Month: May 2019
Superannuation Year End Considerations Continue!
Pension Payments – Have you received your annual minimum?It’s time to check on your annual minimum pension payment and make sure that you are on track to receive the correct amount by financial year end 30 June 2019. If your superannuation fund does not pay you the minimum pension amount, you risk a cessation of your pension from 1 July 2019. Moreover, your usually tax-free pension investments will be taxed at 15 per cent.
Your retirement income stream is calculated from 1 July each year and you can calculate your annual minimum pension payment by using your age. See the table below for the minimum amount you may withdraw in a financial year:
| Age of Beneficiary | Percentage factor* |
| Under 65 | 4% |
| 65 to 74 | 5% |
| 75 to 79 | 6% |
| 80 to 84 | 7% |
| 85 to 89 | 9% |
| 90 to 94 | 11% |
| 95 or more | 14% |
*Applies to every financial year from 2013/14 to 2018/19.
The Australian government has conceived the ‘sole purpose test’ to safeguard your retirement income with its applicable tax concessions from being transferred to the next generation. The ‘sole purpose test’ requires the setting of an annual minimum pension amount, determined by your age and increasing incrementally every five years. These increments are called the ‘percentage factor’, starting at 4 per cent (as seen in the table above).
The percentage factor provides a ‘safe’ pension withdrawal amount that allows for a retiree’s fund balance to continue to support them in retirement. As you age, the percentage factor increases to 14 per cent.
The provision of a minimum pension payment is regulated, however there is no maximum withdrawal (annual) in the pension phase of the fund. A Transition to Retirement Pension (TTR), not in the pension phase, has a maximum withdrawal of 10 per cent.
Return of the Coalition Government – What does it mean?
With the Coalition Government’s win at the recent federal election, the superannuation initiatives that it presented in Parliament prior to the election may now be addressed and eventually legislated for the benefit of retirees.
Some of the changes made by the Coalition Government are:
- Removal of the work test for retirees aged 65 and 66 who want to make voluntary superannuation contributions
- Extension of the ‘bring-forward’ arrangement for retirees aged 65 and 66 to make three years of after-tax contributions in a single year
- Increase in the age limit for receiving spouse contributions from age 69 to age 74
- Making tax deductions easier to claim for earnings on assets that support superannuation pensions
Franking Credit Cash Refunds – What happens now?
If you were wondering whether your ability to claim franking credit cash refunds would end at the federal election, you will be pleased to know that retirees will continue to benefit from franking credit cash refunds – no changes to the current ATO arrangement.
How can YML help?
Talk to our YML Super Solutions Team today to see how YML Group can assist you with your SMSF pension payments. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
AI and RPA changing the Future of Work
Whether your business is on-board with Robotic Process Automation (RPA) or not, soon it will be the convention to upgrade your business’s software with RPA. Australia and the world are moving towards a vast uptake of RPA and its future morphosis with Artificial Intelligence (AI). It won’t be a matter of why? It will be de rigueur in order to stay ahead as information technology develops more efficient and faster automated business processes.What is RPA?
RPA is the use of software robots to process high volume and repeatable tasks usually performed manually by people within your organisation. It automates business practices, but only performs certain tasks - the repetitive and predictable ones. Generally, it can process transactions, move data, activate outputs and communicate digitally between all your company’s IT systems.
What is AI and how is it used today?
AI behaves in a similar manner to human intelligence. Humans can plan, perceive, reason, manipulate and solve problems. Similarly, AI can perform these behaviours via computer. For greater efficiency and further simplification of the digital processes already executed by RPA, AI is set to enhance RPA by introducing ‘intelligent’ automation, creating a higher-level RPA experience in the workplace.
Currently, AI is used, for example, in service-related companies to predict customer preferences; in wholesale and retail environments to track spending patterns; and in digital processes such as improving the quality of a photograph.
What does a RPA and AI ‘marriage’ look like?
‘Intelligent’ automation (that is, AI) will move RPA up a gear by making judgements on or gathering insights from data collected from your business, its partners and its customers.
AI’s ability to make decisions normally made by people will effect change in RPA outcomes. To date, RPA outcomes have been expected because RPA manufactures repetitive, predictable ones. Therefore, AI combined with RPA has the capability to penetrate the data and provide you with results based on intelligence - intelligence usually gleaned from your human workers.
More day-to-day sophisticated and complex automated tasks will be achievable with AI joining hands with RPA. Pattern learning, optical character recognition, computer vision, emotional AI and language processing are just some of the aspects of AI able to be competently accomplished via RPA.
Today’s businesses can benefit from faster speeds, higher productivity, greater cost efficiencies and increased proficiency through RPA, but the introduction of AI will revolutionise today’s businesses in to the future.
How can YML help?
Talk to our YML Innovation Team today to see how YML Group can assist you with your RPA and AI requirements. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
STP – COMPULSORY Cloud-based Payroll Reporting
If you’re a small company, you need to know that compulsory Single Touch Payroll (STP) is an initiative introduced by the ATO to streamline company reporting of salaries, wages, PAYG withholding taxes and superannuation contributions.Where you used to report your workers’ payroll information to the ATO once a year in the form of PAYG payment summaries, you will now need to submit a single – digital – report after every pay day. No longer will you lodge PAYG payment summaries. However, your workers will still see their same individual information through myGov.
STP uses a cloud-based payroll system and, if you haven’t already, you will need to upgrade your digital connectivity with STP-enabled software from a STP software provider.
Need STP software?
Access this link for some available STP solutions to enable your business to report digitally to the ATO, then action one of the solutions:
https://www.ato.gov.au/business/single-touch-payroll/in-detail/low-cost-single-touch-payroll-solutions/
The ATO provides the information in this link, but doesn’t endorse it.
Alternatively, please call us on 02-8383 4400 – ask for Sarp from our Innovation division – to provide you a quote for our services to assist you with becoming ‘STP-compliant’.
Already use a cloud-based payroll system, but not yet STP-compliant?
If you already use a cloud-based payroll system, you will simply need to ensure you are ‘STP-compliant’ by:
- Logging in to your cloud-based payroll system and selecting “STP”. (Contact your software provider for assistance).
- Logging in to your ATO Business Portal and providing your STP software information. (Apply for access to your ATO Business Portal: https://bp.ato.gov.au/ or call the ATO on 1300 85 22 32 for assistance).
Either way, be sure to let YML Group know your decision, so your business record can be updated as ‘STP-compliant’.
STP is a compulsory ATO requirement and non-compliance may result in ATO penalties.
How can YML help?
Talk to our Accountants today to see how YML Chartered Accountants can assist you with your STP compliance. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
Federal Election 2019 Outcome – What it means for you
Promised personal TAX CUTS across a broad band of income mean you could benefit over a 10-year period. In the first instance, the Coalition’s plan is to simplify the taxation system.- From 1 July 2019, if you earn up to $45,000, the 19 per cent tax rate bracket would apply (previously applicable up to $37,000), saving you up to $255 a year.
- From 1 July 2022, if you earn up to $120,000, the 32.5 per cent tax bracket would apply (previously applicable up to $90,000), saving you up to $1080 a year.
- From 1 July 2024, it is planned that if you earn up to $200,000, you would remain in the 32.5 per cent tax bracket. The 37 per cent tax bracket is intended to be fully removed.
- Overall, $158 billion was announced in the 2019 Budget to support tax relief over 10 years.
The Coalition announced as part of its 2019 Budget the expanded and improved INSTANT ASSET WRITE-OFF. Businesses with up to $50 million in turnover may write off business assets this financial year (previously applicable up to $10 million in turnover). Furthermore, the write-off threshold has increased to $30,000 (from $25,000).
Legislated in October 2018, the fast-tracked CORPORATE TAX payable by small and medium businesses with up to $50 million in turnover was reduced from 30 per cent to 27.5 per cent for income year 2019-20. The Coalition plans to reduce the tax rate to 26 per cent for income year 2020-21 and finally to 25 per cent by income year 2021-22 onwards, fast-tracked by five years.
If you’re in retirement, wondering about recent reports of losing your FRANKING CREDIT CASH REFUND ability, be assured the Coalition plans for you to continue to make your claims. In addition, if you make VOLUNTARY SUPERANNUATION CONTRIBUTIONS at aged 65 or 66, you will no longer need to meet the work test requiring you to work 40 hours in a 30-day period per annum.
From 1 January 2020, eligible first home buyers with a minimum five per cent deposit may be able to apply for a deposit loan through the Coalition’s proposed FIRST HOME LOAN DEPOSIT SCHEME, enabling 10,000 first home buyers to benefit by purchasing a home sooner than they might have.
Vocational education and training (VET) are cornerstones of a skilled workforce and the Coalition’s plan to spend $525 million – ‘Delivering Skills for Today and Tomorrow’ – on VET will benefit businesses by creating up to 80,000 NEW APPRENTICESHIPS with Skill Shortages payments of $4000 for eligible employers and $2000 for apprentices.
The Coalition will continue to deliver on its financial support commitment over 10 years for all primary and secondary, public and private schools under Gonski 2.0.
Are you in the business of exporting? If you are, the Coalition plans to increase Australia’s number of exporting businesses from 52,000 to 62,000 over the next three years through its proposed ‘Exporters’ Package’ providing additional funds, $60 million, to its EXPORT MARKET DEVELOPMENT GRANTS SCHEME.
In an effort to more robustly support employers, including in regional areas, the Coalition will bring in changes to visas for skilled migrant workers, commencing with a greater number of EMPLOYER SPONSORED SKILLED VISAS being granted to 39,000 (from 35,528) in 2019-20.
A new GLOBAL TALENT – INDEPENDENT PROGRAM commencing on 1 July 2019 will provide 5000 places within the 2019-20 migration program. The best-of-the-best skilled migrant workers will be eligible to apply.
If you’re an employer of WORKING HOLIDAY MAKERS, then from 1 July 2019, overseas visitors on a working holiday visa may have the option of a third year visa, providing they perform six months of specified work in regional areas. To attract people with more work experience, the Coalition has already lifted the eligible applicant age cap from 30 years to 35 years (Canada and Ireland only at this time).
Overall, a reduction in PERMANENT MIGRATION will see a new cap of approximately 160,000 migrants (down from 190,000) composed of 110,000 skilled migrant workers and 47,000 family members.
How can YML help?
Talk to our Accountants today to see how YML Chartered Accountants can assist you with your next financial steps. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
