The OHL Wire issue 8

THE

OHL WIRE

NEWSLETTER

March 2015

8

issue page

2

THE RULES REGARDING NOT-FOR-PROFIT ORGANISATIONS

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4

RETIREMENT: WHAT ABOUT THE AGE PENSION?

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6

THE ECONOMIC EFFECTS OF THE FALLING AUSTRALIAN DOLLAR

LEGAL – WEALTH PROTECTION – INVESTMENTS – BUSINESS – LIFESTYLE – SYDNEY

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6

COMMON FINANCIAL MISTAKES SENIORS SHOULD AVOID

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7

WHAT’S ON IN SYDNEY

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more

The Rules Regarding Not-For-Profit Organisations Starting a Not-For-Profit organisation may seem a noble cause, but if you fail to take into account the legal considerations it is likely your organisation will fail and your chosen cause will suffer.

The laws surrounding the creation of Not-For-Profit organisations are complicated. Founding an organisation is not just a matter of registering your business and putting your bank details behind it; there are tax implications and a choice of legal structures to consider including incorporation and questions of insurance.

Before you jump blindly into the Not-ForProfit sector, there is much to consider.

What is a Not-For-Profit Organisation?

Your organisation may come in the form of a sports club, scholarship fund, scouts, neighbourhood association or a church association to name a few.

As per the ATO website, “a non-profit organisation is an organisation that is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.

“Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

A non-profit organisation can still make a profit, but this profit must be used to carry out its purposes and must not be distributed to owners, members or other private people.

To incorporate or not?

When you incorporate your organisation you are giving it a legal identity. With this comes the empowerment to enter into a contract, sign a lease, employ people

and sue or be sued. It also brings with it the responsibility to regularly report to state or federal government as well as the Australian Securities Commission (ASIC). The regulator you report to has responsibility for your business structure.

3. Ease of raising money The ability to raise money means you can grow and develop your business.

4. Increase your business If you are a limited business, people may perceive that you’re bigger, more To incorporate is one of the most stable and more distinguished than you important decisions you will make. actually are. Contractors may also find Incorporated groups follow a particular that some companies only do business structure, with group rules (or constitution), with incorporated companies to mitigate members, and a governing body referred liability issues. to as a board or committee.

The main thing to consider here is profit.

Those on the committee have legal duties, Becoming an incorporated association so it is important they understand the laws is not suitable for organisations that are surrounding their position. formed to, or operate mostly to, make a The laws of incorporation vary from state profit for their members. to state, so it is important to understand Know the tax implications state regulations before committing.

It is only certain types of non-profit If you choose not to incorporate you will organisations that are exempt from income not be recognised as a separate legal entity tax. Most non-profits are taxable, but may to the members associated with it. In such be entitled to special rules for calculating a case a group of people agree to act taxable income, lodging income tax together as an organisation and form an returns and special rates of tax. association. The group can remain informal This is a complicated affair and it is and its members make their own rules on recommended that any organization how the group is managed. The rules may seek out a competent accountant to also be referred to as a constitution. guide you through the infield.

There are advantages for incorporation.

Each non profit group may come under a These include: particular exemption law, so it is imperative 1. Limited Liability you know who you are, what you represent The main advantage to incorporation is and how this will affect not only the way the limited liability of the incorporated you operate but all the laws pertaining to company. Where the sole proprietor operation and tax that exist. assumes all the liability of the company, We have only covered a small portion an incorporated business means an of what to expect from a legal standpoint individual shareholder’s liability is limited when setting up a non-profit organisation. to the amount he or she has invested The biggest decision you can make is in the company. whether to exist as a non-profit organisation 2. Unlimited lifespan or not. If you do take the plunge, make sure you have all of your legal ducks in a row A corporation has an unlimited life span; before beginning operations. the corporation will continue to exist even if the shareholders die or leave the business.

The Grounds of Alexandria We found an awesome “brunch place”.

Sydney is full of competitive coffee shops and diverse cultural foods, though we found The Grounds of Alexandria to be one of the most talked about coffee shops. The Grounds hosts a coffee research and testing facility alongside their popular café in which they present coffee from all around the world throughout the year alongside a rustic, wholesome and healthy menu. The Grounds located in Alexandria Sydney, have been voted #238 of 5,423 restaurants in Sydney by TripAdvisor.

Known for their great diverse atmosphere, The Grounds is a place you definitely need to visit. Not only do they feature a restaurant, café, BBQ and a coffee

OVER 60 YEARS OF TRUSTED EXPERIENCE

shop they have a florist, petting zoo and weekend markets. There is something here for every member of the family!

a variety of arts and craft activities. The next big weekend will be April 4th and 5th; 8am - 3pm don’t miss out!

Every part of this adventure, from ordering and wandering the landscaped grounds to enjoying a meal from a wholesome and rustic menu, is quite the experience.

For all those coffee lovers out there, the grounds is a place to visit as they are highly recommended for their specialty coffee.

Helpful Tips: If you are planning on going to The Grounds on the weekend, be sure to go earlier then you wish to eat, as parking can get quite difficult. If you wish to get the full experience by sitting down for a meal, we suggest putting your name down for a table as soon as you get there as depending on how busy they are you could be up for a bit of a wait. Grab a coffee and spend your waiting time wondering The Grounds taking in the heightened atmosphere and having a look around; there’s plenty to see!

The scenery and décor is stunning and unique for a café, surrounded by outdoor carts with pastries, slices and cakes. On holiday weekends throughout the year The Grounds also features larger markets, where you are able to enjoy live music, a variety of stalls and let the kids enjoy

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RETIREMENT:

What about the Age Pension?

For many Australian seniors retirement implies meeting Age Pension criteria.

What exactly does this mean?

Let’s find out.

What is the Age Pension?

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OWEN HODGE LAWYERS

The aim of the Age Pension is to provide financial support to older Australians. In order to be eligible for the Age Pension retirees need to meet special age and residency requirements which will be explained further in this article. Pension rates are regularly updated to ensure they keep pace with inflation.

What are the requirements in order to be eligible for the Age Pension?

The Age Pension requirements are: • Age

The income test requirement Income is also one of the factors that will affect the eligibility of the applicant and the financial help that can be provided to this applicant.

People will be exempt from the income test if they are permanently blind and receive Age Pension or Disability Support Pension. Furthermore, money allowed may depend on whether the applicant is single, married etc.

Table 2 Income Requirements

• Residence

Family Situation

• Income

Maximum per Fortnight

Single

$1,868.60

The age requirement The eligibility of an applicant depends on the date of his/her birth, but also whether the applicant is male or female. The age requirement will increase on 1 July 2017 to a qualifying age of 65.5 years. After this, the age will increase by six months every two years until it reaches 67 by 1 July 2023.

Couple (combined)

$2,860.00

Illness separated (couple combined)

$3,701.20

Transitional rate pensioners - Single

$1,962.25

Transitional rate pensioners - Couple (combined)

$3,191.00

For more information about the age requirement, please read the table below:

Transitional rate pensioners - Illness separated

$3,888.50

• Assets

Table 1 Age Requirement Born

Years of Age (women)

Years of Age (men)

1 Jul 1947 - 31 Dec 1948

64.5

65

1 Jan 1949 - 30 Jun 1952

65

65

1 Jul 1952 - 31 Dec 1953

65.5

65.5

1 Jan 1954 - 30 Jun 1955

66

66

1 Jan 1954 - 30 Jun 1955

66

66

1 Jul 1955 - 31 Dec 1956

66.5

66.5

67

67

After 1 Jan 1957

*Table taken from the Department of Human Services

The residence requirement In order to be eligible for the Age Pension, you must be an Australian resident (living in Australia on a permanent basis).

New Zealand citizens are also eligible as long as they resided in Australia on 26 February 2001, or were living in the country for at least one year in the two years prior to this qualifying date.

People who have been living in Australia under a permanent visa may also be eligible for the Age Pension.

In addition to the citizenship requirement, applicants to the Age Pension must also be an Australian resident for a total of at least 10 years, with at least five of these years in one period; or have a qualifying residence exemption:

*Table taken from the Department of Human Services Payment eligibility depends on specific circumstances. This table should be understood only as a guide.

The Assets Requirement There are limits to the amount of assets you can own when receiving the Age Pension. As we saw for the income requirements mentioned above, the limit of assets depends on the status and the situation of the applicant (single, couple, couple separated by illness, or a couple where only one partner is eligible for the pension).

In addition, for every $1000 your assets (including cash, gifts, vehicles, real estate, businesses, life insurance etc.) are over the prescribed limit, your pension will be reduced by $1.50 per fortnight.

Base pensions are indexed twice a year, on 20 March and 20 September, to reflect changes in pensioners’ costs of living and wage increases.

How to apply for the Age Pension?

The results of the income and assets test will be vital to the rate of Age Pension you will receive. The Department of Human Services (DHS) makes most Age Pension payments. Once you have confirmed your eligibility, you can submit a claim up to 13 weeks before you meet the age and residence requirements necessary to obtain it. You can apply for the Age Pension at www.humanservices.gov.au/customer/enablers/centrelink/agepension/claiming

• Be a woman who is widowed in Australia when both her late partner and herself were Australian residents, and who has 2 years residence immediately before the claim.

• Be receiving Widow B Pension, Widow Allowance or Partner Allowance immediately before reaching pension age.

• Are a refugee or former refugee

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The Economic Effects of the Falli ng Australian Dollar The instability of global economies including those of America and certain European countries has had little effect on Australian business and consumer behaviour. The Australian economy has proven to be relatively stable despite the economic downturn and the effects of the Global Financial Crisis. However as the value of the Australian dollar declines, questions are being posed with regard to the diminishing strength of the Australian economy.

The old adage that “what goes up must come down” is as applicable to the Australian dollar as it is to a hotel elevator.

While we have benefited from a strong dollar in recent times, as a result of the strengthening US economy (amongst other things), it is Australia’s turn to take a tumble.

The Australian Dollar is trading at 0.77 USD, a six-year low and a significant decline when the previous period of near parity

is taken into consideration. Being aware of the weak Australian dollar is one thing; understanding the impact that it potentially has on the Australian economy, on your business, or on you personally, is another.

This raises the obvious question: what are the consequences of the fall in the value of the Australian dollar?

The primary disadvantage is the rise in price for internationally sourced commodities.

The Australian dollar now buys less in foreign markets than it did during the parity years. Prices for imported goods, services, and materials have increased and are passed on to the consumer. Additionally, e-commerce with international markets becomes less affordable. Yet, this fall in the Australian dollar does present economic advantages. The increased price of imported goods will ensure that domestic commodities are more affordable. As affordability increases, so too does demand for Australian goods and services. This produces several positive flow-on effects.

Australia’s domestically produced goods seem more attractive and affordable to international buyers. With the current exchange (US$1000 will buy AU$1300), the Australian export industry is at an advantage. So too is the tourism industry and associated service industries including pubs, clubs, restaurants, cafes, theme parks and more. When Australia becomes an affordable place, associated industries profit.

The depreciation of the Australian dollar does cause certain negative outcomes, however, the Australian economy is likely to benefit long-term. The past several years has thrown economic obstacles in the path of Australia’s exporters, yet we should now see the industry revitalise itself. The domestic market will offer more incentive for Australians to keep their money within the country, and entice foreign investors to capitalise on the currency exchange.

In many ways, the depreciation of the Australian dollar should provide a boom for the broader Australian economy.

A stronger domestic market creates an increase in job opportunities. Furthermore,

Common Financial Mistakes Seniors Should Avoid Just like anyone, seniors and those who are looking to retire are capable of making financial mistakes that can have a devastating and lasting impact on their financial well being. Financial planning could mean the difference between enjoying freedom and independence during retirement, or years of dependence and penny pinching.

Being lured into a scam Scams are frequently operated these days as more con artists are seeking to take advantage of the elderly, being perceived as more vulnerable than other targets. If you become suspicious, the best thing you can do is to report it. To avoid being targeted, try to stay up-to-date with the latest scams. The last thing you want to do is to be battling a fraud case in court, because legal fees can easily jump high quickly.

Common financial mistakes made by seniors that should be avoided: Limiting your coverage These funds are highly important to your future, however when money starts to run low, seniors seek to cut back their insurance as a means of saving money.

Having insufficient long and short term plans With the economy and inflation changing regularly it’s hard to know when you are going to need your finances the most.

Having a concrete plan can protect you from fluctuations in the economy and

PAGE 6

from spending too much of your savings at once.

Replacing financial advisors with family members Yes it’s great to have family members help you out and give you advice, but it’s also important to check with a financial expert.

If you haven’t yet made a plan for your future, then now’s the time to do so.

Don’t leave it till it’s too late, enjoy your retirement.

OWEN HODGE LAWYERS

What’s On in Sydney 19 MARCH - 21 MARCH

14 MARCH - 10 MAY

24 MARCH & 27 MARCH

Future Senior/Former Youth 1300 241 167 Bondi Pavilion Theatre hosts an exciting, contemporary performance about life, loss, love, tea and Twitter from the perspectives of the young and old.

Culture Beats 2015 The celebration of Australia’s cultural diversity, showcasing the exotic flavours, dance, music and art of a variety of nations. Located in Darling Harbour.

John Knowles Storytiller Hosted by the Laugh Stand at Harold Park Hotel, John Knowles details his bizarre family stories he has accumulated over the years. A follow up to his award winning show, Saddle Sore.

www.kidspot.com.au/thingstodo/darling-harbourculture-beats-2015/nsw-sydney/58812.htm

www.sydneycomedyfest.com.au/singleevent?show_id=963

26 MARCH - 8 APRIL

29 MARCH

3 APRIL- 5 APRIL

Royal Easter Show (02) 9704 1000 Located at the Sydney Show ground, the annual event gives you the chance to enjoy animal experiences, entertainment, carnival fun, shopping, and much more!

Bobbin Head Cycle Classic 0418 116 554 An annual cycling event suited to all levels of ability hosted by Rotary. The ride takes in some of the most beautiful scenery on Sydney’s North Shore.

Devinne Food and Wine Festival (02) 4733 2411 A festival celebrating the finest and freshest foods, accompanied with a large range of wine, liqueur and ales to enrich the senses. Taking place in Penrith South, on Mulgoa Road.

2 APRIL - 3 MAY

4 APRIL

17 APRIL

Darling Harbour Commemorates The Anzac Centenary Leading artists from Europe and Australia have joined to create interactive and thought provoking artwork to commemorate the ANZAC centenary. The unveiling takes place at Cockle Bay.

The Championships Day 1 Randwick Racecourse plays host to one of Australia’s biggest international race days, with four group 1 races on show.

Botanica: The Birds and The Bees Opening Night Enjoy a drink and some canapés in the Gardens of Lion Gate Lodge whilst browsing art from some of Australia’s leading botanical artists.

www.sydney.com/events/darling-harbourcommemorates-the-anzac-centenary

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www.australianturfclub.com.au/autumnracing/ championshipsday1.html#&panel1-1&panel2-1

www.whatsonsydney.com/eventdetails. aspx/28155/botanica--the-birds-and-the-beesopening-night

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INDIVIDUAL AND COMMERCIAL LAW SPECIALISTS Enhancing the lives of our clients by providing for their financial and legal requirements in the acquisition of wealth, protection and management of assets and the transfer of wealth throughout generations.

CALL 1800 770 780 VIEW www.owenhodge.com.au VISIT Sydney Office Level 3, 171 Clarence Street, Sydney NSW 2000 Hurstville Office Ormonde Parade, Hurstville NSW 2220