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.