Past, present and future (Part 1)

Past, present and future (Part 1)

Past, present and future (Part 1) 1200 900 Integral Private Wealth

LEGISLATIVE CHANGES AFFECT RANGE OF PERSONAL FINANCE AREAS

Change is inevitable. In this article, being the first of a two-part series, we cover legislative changes to the PBS, redundancy payments, salary sacrifice arrangements, and self-managed super funds (NALI and LRBAs).  All of these changes have become effective 1 January 2020.

Leading up to the 2019 festive season, numerous Bills passed through the parliamentary process and became Acts (legislation); these legislative changes affect a wide range of personal finance areas.

Notably, regardless of whether you are a wealth accumulator or retiree, you may find that one or more of these legislative changes are of relevance to your financial situation, goals and objectives, now and into the future.

In this article, part one of a two-part series, we cover legislative changes that fall under the Government’s Health and Treasury portfolios:

  • Health portfolio
    • The Pharmaceutical Benefits Scheme (PBS) and the PBS Safety Net threshold amounts.
  • Treasury portfolio
    • Super Guarantee contributions and salary sacrificing arrangements,
    • Non-arm’s length income (NALI) and limited recourse borrowing arrangements (LRBAs), and
    • Redundancy and early retirement scheme payments eligible for concessional tax treatment.

Pharmaceutical Benefits Scheme (PBS)

PBS Safety Net threshold amounts

The PBS provides Australians with timely, reliable and affordable access to necessary and cost-effective medicines.

Super Guarantee (SG) contributions

Salary sacrificing arrangements

The 2019-20 concessional contributions (CC) cap is $25,000 per annum. The CC cap includes personal deductible contributions and employer contributions, such as SG and salary sacrifice.

Self-managed super funds (SMSFs)

Non-arm’s length income (NALI)

The NALI provisions are an existing anti-avoidance measure that seeks to prevent the inflating of super fundearnings through non-arm’s length dealings; any income that is NALI is taxed at the highest marginal tax rate.

Redundancy and early retirement scheme payments

Payments eligible for concessional tax treatment 

The restructuring of a business, or automation of one or more of their processes, can sometimes lead to a reduction in a business’s staff numbers with certain positions being made redundant.

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