RBA Cash Rate Reductions – What it means for your Loan

When the Reserve Bank of Australia (RBA) sets the cash rate down (or up), Australia’s banks have a choice to pass on the new rate as a lower (or higher) interest rate to its customers with loans, including mortgages. With the new lower cash rate, a record low, of 0.75% in October, most banks did not provide the full rate cut to their customers’ loans.

This recent rate decrease is therefore good for people with a variable interest rate mortgage. Although a change in the cash rate would not normally affect those people with a fixed rate mortgage, all four major banks have lowered their fixed rate for new mortgage loans.

Currently, a home loan sees a fixed rate of approximately 2.8% - 2.99% on principle + interest repayments; an investment loan sees a fixed rate of approximately 3.19% on principle + interest repayments.

The RBA is closely monitoring the markets and it does not rule out a further reduction in the cash rate in the coming months or even as soon as this month, November 2019.

Take the time to review your loan/s and consult a qualified financial advisor for the best interest rate/s now available.

How can YML help?

Talk to our YML Finance Team today to see how YML Group can assist you with your mortgage refinancing. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.

Gift or lend to your child?

Deciding how to help your child/ren with money warrants an exploration of two very different ways to provide them financial assistance. You might choose to gift them money OR you might prefer to enter into a loan agreement with them. Your options will depend upon your own personal financial circumstances at the time of the request for help. What will you do?

First, consider whether you can afford to give money to your child and not see it returned to you. This is a gift. A gift of money to an adult child is generous, requiring no repayment by your child but no financial benefit to you, the giver.

Now, let’s consider you lend an amount of money to your child, setting up a ‘payable on demand’ loan agreement. This loan of money can protect your financial future by ensuring that you may recall the loan at any time or at a time agreed, or you can forgive the loan at a later date, even include it in your Will.

Lending is preferential to gifting – Why?

Imagine your gift $100,000 to your child for the purchase of a home. In the event of your child marrying and subsequently divorcing, the $100,000 gift would be lost to you as part of your child’s divorce settlement with their soon-to-be ex-spouse.

Instead, if you draw up a legally-binding loan agreement with your child and lend them $100,000 towards their property purchase, should your child and his/her future spouse divorce, then the $100,000 contribution you made could be returned to you and not considered part of the marriage assets for distribution between the divorcing couple.

Lending, instead of giving, an amount of money to your child helps protect your money from a myriad of situations whereby the money might be lost. For example, your child could divorce, go bankrupt, suffer from an ongoing medical condition that prevents them from working, or even break off their relationship with you. Furthermore, you might need the loaned money should you fall ill or require it to maintain your retirement.

Formalising a Loan to your Child

It is important that you discuss a loan with your child and that you both agree terms of the loan agreement.

Create a formal written document, using a certified professional, to ensure that the loan will be honoured by the Family Court of Australia or any other legal body as may be the case.

So long as you choose to provide the loan interest-free, there will be no tax payable or tax gain. Include the statement ‘Interest rate as advised by the Lender’ and you may be able to raise the interest rate from zero, should there be a future need to do so, such as increasing the amount owed to you in the case of your child’s divorcing (thereby reducing the amount available for distribution in any divorce settlement).

Finally, at all times, consult a certified professional about lending money to your child and formalise a loan for the sake of your child and you. Ideally, never ‘gift’ money to you child. Providing financial assistance to your child can be a loving gift when done with the best intentions as a loan.

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with creating a loan agreement. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Proposed Superannuation Guarantee Amnesty – Have you correctly paid your staff super?

The Australian Government has proposed a Superannuation Guarantee (SG) Amnesty which has not yet been enacted by Parliament. What would it mean for you as an employer?

Proposed Superannuation Guarantee Amnesty

An amnesty would enable employers to self-correct any past non-compliance of their superannuation guarantee to employees. You would be asked to voluntary disclose superannuation guarantee shortfall and non-payment to potentially avoid being liable for: Also, superannuation guarantee amounts voluntarily disclosed and paid (in full or on payment plan) during an amnesty would be tax deductible.

Until such time as the proposed amnesty passes royal assent, under current existing law, an employer who has neglected to maintain accurate payment of superannuation to their employees is liable to the Australian Taxation Office (ATO) for outstanding staff superannuation.

When superannuation is not paid on time in to the correct fund or at the minimum amount by employers, the ATO is responsible for collection of unpaid superannuation under their Superannuation Guarantee Charge (SGC) arrangement.

SGC – How to pay?

If you have a superannuation guarantee shortfall to rectify, you are required to lodge a SGC Statement by the quarterly due date and pay any superannuation guarantee shortfall to the ATO. This statement enables you to report and calculate what is still owing to your employees and to the ATO (administration fee).

The SGC covers any unpaid or underpaid amounts due to employees, any interest on those amounts and an administration fee of $20 for each employee affected by your error. The SGC is a non-tax-deductible amount.

For the first quarter of the current financial year, 1 July – 31 October, the due date to lodge your SGC Statement is 28 November 2019.

SGC – How to avoid paying it?

Although the ATO ultimately will seek outstanding superannuation guarantee amounts for employees, it is important that all employers aim to pay and succeed in paying their obligatory superannuation guarantee to their employees in a timely manner.

Single Touch Payroll (STP), compulsory for all Australian employers from 1 July 2019, is the new reporting method of salaries, wages, PAYG withholding tax and superannuation to the ATO. By using STP-enabled software to report to the ATO, you will be able to keep informed of any miscalculations and revise staff superannuation payments immediately, thereby potentially avoiding the SGC.

Future Outstanding SG Payments – What will happen?

Recently, the proposed Superannuation Guarantee Amnesty was re-introduced in to Parliament for further consideration and debate. Whilst a SG Amnesty is not yet law, failure to pay the superannuation guarantee to employees may result in penalties under new legislation passed in December 2018: a fine of up to $10,500 or 12 months’ jail time.

All employers must abide by their obligation to pay their employees the superannuation guarantee. With STP-enabled software, businesses can face a future without penalty.

Avoid relying on the proposed SG Amnesty to stop you neglecting your SG obligation. Rather, it is important to seek professional advice about payment options now.

How can YML help?

Talk to our Accountants today to see how YML Chartered Accountants can assist you with your Superannuation Guarantee obligation. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Low and Middle Income Earners – Tax Offsets

The Australian Government’s Personal Income Tax Plan changes are now law. As announced in the Federal Budget this year, from 1 July 2019 a new tax offset was created to enable low and middle income-earning Australian residents to receive tax offsets after lodging their tax returns, thereby reducing the tax payable on their taxable income.

What you need to know about Tax Offsets

You are eligible for a tax offset if you are an Australian resident and you receive an income. The tax offset amount you receive is dependent upon your taxable income amount.

A tax offset is non-refundable, meaning if a tax offset reduces your tax payable to zero, you will not receive any unused portion of the tax offset amount.

The Australian Taxation Office will assess your taxable income and determine your tax offset amount. You are not required to make a claim yourself. Furthermore, any tax refund resulting from the application of a tax offset will be deposited in your bank account.

What might your tax offset entitlement be?

Low and Middle Tax Offset

The Low and Middle Tax Offset is used for those individuals whose annual taxable income is less than $126,000. The maximum tax offset amount is $1080 on income up to $126,000. Whether you receive the full $1080 will be determined by the ATO and will be based on your individual taxation circumstances.

During financial years 2019, 2020, 2021 and 2022, the Low and Middle Income Tax Offset will be applied to eligible Australian earners. The Low and Middle Income Tax Offset is NEW this year and is in addition to the Low Income Tax Offset.

Low Income Tax Offset

The Low Income Tax Offset is used for those individuals whose annual taxable income is less than $66,667. The maximum tax offset amount is $445 on income up to $37,000 per annum. This tax offset amount is reduced by 1.5 cents for each dollar over $37,000, up to $66,667. The Low Income Tax Offset is not new and is now complemented by the Low and Middle Income Tax Offset.

How can YML help?

Talk to our Accountants today to see how YML Chartered Accountants can assist you with your personal tax return. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Small Business Cyber Security

Did you know that 43% of cyber-attacks target small businesses? A study* across 86 countries and over 41,000 cyber-attacks determined this to be true. So what can you do about protecting your small business, your customers and your reputation from a hacker determined to steal your business data?

First, it’s important to remember that cyber security risks exist but you also want your business to benefit from the online world to broaden your reach, expand your clientele and utilise distant third-party suppliers, so make sure you draft – and put in to action – a responsible cyber security plan.

Next, let’s look at these tools and processes to help you in safeguarding your business data and then make them part of your cyber security plan:

   1. Security Software
    There is a myriad of software available that can be uploaded on to your server to help prevent infection from malware (software sent to you that may infiltrate or damage your data) and from viruses, as well as provide filters for spam and spyware. A reputable software provider can assist you with finding the best-for-your-business software tool to install.

   2. Online Transactions
    When your customers use your website to order products and/or services online, your business is responsible for detecting fraudulent transactions and for paying any costs related to fraud. In order to protect your customers and your business, consider using machine learning, whereby fraud prevention is automated. In addition, relying on your payment gateway provider is worth considering as artificial intelligence used by them will likely help your business too.

   3. In-House Security
              a. Educating employees is key to internal security measures. Start by collating a record of all device information (hardware and software), passwords and access codes. Train your employees to use computer equipment correctly and to navigate online safely. Remind them that the use of an external hard drive, even a personal USB, is a risk to cyber security as malware can inadvertently upload on to your business server.
              b. Change passwords frequently, ideally marking a regular day or date in your cyber security plan.

   4. Data Storage / Encryption
   Data back-up is a process that is essential for anyone using a computer. This is one of the easiest ways to make certain that your business data is safely stored elsewhere, enabling you to still access stolen data if it is illegally accessed. Regular decluttering of data will help to ensure that only data necessary for the day-to-day is kept on your server and devices. Consider external cloud storage and external hard drives held off-site. In addition, encryption of data is a tool that will convert data in to secret code before it travels online, making it near impossible to be accessed by hackers.

   5. Stay Up-to-Date
   Small business management and their IT department should remain vigilant to cyber threats by keeping up-to-date with the latest online scams and security risks. You can subscribe to service providers whose job it is to alert you to cyber security concerns.

A single attack successfully executed by an unwarranted perpetrator, either internally or externally, can wreak havoc on your business, potentially disrupting your customers, your employees and the business itself. The financial ramifications of not protecting your online transactions and your business data could be disastrous.

Avoid being one of the many small businesses attacked from cyberspace by formulating and implementing your own business cyber security plan today.

*Verizon 2019 Data Breach Investigations Report (DBIR)

How can YML help?

Talk to our YML Innovation Team today to see how YML Group can assist you with your cyber security. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

NEW Regional Visa Subclass 494 – Coming in November 2019!

The Australian Government supports Australia’s regional employers with its new Skilled Employer Sponsored Regional (Provisional) visa (subclass 494), from 16 November 2019. Employers in regional areas have the opportunity to employ foreign workers for five (5) years under this new visa.

Are you an employer with a business located in a regional area of Australia, including newly-included areas: Newcastle, Central Coast NSW and Wollongong?

The new 494 visa will replace the current 187 (RSMS) visa and 9,000 places will be allocated per year. Although permanent residency will not be immediately granted under the 494 visa, a 494 visa holder may be eligible for permanent residency under the Skilled Regional Permanent Residency visa (subclass 191) after a three (3) year work tenure in an allocated regional area.

Eligible employers and visa applicants must ensure the position is relevant and on the occupation list of over 700 positions for regional Australia.

To be eligible for the 494 visa, a sponsor must offer a position that will exist for five (5) years from the commencement of the visa holder’s employment in the business. The relevant occupation’s position must meet the correct Annual Market Salary Rate (AMSR). In addition, employers will require approval from the Regional Certifying Body (RCB).

For visa applicants, there is a 45 year age limit and there is a minimum level of Competent English required. An appropriate skills assessment is required to be undertaken and the visa applicant will have at least three (3) years of skilled employment prior to lodging an application.

Current regional visa holders will not be affected by the two new regional visas and any 187 visa applications lodged prior to November 2019 will be processed.

If Permanent Residency (PR) is held by a foreign worker in a regional area, there will be no impact.

Regional employers may take advantage of the new 494 visa as soon as next month, so seek professional advice from YML Migration’s highly-experienced agents about how you can build your business with the addition of skilled workers from overseas.

How can YML help?

Talk to our YML Migration Team today to see how YML Group can assist you with your subclass 494 nomination and visa applications. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Skilled Nominated Migration (190 Visa) – Live & Work in NSW

Skilled Work on a 190 Visa

Australia’s general skilled migration scheme includes a visa specifically for skilled migrants to permanently live and work in an occupation that is state-/government-sponsored – subclass 190 visa. This does not mean that the government employs an applicant, rather that the skilled migrant’s application receives the support of the state.

Such support means that the state gives an applicant additional points (5 for a subclass 190) towards meeting the migration points-threshold required for this visa.

In order to be eligible for a subclass 190 visa, an applicant must meet certain criteria – be skilled in a suitable occupation on the specific occupation list, be nominated by an Australian state or territory government, meet the points-based system and meet language (English), age, character and health requirements.

Eligible applicants will be aged over 18 and under 45 years, have ‘Competent’ English language skills, pass an occupation skills assessment and accumulate 65 points before an Expression of Interest (EOI) may be approved by a nominating government.

Live and Work in NSW

The NSW Department of Planning, Industry and Environment has stated that “Demand for nomination by NSW is extremely high. The NSW Government will continue to select and invite top-ranking candidates who meet the NSW nomination criteria in occupations on the NSW 190 Priority Skilled Occupation List (NSW 190 List)”.

New South Wales (NSW) has recently – as of 1 July 2019 – adjusted its criteria for some occupations.

First, the NSW Government now uses a system to show the availability of occupations in NSW and this will be regularly updated to reflect the changing needs of skilled labour in NSW.

Second, the NSW Government now requires that for some occupations an applicant must have been living in NSW for at least two years and working in their nominated occupation in NSW for at least one year at the time of applying for a subclass 190 visa.

For occupations with low and limited availability – such as hairdressers, plumbers, accountants and tradespersons, an applicant will need to have a high point measure in order to receive an invitation to work in NSW.

For occupations with high availability – such as cooks/chefs, welfare workers, electricians and vehicle mechanics, an applicant who has already chosen to live and work in NSW will have reduced competition for these positions, albeit still requiring an invitation from government and meeting all application criteria.

To see an occupation’s availability in NSW, head to the NSW 190 Priority Skilled Occupation List at https://www.industry.nsw.gov.au/live-and-work-in-nsw/visas-and-immigration/nsw-skilled-occupations-list/nsw-190-priority-skilled-occupation-list

With the new NSW Skilled Occupation List, introduced in July 2019, containing occupations not previously listed, you may appreciate that there has already been much demand for these positions. At YML Migration, we have advice that: Given the above information, the competition to be selected by NSW for nomination under the subclass 190 visa programme is extremely high. Let our experts at YML Migration help you to consider your options.

How can YML help?

Talk to our YML Migration Team today to see how YML Group can assist you with your application to work in NSW. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Carry forward your unused Concessional Contributions

Since 1 July 2018 a new superannuation contribution rule has been in place: if you have a superannuation total balance of less than $500,000 on 30 June of the previous financial year, you may carry forward your unused concessional contributions from the previous year/s.

A concessional contribution is an employer contribution or a personal contribution (claimed as a tax deduction), both possible to carry forward in to the next financial year using the concessional contribution cap rollover rule.

Superannuation contribution caps limit the annual amount that may be contributed to your superannuation account and exceeding a cap may result in the excess contributions being taxed. However, this new rule will enable eligible members to add unused portions of concessional contributions from one year to their super accounts in the next year, for up to five years (after which the unused amounts will expire).

This opportunity not only offers members an opportunity to increase their super balances if they have capacity to do so, it could also open the door to certain tax minimisation strategies, such as reducing capital gains tax that may be anticipated in the future.

The 2019-20 financial year is the first year that you are entitled to carry forward (roll over) unused amounts of concessional contributions.

For example, if you have not used the full concessional contribution cap - $25,000 in 2019 – you may carry forward the unused portion and add it to your next year’s concessional contribution cap - $25,000 in 2020, meaning you bolster your superannuation account by more than the $25,000 cap in 2020.

Any financial year, since 1 July 2018, that your superannuation total balance falls below $500,000 as at 30 June, you may be eligible.

Consider this table showing examples of unused concessional contribution (CC) under the Australian Government’s carry forward rule (assuming basic CC cap of $25,000):

  2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
  Concessional contribution Limit   including the Cumulative   unused  CC for previous year   $0 $40,000  ($25,000   +$15,000) $50,000  ($25,000   +$25,000) $75,000 $65,000 $65,000 $60,000
  Actual member Concessional   Contributions in the year $10,000 $15,000    $0 $35,000  $25,000  $25,000   $28,000
  Unused General CC cap for year $15,000 $10,000 $25,000    $0    $0    $0     $0
  Unused CC Carry forward   amount applied    N/A     $0    $0 $10,000    $0    $0 $3,000
  Cumulative unused CC cap   amount remaining for previous   year  $15,000  $25,000  $50,000  $40,000   $40,000   $40,000   $32,000

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with your Concessional Contribution CAP Rollover. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.

Intelligent Process Automation (IPA) is here to stay

Our future office environment, as near as the year 2025, will consist of humans and robots co-existing more than ever before and business leaders will need to consider how to manage both effectively for best practice.

Transitioning to greater workplace productivity by robotics will impact all aspects of the office, particularly morale amongst employees, the general office working culture and productivity levels.

First, let’s consider what intelligent process automation (IPA) can deliver in terms of its capabilities. IPA encompasses artificial intelligence (AI) and all its related technologies, such as robotic process automation (RPA) – a software tool that automatically performs routine data-based tasks; machine learning – a software tool that automates the recognition of patterns in statistical data to perform tasks without instruction; computer vision – a form of automated visual perception of digital images and videos utilised to perform tasks.

IPA is an umbrella term for these computer applications that are engineered to reduce time, mitigate human error and achieve more accurate work task outcomes, all ideally at lower cost than a fully-humanised business can realise.

It is naturally expected that as a company increasingly has as many intelligent robots as people, people will need to learn to adapt to working alongside robots. Company leaders will look to their business management teams to train their employees to collaborate with their robotic counterparts. Collaboration is key here to business success. People will develop complementary skills such as interpreting machine-generated outputs, as well as how to be strategic and creative – empathetic skills which robots cannot execute at this time.

People can teach algorithms to the robotic process and people can conceive of the most appropriate applications for robotic process to fulfil the tasks at hand. Ultimately, it is the ‘human factor’ that makes IPA’s relationship with people a successful formula for businesses. So long as people come to understand the importance of their own role in ensuring robotic automation is utilised congruously, harmony within the workplace may well be reached.

The future office is not one of humans versus robots but rather one of humans and robots cooperating with each other, indeed fraternising, to attain business results not previously thought possible. With scrupulous use of today’s artificial intelligence and technologically-advancing robots, a business’s productivity, time and profits may flourish.

The potential for improved customer relationships and superlative results for customers are enhanced and realistically achieved when humans work collaboratively with robots. The future looks bright when people embrace, not fear, IPA – self-operating machinery – alongside them in the workplace. Where will IPA take your business?

How can YML help?

Talk to our YML Innovation Team today to see how YML Group can assist you with your IPA relationship. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Australian Immigration Visa Changes from 1st July 2019

Sponsored Parent Temporary Visa (870)

As of 1 July 2019, where families have long been separated, this new visa enables parents and grandparents to reunite in Australia and live temporarily for up to 10 years. There is no capacity for permanent Australian residency and a ‘no work’ condition applies to this visa.

Australian citizens and permanent residents may apply to be sponsors. Upon sponsorship being granted and since 1 July 2019, a visa application may be lodged for one or two overseas parents at any one time.

The visa grant cap at this time is 15,000 visas per annum. Visas may be renewed after five years to a maximum of 10 years. Visa application fees are $5000 for up to three years and $10000 for up to five years. Australian sponsors must bear healthcare, living and accommodation costs of their visa-holder parent/s in Australia.

Visa Eligibility

Including but not limited to, a visa applicant must: Immigration Cap Changes

The Australian Government has lowered its immigration cap to 160,000 per annum, a figure intended to be maintained for the next four years. Within this new cap figure, the number of regional visas has been increased: reserving a total of 23,000 places for new subclass 491 and subclass 494 visa holders.

Skilled Work Regional (Provisional) Visa (491)

In November 2019 a new regional visa, the Skilled Work Regional (Provisional) visa, will replace the existing subclass 489 visa. This new visa provides for five years’ living and working in a regional location via sponsorship from either an eligible family member, or a state government, situated in a designated area. There is an age limit of 45 years and the applicant is points-tested. The government has allocated 14000 places for subclass 491 visa holders.

Skilled Employer Sponsored Regional (Provisional) Visa (494)

Another new regional visa from November 2019 is the Skilled Employer Sponsored visa, replacing the existing 187 subclass visa. This new visa provides for five years’ living and working in a regional location via sponsorship from an eligible regional employer. There is an age limit of 45 years and the applicant and the sponsor employer must meet certain criteria. The government has allocated 9000 places for subclass 494 visa holders.

New Regional Visas – Pathways to Permanent Residency (PR)

From 2022, both subclass 491 and subclass 494 visa holders may be eligible to apply for Permanent Residency (PR) after a minimum of three years’ living and working under their visas, complying with applicable visa conditions and meeting their income tax obligations.

Visa Fee Increases

The Australian Government has increased visa application fees on applications lodged on or after 1 July 2019. Most visa subclasses are affected by the increases and these increases are generally greater than 5 per cent.

As migration agents specialising in advice to visa applicants and individual/employer sponsors, we at YML Migration strongly encourage you to make contact with us to discuss these new visa opportunities and for us to help you make living and/or working in Australia a reality.

How can YML help?

Talk to our YML Migration Team today to see how YML Group can assist you with your visa options. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.