Increase to CSHC income test legislated

Posted on 11 October 2022 | by Allan Hall

Cheaper healthcare more accessible for eligible self-funded retirees

Key points

Recent legislation will increase the Commonwealth Seniors Health Card (CSHC) income test thresholds
Income test limit thresholds will increase to $90,000 for a single person and $144,000 for couples (combined)
The CSHC provides access to valuable health concessions for older Australians.

The CSHC is a concession card that provides access to cheaper healthcare and other discounts and can be valuable in reducing the cost of living for self-funded retirees. Generally, the CSHC is accessible by persons of Age Pension age but who are not eligible for the Age Pension due to either the assets test or income test.

The CSHC is valid for 12 months and is reissued on 1 August each year provided eligibility requirements continue to be met. The eligibility test for the CSHC is different to the Age pension in that it does not have an assets test. The Services Australia webpage identifies the criteria to get a CHSC card.

Retirees who have a partner must provide details of their partner’s income in the application as they will be assessed as a couple.

The incoming increase in income test thresholds is a material increase which the Government expects will lead to more than 44,000 additional self-funded retirees being able to access the CHSC card in the first year, increasing to 50,000 by 2026-27.

What income counts?

To meet the CSHC income test currently a retiree must earn no more than $61,284 a year for a single person and $98,054 a year for couples (combined).

The CSHC income test is based on adjusted taxable income (ATI), usually evidenced by the tax notice of assessment plus any other income documents required to determine the person’s ATI
The reference tax year used is typically the tax year immediately preceding the current tax year, except if an individual has not received their notice of assessment for that year, then the tax year immediately preceding will be used
For couples, both individuals must use the same tax year.

An individual’s ATI includes a range of criteria which can be reviewed here.

What are the benefits?

The main benefit of the CSHC is that it provides access to the following valuable health concessions:

cheaper medicine under the Pharmaceutical Benefits Scheme (PBS)
bulk billed doctor visits
a refund for medical costs when the Medicare Safety Net is reached.

The value of these CSHC’s health concessions to retirees depends on their individual use of Medicare and PBS medicines.

State or territory governments and local councils may also offer additional discounts to CSHC holders on other expenses such as utility bills, rates and public transport. However, these are not as widespread or significant as those for the Pensioner Concession Card (PCC) which is provided to individuals receiving an Age Pension.

The CSHC can be applied for via the Services Australia website at https://www.servicesaustralia.gov.au/how-to-claim-commonwealth-seniors-health-card.

CONTACT ALLAN HALL SUPERANNUATION

Federal Budget 2022-2023

Posted on 30 March 2022 | by Allan Hall

Tax and Superannuation Overview

The Federal Treasurer, Mr Josh Frydenberg, handed down the 2022–23 Federal Budget at 7:30pm (AEDT) on 29 March 2022.

In an economy emerging from the pandemic, the Treasurer has confirmed an unemployment rate of 4% and an expected budget deficit of $78 billion for 2022–23.

As international uncertainties add pressure to the cost of living, key measures provide cost of living relief in the form of an increased Low and Middle Income Tax Offset, a one-off $250 payment for welfare recipients and pensioners and a 6-month fuel excise relief.

Other measures seek to promote innovation, with expanded “patent box” tax concessions proposed, and provide tax incentives for small business to invest in the skills of their employees. A lower GDP uplift rate for PAYG and GST instalments has also been proposed to support cash flows of small and medium businesses.

To read our comprehensive Budget report outlining the changes to taxation and accounting, please click below:

2022-2023 BUDGET REPORT

The highlights are set out below:

Business

Additional state and territory COVID-19 business support grant programs will be eligible for tax treatment as non-assessable non-exempt income until 30 June 2022.
Small and medium businesses will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.
Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.
The Boosting Apprenticeship Commencements wage subsidy will be extended by 3 months.
Concessional tax treatment will apply from 1 July 2022 for primary producers selling Australian Carbon Credit Units and biodiversity certificates.
Access to employee share schemes in unlisted companies will be expanded.
The PAYG instalment system is set for a structural overhaul with a set GDP uplift of 2% to apply for the 2022–23 income year.
Additional funding will be provided to further reform insolvency arrangements, including the insolvent trading “safe harbour”.
Business registry fees will be streamlined over 3 years from 2023–24.
Wholly owned Australian incorporated subsidiaries of the Future Fund Board of Guardians will be exempt from corporate income tax.

Increased deduction for small business external training expenditure

Small and medium businesses will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. The external training course must be delivered by an Australian entity and provided to employees in Australia or online. In-house or on-the-job training and expenditure for persons other than employees will be excluded.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024. Where eligible expenditure is incurred before 1 July 2022, the additional deduction will be claimed in the tax return for the following income year.

Increased deductions for digital adoption by small businesses

Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. Eligible expenditure will include the cost of depreciating assets and business expenses supporting digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap of $100,000 will apply to expenditure eligible for the additional deduction.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023. Where eligible expenditure is incurred before 1 July 2022, the additional deduction will be claimed in the tax return for the following income year.

Apprenticeship wage subsidy extended

The Boosting Apprenticeship Commencements wage subsidy will be extended to support businesses and Group Training Organisations that take on new apprentices and trainees. The subsidy will now be available to 30 June 2022. This measure will provide for an additional 35,000 apprentices and trainees. Eligible businesses will be reimbursed up to 50% of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.

Individuals

The low and middle income tax offset will be increased by $420 in the 2021–22 income year to ease the current cost of living pressures.
A one-off payment of $250 will be made to individuals who are currently in receipt of Australian government social security payments, including pensions, to ease cost of living pressures.
Additional funding will be provided over 5 years to support older Australians in the aged care sector with managing the impacts of the pandemic.
Costs of taking a COVID-19 test to attend a place of work will be tax deductible for individuals and exempt from fringe benefits tax from 1 July 2021.
A single Paid Parental Leave scheme of up to 20 weeks paid leave will replace the existing system of 2 separate payments.
CPI indexed Medicare levy low-income threshold amounts for singles, families, and seniors and pensioners for the 2021–22 year announced.
The number of guarantees under the Home Guarantee Scheme will be increased to 50,000 per year to assist homebuyers with lower deposits.

Superannuation

The 50% reduction of the superannuation minimum drawdown requirements for account-based pensions will be extended for an additional year.

Need help?

If you would like assistance to interpret these changes and how they may affect your individual circumstances or your business, please contact your Allan Hall Advisor on 02 9981 2300.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

CONTACT ALLAN HALL

Why aged care matters

Posted on 7 February 2022 | by Allan Hall

It’s important to explore options whilst you can make informed decisions

The last couple of years have been tough on a lot of people with the COVID pandemic throwing the world into chaos and taking a toll on our physical, mental, financial and emotional wellbeing.

If you have had a family member in aged care over the period of lockdowns and were not able to visit them or help care for them, you were probably even more grateful to the staff who turned up day in and day out to care for the residents. This highlights, even more, the importance of having options when it comes to aged care, and getting it right for you.

Accommodation options in retirement and aged care

Own home – if you choose to remain in your own home there are a range of services that can be provided under a Home Care Package (HCP). These may include personal care, clinical support and light home duties. A HCP can be hard to secure with greater demand than supply. As at 31 March 2021 there were 183,376 people who had accessed a HCP. This is a 20.7 per cent increase since 31 March 2020¹.

There is also a Commonwealth Home Support Program which is assessed by the regional assessment service to determine the type of in-home care needed.

Retirement village – a retirement village is a residential option offering a community lifestyle designed specifically for the needs and lifestyles of people over age 55. Most retirement villages offer self-contained accommodation for independent living. They may also provide services such as meals, cleaning and personal care for an additional fee.

Aged care accommodation – residential aged care is a purpose-built facility that offers specialised care for those who need assistance with their everyday living. The services provided may include:

on-call staff for assistance
meals
basic accommodation services such as furnishings
cleaning and general laundry
bedding
maintenance of buildings and grounds.

Additional services (such as hairdressing, outings or a cafe) are offered by some aged care residential facilities at an extra cost.

Accessing accommodation packages

A conversation with an Aged Care Assessment Team (ACAT) is the key to accessing what packages are available to an individual to help determine if a home care package can be secured, or if entry to residential aged care accommodation is the more suitable option.

An ACAT assessment is done by doctors, nurses and social workers to assess the physical and mental needs of the individual.

Choosing an aged care facility

The decision on which aged care facility to choose is made by the prospective resident and their family. This decision may be largely based on accommodation cost and availability, but consideration should also be given to family circumstances, quality of the accommodation and facilities, reputation of the facility, closeness to family and friends and other personal and emotional factors.

It’s important to remember there are often long waiting lists for entry to many facilities, so it’s a matter of weighing up the urgency of entry and the availability of preferred facilities. The sooner you consider your aged care options and get onto a waitlist, the easier it is to make the transition. In saying this, you should also be prepared to move rapidly once a facility can accommodate you, as places tend to be assigned very quickly and if you take too long to decide, it may be offered to someone else.

Other considerations

This article barely scratches the surface of things you need to know when it comes to your aged care, or that of a family member or close friend. There is a lot to understand when it comes to costs, whether the family home needs to be sold or can be retained, impacts on the age pension for those in receipt of this social security payment and thought to ongoing income.

Talk to a Financial Adviser

With so much to know about this very important decision around how you, or someone you care about, will live out their final years, it’s important to get all the facts from a qualified Financial Adviser who understands the aged care system and can provide options and advice, giving consideration to your individual circumstances.

Make an appointment today to discuss aged care, it’s important to explore your options while you are of sound mind and can make informed decisions.

General Advice Warning

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

Source

*IOOF Survey 2020: The True Value of Advice – A study of 12,643 Australians is an Authorised Representative of Lonsdale Financial Group, ABN 76 006 637 225, AFSL No 246934. This is general advice only and does not take into account your objectives, financial situation and needs. Before acting on this advice, you should consult a financial adviser.

COVID-19 employee vaccinations

Posted on 16 August 2021 | by Allan Hall

COVID-19 Vaccinations for employees

The Fair Work Ombudsman has released additional guidance to employers on the circumstances in which it could be appropriate to require their employees to be vaccinated.

See link: https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/covid-19-vaccinations-and-the-workplace/covid-19-vaccinations-workplace-rights-and-obligations#lawful-and-reasonable-directions-to-get-vaccinated

Employers can only require their employees to be vaccinated where:

a specific law (including the public health orders) requires an employee to be vaccinated
the requirement is permitted by an enterprise agreement, other registered agreement or employment contract, or
it would be lawful and reasonable for an employer to give their employees a direction to be vaccinated, which is assessed on a case-by-case basis.

As to whether or not a direction is reasonable requires a case-by-case assessment based on factors which include:

the nature of the workplace (are employees in public-facing roles and is the business an essential service?)
The extent of community transmission in the location of the workplace, including the risk of transmission of the Delta variant
WHS obligations and the effectiveness of vaccines
Each employee’s circumstances including if there is a legitimate reason not to get vaccinated
Vaccine availability

To guide employers in the case by case assessment, the Fair Work Ombudsman has divided workplaces into four tiers:

Tier 1 work where employees are required as part of their duties to interact with people with an increased risk of being infected with coronavirus (for example, employees working in hotel quarantine or border control).
Tier 2 work where employees are required to have close contact with people who are particularly vulnerable to the health impacts of coronavirus (for example, employees working in health care or aged care).
Tier 3 work where there is interaction or likely interaction between employees and other people such as customers, other employees or the public in the normal course of employment (for example, stores providing essential goods and services).
Tier 4 work where employees have minimal face-to-face interaction as part of their normal employment duties (for example, where they are working from home).

As you would be aware from our recent article, the NSW Government has imposed a number of restrictions to combat COVID-19 including making specific public health orders which require workers in certain industries to have had a vaccination (or have an exemption) in order to work.

From 11 August 2021, additional restrictions were imposed on employees from “areas of concern” which are currently the local government areas of Blacktown, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Georges River, Liverpool, Parramatta and some suburbs of Penrith. To keep up to date with changes to the public health orders and updates to the local government “areas of concern” go to https://www.nsw.gov.au/covid-19/rules/affected-area#summary-of-restrictions.

Construction industry

Since 31 July 2021, work has been allowed to resume on construction sites in Greater Sydney including in local government areas of concern. However, construction sites in local government areas of concern must comply with a number of requirements listed here: https://www.nsw.gov.au/covid-19/rules/construction-rules-and-restrictions#rules-for-construction-sites.

One of the requirements is that from 11 August 2021 workers who live in or are temporarily staying in a local government area of concern must comply with vaccination requirements in order to work at or enter a construction site in Greater Sydney. A person from these areas must not enter or remain at a construction site in Greater Sydney unless they have:

had 2 doses of a COVID-19 vaccine or
had one dose of a COVID-19 vaccine before Wednesday 21 July 2021 or
had one dose of a COVID-19 vaccine after Wednesday 21 July 2021 and you have been tested for COVID-19 in the past 72 hours (3 days) or
evidence of a medical exemption and you have been tested for COVID-19 in the past 72 hours.

If a person is required to have a COVID-19 test to enter or remain at a construction site, they must have a COVID-19 test once every 72 hours.

Construction workers can request a COVID-19 vaccination exemption for medical reasons.

Further information in relation to the evidence requirements is here: https://www.nsw.gov.au/covid-19/health-and-wellbeing/covid-19-vaccination-nsw/covid-19-vaccination-for-workers.

Other industries

There are also vaccination requirements for quarantine facilities, transport providers and airport workers. Further information is available here: https://www.nsw.gov.au/covid-19/health-and-wellbeing/covid-19-vaccination-nsw/covid-19-vaccination-for-workers

Residential Aged Care

From 17 September 2021, COVID-19 vaccinations will be mandatory for all residential aged care workers. For further information see: https://www.health.gov.au/initiatives-and-programs/covid-19-vaccines/information-for-aged-care-providers-workers-and-residents-about-covid-19-vaccines/information-for-residential-aged-care-workers-about-covid-19-vaccines.

Assisting your employees to get vaccinated

The NSW Government has released a number of resources for businesses to use to encourage their employees to get vaccinated and to ensure that employees have access to accurate information on the vaccination program.

The information is available here: https://www.health.gov.au/resources/collections/covid-19-vaccination-business-kit#information-sheets.

Allan Hall HR will continue to provide updated information about managing vaccinations in workplaces and keep you apprised of changes to the COVID-19 restrictions which impact you and your employees. If you need advice and assistance in relation to the specific circumstances in your workplace, please get in touch with our team on 1300 675 393.

Understanding Aged Care Terminology

Posted on 4 August 2021 | by Allan Hall

Aged care is a complex and emotive topic

Many people don’t think about their aged care needs until the time to do something is upon them – at which point the options can be limiting.

This article explains a couple of the key areas to consider around your aged care plan.

Arranging an aged care assessment

When the time comes to move into a facility, one of the first steps is usually an assessment by a team of medical and health professionals who determine the eligibility of any government subsidised care.

You can speak to your family doctor about getting an aged care assessment, or work with a Financial Adviser who can put you in touch with an Aged Care Assessment Team (ACAT).

Understanding an RAD and RAC

If you want or need to move into an aged care facility you will need to research different facilities, compare their services and ask them about the refundable accommodation deposit (RAD) or refundable accommodation contribution (RAC) which are required to secure a place at a facility.

The RAD is a lump sum payment for accommodation in an aged care home paid by the ingoing resident. It is essentially the cost of a room, in lump sum form that you agree to pay. The RAC is applicable when part of the cost of the room is paid for by the government, leaving you to only pay the difference as a lump sum.

Whilst the RAD and RAC are paid as a lump sum to the facility, by you, they are refundable upon a permanently leaving an aged care facility. Many times this will be at the time of death, so the amount is paid to your Estate.

In some situations, a family member agrees to pay the ingoing RAD or RAC fee to a facility, perhaps because the ingoing resident does not have the liquid cash available. If this is the case, there should be sufficient documentation so that upon death the money is refunded to the rightful recipient. The facility may offer to name this family member on the contract which should give all parties comfort in arrangement.

DAP and DAC

Another acronym you will come across is the DAP or the DAC. The Daily Accommodation Payment (DAP) is an amount to be paid by permanent residents of a facility that goes towards the cost of accommodation and care. Alternatively, the cost of accommodation and care for low-means residents is the Daily Accommodation Contribution (DAC) which is a reduced amount, based on an assessment of financial means.

More information

There is a good repository of information available on the My Aged Care website. It is worth taking a look, noting anything you don’t understand or would like further information on, and talking to your Financial Adviser.

Talk to us

If you or a family member are nearing the time that an aged care plan is required, it can help to talk to a Financial Adviser who understands this complex advice area and can answer any questions you have. It is often helpful to include close family members in these discussions.

We have the capacity to take on new clients and welcome the opportunity to meet with you to discuss your aged care needs.

General Advice Warning

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.