794,421 vaccines, an increase of 11,907 in the previous 24 hours.

* 96.83 per cent of people aged 16 and over have had at least one dose of a COVID-19 vaccine and 95.17 per cent are double vaccinated. booster or top-up shot – an increase of 30,428 in the previous 24 hours.

AUSTRALIAN CORONAVIRUS NUMBERS:

* 58,254 new cases: 19,183 in NSW, 9946 in Queensland, 12,007 in Victoria, 8145 in Western Australia, 5068 in South Australia, 2437 in Tasmania, 918 in the ACT and 550 in the Northern Territory.

* The national death toll is 6422 (+38): Victoria 2763 (+8), NSW 2473 (+12), Queensland 755 (+8), South Australia 268 (+4), WA 67 (+5), ACT 43 (+1), NT 36 and Tasmania 31. (Two Queensland residents who died in NSW have been included in the official tolls of both states).

GLOBAL CORONAVIRUS NUMBERS:

* Cases: at least 493,675,018

* Deaths: at least 6,169,931

* Vaccine doses administered: 11,007,686,598

Data current as at 1700 AEST on April 5, taking in federal and state/territory government updates and Johns Hopkins Coronavirus Resource Centre figures.

Coming Election - Labor’s focusing on Aged Care

During the budget reply, the opposition leader decided not to talk about economic policy but instead used the opportunity to kick off his election campaign with the address centred around aged care.

Aged Care

The address was full of spending promise. If elected they would spend $2.5 billion in the Aged Care sector with the aim to improve the standards and quality of care under a five-point plan, including:

1. requiring every aged care facility to have a qualified nurse on site 24 hours a day; 2. mandating every aged care resident receives a minimum 215 minutes of care per day (noting this was recommended by the Royal

Commission); 3. delivering a pay rise for aged care workers through an appeal to the Fair Work Commission to set higher wages (noting this financial commitment was not included in the estimated $2.5 billion aged care package but could amount to as much as $4 billion if the Commission agrees with the unions on the pay rise they are seeking); 4. providing better food for residents by setting a mandatory nutrition standard for agreed care; and 5. introducing more accountability measures including requiring providers to publicly report their spending and promising more staff and funding for the Aged Care

Safety Commission. Interestingly, the Opposition once again avoided discussing economics and kept away from answering the key question as to how they were going to pay for all of this, as well as all the other spending promises they have made to date.

What was notably interesting in the Oppositions reply was their statement that they would increase defence spending which is at odds with the Greens. Labor needs the Greens bi-partisan support for the up-and-coming election if they have any hope of winning, so this announcement is sure to stir the hornets’ nest.

We look forward to finding out how Labor proposes to pay for all their future spending initiatives. History has shown that Labor is very quick to spend money to win the people (when I say people it usually ends up in the hands of the unions and not the ordinary everyday Australian) but find it very difficult to manage it wisely.

COVID Grants – Now approved as tax-free income

By Warren Strybosch

The following COVID grants have been granted status as non-assessable non-exempt income (NANE) (basically tax-free income):

2022 Small Business Support Program (NSW); Commercial Landlord Hardship Grant (NSW); NSW Accommodation Support Grant (NSW); NSW Festival Relaunch Package (NSW); NSW Performing Arts Relaunch Package (NSW); 2021 COVID-19 Business Support Grants (Qld); COVID-19 Additional Business Support Grant (SA); COVID-19 Business Hardship Grant (SA); COVID-19 Business Support Grant - July 2021 (SA); COVID-19 Tourism and Hospitality Support Grant (SA); COVID-19 Business Support Grant (ACT).

For more information go to: Income Tax Assessment (Eligible State and Territory COVID-19 Economic Recovery Grant Programs) Amendment Declaration (No.3) 2022.

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Victorian Sick Pay Guarantee for Casual Employees – Apply before you get sick

By Warren Strybosch

Victoria is the first state to provide 5 days a year of sick and carer's pay at the national minimum wage for casual and contract workers in certain occupations. The Victorian Sick Pay Guarantee will operate for 2 years, starting in 2022 and is fully funded by the Victorian Government. The Victorian Sick Pay Guarantee provides casual and contract workers with a guarantee they will receive sick pay when they need to take time off when they are sick or need to care for loved ones.

Important: Your employees must register and be approved with Services Victoria BEFORE they get sick. If you apply for this payment after you become ill, you will not get paid for the days you were sick prior to applying.

Whilst this is good news for casual workers, it is confusing for the employers. Currently, employers pay an additional 25% leave loading to casuals to cover the fact that casuals did not get leave entitlements. However, this new payment to casual workers does not remove the employers leave loading liability which will need to continue to be paid. It is unlikely the leave loading will be removed.

Eligibility for the Sick Pay Guarantee

To be eligible for the Sick Pay Guarantee you must meet all these criteria:

• Age – be 15 years or over • Type of employee – be a casual employee or self-employed with no other employees (such as a sole trader or an independent contractor) • Leave entitlements – not be entitled to paid personal, sick or carer’s leave in any of your jobs • Workplace – work physically in Victoria, no matter where you live • Right to work – have the right to work in

Australia • Occupation – work in an eligible occupation (see table below) • Average hours worked – on average you work at least 7.6 hours per week in an eligible occupation(s).

What you need to make a claim

Occupations eligible in the first phase of the Victorian Sick Pay Guarantee are:

Job Type of Work

Hospitality workers Providing services to patrons of hotels, bars, cafes, restaurants, casinos and similar establishments.

Food preparation assistants Preparing food in fast food establishments, assisting food trades workers and service staff to prepare and serve food, cleaning food preparation and service areas.

Food trades workers

Sales support workers

Sales assistants Baking bread and pastry goods; preparing meat for sale; planning, organising, preparing and cooking food for dining and catering establishments.

Providing assistance to retailers, wholesalers and sales staff by operating cash registers, modelling, demonstrating, selecting, buying, promoting and displaying goods.

Selling goods and services directly to the public on behalf of retail and wholesale establishments.

Other labourers who work in supermarket supply chains

Aged and disability carers Including workers who fill shelves and display areas in stores and supermarkets; load and unload trucks and containers; and handle goods and freight.

Providing general household assistance, emotional support, care and companionship for aged and disabled persons in their own homes.

Cleaners and laundry workers Cleaning vehicles, commercial, industrial and domestic premises, construction sites and industrial machines, and clothing and other items in laundries and dry-cleaning establishments.

Security officers and guards Providing security and investigative services to organisations and individuals, excluding armoured car escorts and private investigators.

These occupations are highly insecure and workers in these industries do not usually have access to sick and carer's pay.

Super and Tax Thresholds for 2022/23 Released

FINANCIAL PLANNING

By Warren Strybosch

Super contributions caps:

Type of Contribution Cap 22/23 Description

Concessional Contributions $27,500 Employer contributions (including SG and salary sacrifice) and personal contributions where tax deduction claimed.

Non-concessional Contributions $110,000 Personal contributions where no income tax deduction claimed – available if total super balance < $1.7 million.

Non-concessional Contributions – Bring Forward Option $330,000 Available where person is under 75 at 1 July in year of contribution. This is the maximum amount over a 3 year period and is subject to total super balance.

General transfer balance cap $1,700,000 Maximum amount that can be converted to retirement income streams where tax on earnings is zero.

Low Rate Cap

Untaxed Plan Cap

CGT Cap $230,000

$1,650,000

$1,650,000 Taxable component (taxed element) that can be withdrawn from super tax-free between preservation age and 60. Previously known as Post 83 “tax-free” or low rate threshold.

This threshold limits the concessional tax treatment of benefits from an untaxed fund that has not been subject to contributions tax.

Lifetime limit where small business CGT concessions applied.

Employment Termination Payments (ETP):

The ETP cap amount for 2022/23 is $230,000. Therefore, the following rates will apply in the 2022/23 financial year:

Age at 30 June Amount Tax Rate *

Less than preservation age Below $230,000 Above $230,000 30% 45%

Preservation age or over Below $230,000 Above $230,000 15% 45%

* Excluding Medicare Levy of 2%

ETP Includes

Amounts for unused rostered days off

Amounts in lieu of notice

A gratuity or “golden handshake”

An employee’s invalidity payment (for permanent disability other than compensation for personal injury)

ETP Excludes

A payment for unused annual leave

A payment for unused long service leave

The tax-free part of genuine redundancy payment or early retirement scheme for those under pension age.

Certain payments after the death of an employee ETPs cannot be rolled over to superannuation.

Genuine Redundancy:

The tax-free portion of a genuine redundancy or approved early retirement scheme for 2022/23 is $11,591 plus $5,797 for every completed year of service.

Superannuation Guarantee Contribution Rates:

The superannuation guarantee contribution rate is legislated to increase to 10.5% from 1 July 2022.

The maximum SG contributions base will be $60,220 per quarter or $240,880 per annum. Employers are not required to pay SG contributions on amounts over this threshold.

Government Co-contributions:

The maximum Government co-contribution amount of $500 is available where income is less than $42,016. The higher threshold above which the co-contribution will not be paid is $57,016.

Low Income Super Tax Offset:

The Low Income Superannuation Tax Offset income threshold is $37,000 and is not indexed.

Tax on Superannuation Withdrawals (2022/23):

Component

Tax-free

Taxable - taxed element

Tax Treatment

Tax Free

Under preservation: 20% plus Medicare Preservation to 59: First $230,000 tax free and balance at 15% plus Medicare 60 and over: Tax free

Taxable - untaxed element

Under preservation: First $1,650,000 at 30% plus Medicare and balance at 45% plus Medicare Preservation to 59: First $230,000 at 15% plus Medicare, $230,000 - $1,650,000 at 30% plus Medicare and balance at 45% plus Medicare 60 and over: First $1,650,000 at 15% plus Medicare and balance at 45% plus Medicare