The start of a new year is a great time to review your finances. Here are some recent changes and new opportunities to consider in 2019 and beyond.
First home deposit
Voluntary super contributions made since 1 July 2017, may now be withdrawn to buy a first home under the First Home Super Saver Scheme (FHSSS). The FHSSS allows eligible first home buyers to save their deposit in the concessionally taxed super environment.
HECS and HELP debts
From 1 July 2019, students and graduates who earn $45,881 pa or more will need to start repaying their HECS and HELP debts. Currently, repayments don’t need to be made until $51,957 pa or more is earned. Repayment rates will also change and a lifetime debt limit will be introduced.
Instant asset write-offs
Small business owners may be able to claim an immediate tax deduction of up to $20,000 when purchasing certain assets before 30 June 2019. From 1 July, the claimable amount will reduce to $1,000.
Catch-up super contributions
Super fund members, who make concessional contributions of less than the cap of $25,000 in 2018/19, may be able to contribute more than the cap amount in 2019/20 and beyond. This could enable ‘catch-up’ super contributions to be made in future financial years. Concessional contributions include all employer contributions (super guarantee and salary sacrifice), personal contributions claimed as a tax deduction and certain other amounts.
Super work test exemption
The Government has released regulations to allow retirees aged 65 to 74 with ‘total super balances’ below $300,000 to make voluntary super contributions in the first year they don’t meet the ‘work test’ from 1 July 2019. This measure gives eligible recent retirees more time to make super contributions before they become ineligible. Currently, 65 to 74 year olds need to have worked at least 40 hours in 30 consecutive days in a financial year to be able to contribute to super.
Downsizer contributions
Super fund members aged 65 or over may be able to contribute up to $300,000 per person to super from the sale of their home after 1 July 2018 if they meet certain conditions. These ‘downsizer’ contributions don’t count towards the concessional and non-concessional contribution caps and can be made without needing to meet the usual age, work and other contribution tests.
Tax offset for aged care costs
For the 2019/20 and subsequent financial years, aged care residents will no longer be able to claim a portion of certain care costs (such as daily care fees and means-test fees) as a tax offset when they complete their tax return. This could increase the income tax payable by some aged care residents.
Need help?
We can help assess whether any of these opportunities suit your needs and situation and make suitable adjustments to your financial plans.
