The OHL Wire - ISSUE 9

April 2015

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WHAT’S NEW ON THE LEGAL HORIZON IN 2015

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WORKPLACE INJURIES AND THE OLDER WORKFORCE IN NSW

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UNDERSTANDING LIVING TRUSTS

LEGAL - WEALTH PROTECTION - INVESTMENT - BUSINESS - LIFESTYLE - SYDNEY

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5 KEY CHANGES UNDER PROPOSED MANAGED INVESTMENT TRUST TAX SYSTEM

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WHAT’S ON IN SYDNEY

What’s New On the Legal Horizon In

2 0 1 5 Let’s find out.

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OWEN HODGE LAWYERS

The New Year rang in some legal changes affecting the business and personal lives of a wide variety of Australians from home renovators to plant breeders, sun worshippers and those with the audacity to fall in love extraterritorially. But the changes that will affect the greatest number of people are those that may diminish the value of pension income or call for some new retirement investment calculations.

The Relative Merits of Super + Centrelink vs. Centrelink + Discounts Going forward from January 1, new Commonwealth Seniors Health Card holders will be subject to a far stricter income test that will include assessments of non-taxable superannuation income. The change has to do with new assumptions about earnings to be expected from super funds.

New pensioners who draw income from a super in addition to a Centrelink Pension may find it more difficult to qualify for the card, which provides holders with discounts for services including medical expenses and public transport.

Even for those not immediately contemplating retirement, this change may make a difference in retirement investment strategy. It is never too soon to sit down with a financial advisor to re-calibrate, now that super income may disqualify you for other entitlements.

Disability Support Pension Changes

The new laws also clarify what constitute a major defect, covered by a 6-year warranty, and what constitute a general defect, covered by only the standard 2-year warranty.

In addition, builders will be able to request only a maximum 10 percent deposit for all projects, regardless of the value. A progress payment schedule and a termination clause will be required for contracts worth more than $20,000.

The mandatory consumer building guide, to be provided to consumers before entering a contract, also has been simplified.

Big Changes in IP Law As of August 25, 2015, patents holders may have an easier time of it. Australian medicine producers will be permitted to manufacture and export patented pharmaceuticals to countries experiencing health crises. In addition, plant breeders will have a cost-effective means for protecting their rights in the Federal Circuit Court.

Further, a single patent attorney regime and a single patent application and examination process should strengthen ties between Australia and New Zealand as intended by the Single Economic Market Agenda.

Managed Investment Trusts

Recipients of Disability Support Pensions now must be examined and assessed by a government doctor, rather than a personal physician, and will have payments cancelled if they travel overseas for longer than four weeks, a reduction from the previous limit of six weeks.

Still under discussion is a new tax system for managed investment trusts, designed to modernise the tax rules and increase certainty for investors. The proposed rules are intended to enhance the international competitiveness of Australian managed funds and promote the greater export of Australia’s funds management expertise. New rules are still in a proposed stage.

Home Renovators Take Heart – Contractors Take Heed

Lifestyle Law and Other Oddments

The new laws are intended to modernise industry practices, reduce red tape and support consumer confidence and building activity across NSW. In some situations these also shift risk from the consumer to industry professionals.

The threshold for requiring a licence for building and general trade work has risen from more than $1,000 worth of work to more than $5,000. Plumbing, electrical and air conditioning work still needs a licence regardless of cost. Stand-alone contracts for internal paintwork as well as work related to tennis courts, ponds and water features no longer need a licence.

Owner-builders now are required to name all other owners of the land on an application for an owner-builder permit. In addition, the threshold for requiring an owner-builder permit has increased to work valued at more than $10,000. All owner-builders must have completed basic work health and safety training, and for work over $20,000 they will need to have completed an owner-builder course.

OVER 60 YEARS OF TRUSTED EXPERIENCE

Bringing your spouse or significant other to Australia from overseas now will cost up to $6,865 for the visa permitting him or her to live or work legally in the country. A revenue raiser, this is a 50 percent increase over 2014 fees. Solariums, as you may have noticed, closed in New South Wales as of December 31, 2014, after years of lobbying by health care advocates.

However, spray-tanning is still an option.

Residents of NSW still can access national parks for their genuine sunshine needs, as long as they don’t smoke there.

The ban is intended to reduce the risk of accidental bushfires and littering. It will apply to picnic areas, campgrounds, accommodations, beaches, lookouts, walking tracks and on national park roads.

Individuals investing for retirement should be mindful of the shifting legal landscape, as should homeowners performing renovations, business people involved in the construction and pharmaceutical industries and anyone for whom intellectual property is an important business asset.

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Workplace Injuries and the Older Workforce in NSW An increasing number of Australians are working beyond the age of 65. If you are an older worker in NSW, it is important you understand what you are entitled to in the workplace. Likewise, if you are a business owner in NSW, you need to equip yourself with information on how to provide for your aging workforce.

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OWEN HODGE LAWYERS

Your rights as an injured worker Your rights as an injured worker in Australia are established and protected. You have, for example, the right to choose your own doctor, treatment or rehabilitation provider after an injury, the right to choose your own lawyer and the right to have yourunion assist you with your claim’s progress and with issues about returning to work.

Insurance companies must tell you within 7 days after initial notification whether they will start compensation payouts and, if yes, pay those benefits promptly.

Current schemes and their inadequacies Australia has 11 workers compensation schemes, one operating in each State and Territory, and three Commonwealth schemes. In NSW, for example, the WorkCover Authority of NSW is responsible for administering the scheme under workplace health and safety laws.

In most States and Territories (NSW included), workers compensation age limits are inconsistent with the government’s intention to encourage older workers to remain in the workforce. The pension age is set to rise to 67 but workers compensation schemes have limited coverage for people over the age of 65. Due to this age limit criteria, workers beyond the stipulated age are not covered by the scheme’s income replacement component. While they may be covered for medical expenses, this is pointless as without income replacement, most workers would be forced to retire.

How businesses can help older workers There are several benefits of supporting older workers.

Not only will you as a business retain experienced employees, corporate knowledge and have a workforce that requires less supervision, other benefits include reduced training expenses, increased productivity and reliability.

It also does not cost you any more to cover older workers for workers compensation. Premiums are based on the remuneration paid to your workforce and are not related to the age of your workers.

However, by retaining and hiring older workers, you need to be aware of “added” responsibilities and obligations. In NSW, the WorkCover Authority prepares codes of practice for particular industries and investigates reports of unsafe practices in particular workplaces. WorkCover inspectors can forcibly enter places of work, take objects, and require information from people in charge of particular places of work.

OVER 60 YEARS OF TRUSTED EXPERIENCE

Upon conclusion of an investigation, the WorkCover Authority may direct businesses to improve their occupational health and safety practices, or refrain them from authorising certain work. This may impact on your business.

Thus, for older workers specifically, there is a need to identify, develop and implement strategies to help them maintain good health and productivity and manage with modern technologies and procedures.

Some practical suggestions include: • Adapt duties to suit older workers needs and abilities • Frequently rotate physically demanding tasks • Provide ergonomically designed solutions in all work areas • Assess workers’ stress levels and implement stress management training if required • Generate self-esteem and self-confidence • Train workers in injury prevention strategies • Ensure lighting is adequate so vision is not compromised or strained • Arrange for proper equipment, devices and tools according to job needs • Consider physical accessibility and issues such as noise reduction • Offer flexible work arrangements • Implement and revise workplace injury management procedures

Positive steps?

In 2011, Australia’s Productivity Commission recommended establishing two schemes, the National Disability Insurance Scheme (NDIS) and the National Injury Insurance Scheme (NIIS).

DisabilityCare Australia, formerly known as NDIS, is intended to be a national scheme that provides lifetime care and support for all Australians with significant and permanent disability. The NIIS is envisaged as a federated model of separate, state-based, no-fault schemes providing lifetime care and support to workers with catastrophic injuries from an accident. The intention is that by covering both disabilities and catastrophic injuries, no eligible worker in need of support will fall through the gaps.

It should be remembered a workers' compensation schemes’ main purpose should be supporting injured workers return to work by encouraging businesses to make alternative duties or changes in duties to help their recovery in the workplace.

When older Australian workers are valued and well-looked after, the Australian economy will benefit as well.

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Understanding

Living Trusts As you get older, it is natural to worry about what will happen to your property, assets, cash and other family valuables after you pass away. Living Trusts allow you to give your assets to your loved ones with a minimum amount of legal fees, a minimum amount of delay and a maximum amount of privacy.

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OWEN HODGE LAWYERS

Trusts are valid legal arrangements where an individual (known as the ‘trustee’) controls property given by another person (known as the ‘settlor’, ‘grantor’ or ‘trustor) for the benefit of someone else (known as a ‘beneficiary).

Any omitted assets can be transferred into the trust at the time of death by using what is known as a simple Pour-over Will. You always should make a Pour-over Will when you establish your trust.

Many couples act as ‘co-settlors’ to their trusts. Some settlors opt to remain trustees as long as they remain competent during their lifetime following which they name professional trustees, banks or other fiduciaries to manage their assets. The term “living” was coined to refer to the fact these trusts take effect during the settlor’s lifetime.

Do I need a lawyer to prepare a Living Trust?

Living Trusts typically are ‘revocable’, meaning you can keep control over the trust at all times. You can change trust terms, change trustees, change the terms affecting the beneficiaries or even choose to end the trust if you like.

How do Living Trusts differ from other instruments?

A Will, by contrast, is a legal document giving direction about how you want to distribute your property after your death.

Living Trusts should also not be confused with Living Wills, which are documents expressing your wishes about being kept alive if you become terminally ill or seriously incapacitated.

What are the key advantages of Living Trusts?

The key advantage of a Living Trust is you can make it easier to avoid the delays and costs that sometimes arise in probate. This is because property transferred into a Living Trust before death does not go through probate. Probate is the legal process that involves filing a Will with the probate court, taking inventory of the person’s property, paying all legal debts, and distributing the remaining assets and property.

Creating Living Trusts also allows you to protect your assets for certain vulnerable classes of beneficiaries who are not able to handle inheritance. They include minor children, adult children who may squander and waste the assets, spendthrift beneficiaries, those in broken relationships, those who may be going through bankruptcy or loved ones who are just too frail and incapacitated to manage property on their own.

In Australia, Living Trusts also are created to shelter the assets of the settlor from creditors and taxes.

Do I have to put a lot of money in a Living Trust at the start?

It is possible to fund your trust with as little or as much of every asset you own. Most settlors begin by contributing a small amount of personal property, real property or money to the trust and gradually increasing their contributions over the years. Assets can be sold to the trust using a written bill of sale.

To ensure the trust is well funded, a document stating you forgive the trust’s debts to you should be written out and, signed and with a copy sent to the trustees.

OWEN HODGE LAWYERS - OVER 60 YEARS OF TRUSTED EXPERIENCES

Yes, you do. Be cautious about using generic or online Living Trust kits that claim to be customised documents prepared by lawyers. These kits usually are not a good idea because they are not designed for your unique needs. A few high quality products are available, but many are expensive and may not cover you adequately.

Once a Living Trust is prepared, it is not essential to see your lawyer every time your assets change. Common events that should prompt you to review and revise your trust document include (but are not limited to) marriage, divorce, birth in the family, death in the family, purchase of new real estate, refinancing of existing real estate, change in the tax laws relevant to your trust and significant increases in your assets. Except for these events, you may only need to review your trust documents every three to five years.

When will a Living Trust end?

This happens when you die. Your revocable Living Trust ends, but it still plays a role in settling your affairs.

At the time of death, your trust becomes irrevocable and its terms focus on managing and distributing your assets.

Your co-trustee or your alternate/nominated trustee steps up and carries out the trust’s terms. Your Pour-over Will will direct how property not yet included in the trust, and other matters, such as naming children’s guardians, are handled.

From there, the Living Trust keeps your estate plans private, unlike your Will, which is entered into court records. The trust can continue for a number of years, giving the means to manage assets for your loved ones, and finally to distribute those assets according to your wishes.

Is a Living Trust right for you?

It has been acknowledged Living Trusts may not be suitable for everyone. Weigh all the advantages and disadvantages.

At times, you may need a combination of different instruments. You would be best off discussing your entire estate planning needs with a legal adviser and not leave the decision till too late.

At Owen Hodge Lawyers we would welcome the opportunity to help you craft a plan accurately reflecting your intentions and protecting the people you love.

Call us at 1800 770 780 to schedule a consultation with our experienced estate planning lawyers.

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5 Key Changes under Proposed Managed Investment Trust Tax System Eligible managed investment trusts soon may be taxed under a new system. If you are a trustee, financial professional, investor or business owner, here are the five key changes you can expect under the new MIT tax system.

1. A new attribution model will be used to determine MIT holders’ liabilities.

As the money passes through the managed investment trusts to individual trust members, the new attribution model will allow the money to retain its tax character.

2. Understatements and overstatements of taxable income now can be carried forward. This means there is no more need to re-issue investor statements when understatements or overstatements occur.

3. The MITs now can be deemed fixed trusts for income tax purposes, as long as the MITs have clearly defined rights.

This is one of the most substantial and important shifts because it clarifies the complicated question of whether fixed trust rules will apply to the MIT. 4. Double taxation is addressed with upward cost base adjustments.

5. More clarity on how tax deferred distributions should be treated. The proposed changes provide legislative certainty about how tax deferred attributions are treated for tax purposes.

These changes are part of a broad new taxing system proposed for attribution managed trusts (A-MITs). The new taxing system would apply to all MITs that fall under a broadened definition of MIT. Any MITs that have clearly defined interests related to income will be subject to the new tax treatment.

The draft legislation explaining the proposed tax treatment of MITs was introduced on Tuesday, April 9 and, if the changes go through, could be one of the greatest tax reforms since the taxing system was revised to require capital gains tax. Industry stakeholders contributed to drafting the new rules. The goal is making Australian managed investment funds significantly more competitive worldwide.

The Treasury took comments on the changes until Tuesday, 23 April and the comment period now is closed.

The only thing left for investors and financial professionals to do is watch and wait and see if the important modifications to the taxing scheme actually occur.

Avoiding Medicare Scams: How and Why In Australia, more than 344 million Medicare transactions take place each year. While most of these transactions are for legitimate medical care, some are fraudulent. In fact, in 2014, more than 1,116 tip-offs of potential Medicare fraud were made to the federal government. Fraud may be committed by doctors, but individual Medicare patients also could become unwitting partners in a Medicare fraud scheme if their personal information is misused. You need to protect yourself. Here are five ways to secure your info and reduce the chances of becoming a Medicare fraud victim: 1. Protect your personal information.

Your Medicare card should be kept at a safe place in your home so no one can access it without your authorization. If there is paperwork with your Medicare number on it, you should shred it instead of throwing it into the trash. Don’t give out your Medicare information to people you do not know and guard the information about your Medicare membership number carefully.

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2. Be careful when providing details on your Medicare number over the phone.

Do not leave your Medicare number on a recorded phone message and don’t give out the number over the phone unless you initiated the conversation and know who you are speaking to. Some fraud scams involve people contacting you and claiming they need to verify your Medicare information but, when you give out your number, it could be to someone who wants to misuse it.

3. Don’t carry your Medicare card unless you are going to need it.

If your wallet is lost or stolen, someone could get ahold of the card and your Medicare info could be used as part of a Medicare scam. Carrying the card with you also increases the chances the card will get lost or fall into the wrong hands. Your card is safest in a secure place in your home unless you are going to get healthcare services.

4. Watch out for incentives that seem too good to be true.

Some unscrupulous medical care providers also offer you “free” services so they can get ahold of your Medicare number and bill the government. You should only give out your Medicare info to a doctor you know when you get medical services you seek out.

Don’t be enticed by incentives that simply could be scams.

5. Keep track of the medical care you receive. You should take note of the types of medical services you receive and the dates you receive treatments.

Then you can review a summary of the services that Medicare was billed for and compare that to your own records.

If you see services you did not receive, this can be a red flag that your Medicare information is being misused and you are the fraud victim.

OWEN HODGE LAWYERS

What’s On in Sydney Sydney Writers’ Festival

Vivid Sydney 2015

The Descendants Project

18th May till 24th May Pier 2, Walsh Bay, 13 Hickson Rd Sydney (02) 9252 7729

22th May till 8 June Sydney CBD, George St Sydney (02) 9931 1111

16th April till 3 May The Rocks Discovery Museum www.descendantsproject.com.au

Australia’s largest celebration of literature, stories and returns 18-24 May! The theme of the 2015 Festival is How to Live? 400 writers will help us make sense of the world, exploring ideas of happiness, grief, spirituality, ageing and mortality.

Vivid Sydney is an 18 day festival of light, music and ideas - the largest of its kind in Australia and in the Southern Hemisphere.

Come along and check out some amazing installations and projections transform Sydney’s architecture and open spaces.

Turkish-Australian artist Mertim Gokalp presents 20 portraits in total: 10 ANZAC and 10 Turkish Gallipoli war descendants.

The artist addresses mutual understanding and promotion of peace between the nations.

10 Days of Wine, Food and Art

Head On Photo Festival

The Australian Ballet: The Dream

15th May till 24th May Pirrama Park, Pirrama Road Pyrmont 0410 338 331 Free Admission

2 May till 10 May Sydney Town Hall, 483 George St (cnr Druitt St) Sydney www.headon.com.au

29th April till 16 May Sydney Opera House, Bennelong Point Circular Quay www. australianballet.com.au/wh

A 10 day festival showcasing more than 50 restaurants, wine bars, hotels, winemakers and artists from Pyrmont and the Mudgee Region. Don’t miss out.

Head On is bigger and better than ever.

With 9 incredible exhibitions hand picked

by Festival Director Moshe Rosenzveig from across the globe, the Festival Hub captures the photographic world at it’s most diverse and cutting edge.

The Australian Ballet’s The Dream is one of the greatest spectacles of dance you’ll see all year. Experience the physicality and musicality of ballet in three works by the great 20th century English choreographer Frederick Ashton.

Winter Safety Tips: Staying Healthy and Happy in the Cold

Winter is fast approaching and that means new risks both indoors and out. Here are six tips for staying happy and healthy even in the chilliest of weather.

1. Keep an eye on the weather reports: When bad weather is coming, think carefully about whether you should drive or engage in outdoor activities such as skiing.

2. Get your vaccinations. An annual vaccination can help prevent a serious flu that could keep you laid up for weeks.

4. Eat healthy and keep hydrated. Fresh fruits and veggies can be harder to find in the winter but they keep your immune system strong and your body healthy.

Drinking plenty of water also can help you stay hydrated.

5. Stay active… safely. About 30 minutes of daily exercise can help you stay healthy and energetic even when you can’t spend a lot of time outdoors.

With these tips, you can enjoy winter and stay happy, healthy and safe until spring arrives again!

3. Make sure your house is fire-safe. Spending long winter days indoors in front of a roaring fire (or with a heater going full blast) is a great way to stay comfortable… but it increases the risk of fire. If you use a fireplace, be sure to use a screen and make sure the chimney is clean. Test any electric blanket before putting it on the bed by checking for a frayed cord and setting the blanket atop the bed and watching it for a OVER 60 YEARS OF TRUSTED EXPERIENCE

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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 Level 2, 12-14 Ormonde Parade, Hurstville nsw 2220