Newsletter – May 2014 Budget Update

Budgets and Financial Plans

2014 FEDERAL BUDGET SUMMARY

The Federal Budget affects different people in different ways. How we interact with these changes vary and have a greater impact on some, whilst may not affect others at all.

 

The key initiatives in this year’s Federal Budget include:

  1. A Temporary Budget Repair Levy of 2% will be payable on taxable incomes over $180,000 pa for the next three financial years.
  2. The levy will increase the Fringe Benefits Tax rate to 49% (up from 47%) for three years, starting on 1 April 2015.
  3. Changes to Higher Education debts will increase the amount payable and payments will be made at lower income levels.
  4. The income thresholds determining the Private Health Insurance Rebate and Medicare Levy Surcharge will not be indexed for three years, starting on 1 July 2015.
  5. The Dependent Spouse and Mature Age Worker Tax Offsets will be abolished from 1 July 2014.
  6. People who make non-concessional super contributions from 1 July 2013 that exceed the cap will have the option to withdraw the excess amount plus earnings on the excess, without penalty.
  7. The timeframe for increasing the Superannuation Guarantee contribution rate to 12% will be amended (9.50% from 01/07/14 for the next three years).
  8. The Age Pension age will gradually increase to 70 (by 2035).
  9. The deeming thresholds will reduce from 20 September 2017.
  10. A range of changes to Family Tax Benefit – Part A and B will reduce the number of people who are eligible and, for some, lower the entitlements.
  11. The Commonwealth Seniors Health Care Card thresholds will be indexed from 20 September 2014.
  12. The definition of income for the Commonwealth Seniors Health Care Card will be expanded. From 1 January 2015, an amount will be included in the income test, based on an account-based pension being subject to deeming.
  13. $11.6 billion infrastructure growth package with up to $2.0 billion dedicated to South Australia.

It is important to remember that the Budget initiatives have not been legislated and may be subject to negotiation and/or change.

If you are at all concerned with any of the Budget potential changes please do not hesitate to contact us.

CARRINGTON LENDING SERVICES

Is it time for a free home loan health check? Your current home loan may have been the best available to you at the time, and it still may be. But the market changes quickly so it’s a good idea to scan new products just to be sure. We have many of Australia’s leading banks and lenders on our panel which is like making the lenders compete for your business. It could help you own your home sooner or save thousands of dollars over the life of your loan.

Call Caleb on (08) 8272 6444 or email cgrigg@carringtonfs.net to health check you loan.

DO I REALLY NEED A WILL?

So, you were told by your mate at a barbeque that that you should have a will. But you are young and in good health. Perhaps you have not yet accrued savings to speak of or you are still single with no kids. Do you really need one?

Well, let us first dispel one myth: wills are not just for the rich. Regardless of your financial situation, a will ensures that whatever personal belongings or assets you do have will go to the people or beneficiaries you choose. Your beneficiaries can include family, friends, charities or almost anything you can think of. So you could leave your small savings to a charity where it may make a big difference or your collection of text books to the local school library!

Your will is a device that lets you tell the world who you want to get your things, and it is also a way that you can make sure all your possessions end up in the right hands, by being able to choose who will be your executor. Without a will, all your assets are distributed according to a predefined formula set down on paper in a government Act.

If you do have children, a will is a must. It enables you to choose your children’s guardian. Few people plan to die in the near future, but if you die suddenly without a will, you’ll be subjecting your family and loved ones to confusion and anxiety at what is already a difficult time.

You can amend a will at any time. In fact, it’s a good idea to review it periodically and especially after significant life events, such as marriage or children.

If you think now might be the right time to make your will, talk to us and we can connect you with the right people.


Posted by

Share:

Disclaimer

Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making  any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.