Announcements

2010 Budget Highlights

The Treasurer has handed down the 2010/11 Federal Budget.

Following, are SEVEN of the key changes to tax and superannuation that may impact you:

The low income Medicare levy threshold will increase to $18,488 (up from $17,794) for individuals and $31,196 (up from $30,205) for couples. This will apply to incomes in the 2009-10 income year.
From 1 July 2010, the Low Income Tax Offset will increase to $1,500 (up from $1,350).
From 1 July 2011, individuals will receive a 50% tax discount on up to $1,000 of interest earned, including interest earned on bank, building society or credit union deposits, bonds, debentures and annuity products. The discount is to be available for interest income earned directly by an individual as well as indirectly through a trust or managed investment scheme.
Instead of claiming work-related expenses and the cost of managing tax affairs, individuals will have the option of claiming a standard deduction in their tax returns of $500 for the 2012-13 tax return and $1,000 for the 2013-14 tax return.
The threshold above which a taxpayer may claim the 20% net medical expenses offset will increase from $1,500 to $2,000 from 1 July 2010.
The Government Co-contribution will remain at 100% on a maximum of $1,000 of an individual’s eligible personal non-concessional superannuation contributions. (The rate was to otherwise increase from 1 July 2010).
The Government will provide a $500 annual superannuation contribution to individuals with an adjusted taxable income up to $37,000.

Bank Fees - Class Action Against Banks

IMF Australia, Australia's largest and most successful litigation funder, have recently announced they will pay for more than 10 large scale class actions against the banks to make them repay all the exception fees (eg late and penalty fees) they have deducted from their customers over the last six years, plus interest. IMF Australia believes the exception fees banks charge to their customers are excessive when compared to the actual cost to the banks for late payments, overdrawn accounts etc. Some banks have admitted that between 67 and 70 cents in every dollar earned from exception fees was pure profit.

Banks targeted are the big four plus Bank of Queensland, Bendigo and Adelaide Bank, Suncorp, HSBC and Citibank.

IMF believes each person could pocket around $2000, and each business approximately $5000. If the action is successful, IMF will take a 25% cut of payments, and if it loses, nothing.

Exception fees typically include four types of penalties:

Honour fees (generally a penalty fee of $40 incurred when a customer overdraws on a bank account or exceed an agreed overdraft limit and the bank pays it out)
Dishonour fees for cheques that bounce
Late payment fees for credit cards or loan accounts
Fees for overdrawing on a credit card

These fees typically range between $25 and $60 on each transaction. The Reserve Bank revealed last year that banks charged "exception fees" of almost $1.2 billion in the 2008 financial year.

For more information and to register, visit www.financialredress.com.au

2009 Budget Highlights

The Federal Budget handed down on 12 May 2009 contained a number of changes to taxation, superannuation and government pension benefits.

Here are TEN highlights of the tax and superannuation changes announced in the Budget:

The annual cap for concessional superannuation contributions has been halved from $50,000 to $25,000, and the transitional concessional contributions cap has been reduced to $50,000 per year from its former annual limit of $100,000.
The superannuation co-contribution scheme will be reduced to a rate of 100% for contributed amounts for the 2009/10, 2010/11 and 2011/12 years, increasing to 125% for the 2012/13 and 2013/14 years and returning to 150% for the 2014/15 year.
From 1 July 2010, the government will introduce three new “Private Health Insurance Tiers” in respect of the Private Health Insurance Rebate.
From the 2008/09 year, the Medicare levy low-income thresholds will be increased to $17,794 for individuals and $30,025 for individuals in families.
The First Home Owner’s Boost will be extended for an extra six months.
A Paid Parental Leave scheme will be available to parents for births and adoptions that occur on or after 1 January 2011.
A bonus deduction of 50 per cent will be available to small businesses that acquire an eligible asset between 13 December 2008 and 31 December 2009 and install it ready for use by 31 December 2010.
The government will provide $595.2m over four years to help businesses remain viable in the face of the global recession, to tackle emerging revenue risks and promote community confidence in the tax system.
The age pension age will be gradually increased to 67 years of age.
The minimum drawdown amount for account-based pensions will be halved for the 2009/10 income year.

Household Stimulus Package

The Government has announced a $42 billion economic stimulus package to help Australia counter the global economic crisis.

Please phone Financial Dynamics on 44 212345 to arrange an appointment to have your return completed or to discuss details in relation to how the package affects you.

Some of the key features of the package include a:

$900 Tax Bonus for Working Australians
$900 Single-Income Family Bonus
$950 Back to School Bonus
Training and Learning Bonus

To receive the Working Australian bonus in the first round of payments planned for April 2009, taxpayers must lodge their tax returns for the 2007-08 financial year as soon as possible.

Features of the Household Stimulus Package:

$900 Tax Bonus for Working Australians

The Government will provide a tax bonus of:

$900 to eligible taxpayers with a taxable income up to and including $80,000;
$600 to eligible taxpayers with income exceeding $80,000 to $90,000;
$250 to eligible taxpayers with income exceeding $90,000 to and including $100,000.

The bonus will be available to Australian resident taxpayers who paid net tax in the 2007‑08 financial year.

Taxpayers will not need to apply for the payment. The Australian Taxation Office will make the payment to taxpayers after determining eligibility for the 2007‑08 financial year.

Taxpayers must lodge their tax returns for the 2007‑08 financial year by 30 June 2009 to be eligible.

$900 Single-Income Family Bonus

The Government is providing additional financial assistance to families who rely one main income earner. This includes, sole parent families and two‑parent families where one parent chooses to stay at home or balance some paid work with caring for children.

The Bonus will be a one‑off payment of $900 per family to every family entitled to Family Tax Benefit Part B (FTB‑B), irrespective of the number of children. The one‑off payment will be made in the fortnight commencing 11 March 2009 for families who receive their family assistance as fortnightly instalments.

$950 Back to School Bonus

The package includes help for families with the costs of education in the 2009 academic year.

Families with children of school age eligible for FTB‑A on 3 February 2009 (or who are subsequently determined to be entitled to receive FTB‑A on 3 February 2009) will receive a one‑off lump sum payment of $950 for each eligible school aged child (aged 4 to 18 on 3February 2009).

Families with dependents in receipt of Youth Allowance (students and apprentices), Austudy or ABSTUDY will receive the Training and Learning Bonus.

Families with a dependent full-time student aged 21 to 24 years that are eligible to receive FTB‑A on the date of announcement (or who were subsequently determined to be entitled to receive FTB‑A on the date of announcement) will be eligible for the Training and Learning Bonus.

Qualifying full-time students aged 19 or 20 will not receive the Back to School Bonus or the Training and Learning Bonus, but will be eligible to receive a $950 payment through an administrative scheme.

Training and Learning Bonus

The Training and Learning Bonus provides a one‑off bonus to eligible student social security recipients to assist with the costs for the 2009 academic year.

This will cover students undertaking approved courses that generally include secondary education courses, undergraduate courses, associate diplomas and some other diplomas, TAFE courses and some postgraduate courses.

For further information concerning the Government’s Household Stimulus Package, please click here.

Economic Security Strategy - Financial assistance for Australians

The Economic Security Strategy is offering immediate support for many Australians in response to the global financial crisis.

From 8 to 19 December 2008, pensioners, families, seniors, people with disability, carers and veterans will be provided with financial assistance through the lump sum Economic Security Strategy payment. This payment builds on existing support measures, recognising that many people require immediate assistance to help them meet their needs.

Are you eligible for a lump sum payment ?

Payments for pensioners, seniors, people with disability, carers and veterans -

If you received an eligible pension or allowance, or held an eligible concession card on 14 October 2008, you will receive a lump sum payment of:

- $1,400 if you are single or

- $1,050 for each eligible member of a couple.

- If you were entitled to Carer Allowance on 14 October 2008, you will receive $1,000 for each eligible person in your care. If you are sharing care with another person the payment will be based on the percentage of care provided.

Payments to families -

Families will be eligible for the lump sum payment if, on 14 October 2008, they:

- were entitled to Family Tax Benefit Part A (FTB Part A) or

- had a dependent child/children enabling them to receive: Youth Allowance, ABSTUDY Living Allowance or an education allowance under the Veterans' Children Education Scheme or the Military Rehabilitation and Compensation Act Education and Training Scheme and who did not receive FTB Part A

Families will receive $1,000 for each eligible child in their care.

Changes to Family Assistance Claims

As announced in the 2009 Federal budget, new legislation has been introduced to make Family Tax Benefit (FTB) no longer payable through the Australian Taxation Office (ATO) from 1 July 2009.

What does this mean for you?

This means the way you claim FTB has changed from 1 July 2009 onwards. This includes claims for the 2008-09 financial year. The changes are:

You will no longer be able to claim a lump sum payment for the FTB through the ATO when you lodge your tax return.
FTB top-up payments will not be included on your Taxation Notice of Assessment

How to claim for the 2008-09 financial year

You have two options for claiming FTB through Medicare or Centrelink:

1. Lodge a lump sum claim after the end of the financial year for the 2008-09 year. It is important to remember you will not receive any payment until you and/or your partner have lodged your Income Tax Return for the same financial year as the claim.

2. Lodge a claim for fortnightly payments, based on an estimate of your income.

You can do this online at www.familyassist.gov.au or by lodging a paper claim form in person at a Medicare or a Centrelink Office.

Information you should know

If you have not previously claimed a payment through Medicare or Centrelink, you may need to:

verify your residency, and;

provide proof of birth for any children not previously claimed through Medicare or Centrelink.