February Newsletter
In this edition
Centrelink News
The Value of an Advisor
Stimulus Package
Keeping Well
Office Update
In line with recent social distancing and voluntary isolation guidelines we have closed our office doors. We will still be available by phone and email, and we will still be holding meetings by phone or online. Tasks will still be completed as we work from home.
We had a scare recently with someone coming into the office who later had to be tested for COVID-19, after it was identified they had been in close contact with an infected person. Fortunately they returned a negative result but it has driven home the need for all of us to be cautious.
While the office is unmanned, the phone will be diverted to Vicki’s mobile. Accordingly, we ask that you please be mindful that Vicki will be under increased pressure having to take all phone calls in addition to her usual workload. To make life easier and help to avoid frustrating delays, could you please consider:
Emailing your query where possible, so it can be prioritised and delegated where appropriate.
Emailing admin@hell-yes.com.au to book in a time for a phone call with Vicki - this will ensure she is available when expected and will allow her to review your query ahead of time.
That there may be a delay in processing the post.
I assure you that we will be continuing to work as normally as possible and do our utmost to minimise any disruptions to you.
I hope you are all hanging in there, and of course let me know if there is anything we can do to help in this unprecedented time.
It can be frightening watching the share market plummet and climb, following every movement. This insightful graphic from Twitter may assist in reminding us all that one day this will be just another dip on the long term graph.
Centrelink News
We are aware that your financial situation has likely been impacted by the recent market uncertainty. Accordingly, Corey has been looking into what this means from a social security perspective. We do expect that Centrelink will continue to experience unprecedented demand and there may be significant delays in dealings with them.
Deeming rates
As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 percent. The reductions reflect the low-interest rate environment and its impact on the income from savings.
The change will benefit around 900,000 income support recipients, including around 565,000 people on the Age Pension who will, on average, receive around $105 more from the Age Pension in the first full year that the reduced rates apply.
Further details can be found below in our wrap of Stimulus Package 2, or on the Centrelink website.
More: Providing support for retirees
Lump sum cash payments
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. These payments will support households to manage the economic impact of the Coronavirus.
The first payment of $750 will be paid from the 31st of March with all recipients expected to have received the payment by the end of April
The second payment of $750 will be paid from the 13th of July with all recipients expected to have received the payment by the end of July
More: Payments to support households
Updating portfolio balances
Recent market downturn means that some clients may become eligible for age pension. A decrease in the value of investment assets linked to the share market via superannuation, account-based pension or investment accounts may bring some clients under either the assets or income tests.
To assess your potential eligibility, you can use this online calculator.
If you have any questions or would like assistance to determine your eligibility, feel free to contact Corey in our office to discuss your situation in more detail. Corey can be reached by emailing Corey@hell-yes.com.au or phoning the office on (02) 6800 2780.
Credit: Dimensional Fund Advisors
Stimulus Package #2
Overview
On Sunday 22 March the Federal Government announced a second stimulus package to the tune of $66 billion that boosts income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws.
But Prime Minister Scott Morrison has warned that there are no quick solutions and that we should be prepared for 6 months of disruption.
In summary, the changes can be broadly classified as:
For Businesses
Up to $100,000 for SMEs and NFPs
Solvency safety net
Access to working capital
Jobseeker payments for the self-employed
Temporary scale-back of Corporations Act
For Individuals
Early release of some superannuation
Temporary reduction in minimum draw down rates
Deeming rates decreased
Extended income supplements
Bankruptcy safety net
There is a lot in this, but the government has warned that additional stimulus packages will still be required.
Source: Australian Taxation Office
Measures for Retirees
The package includes a reduction to the minimum pension draw-down requirements on superannuation income streams for the rest of the 2020 Financial Year and all of the 2021 Financial Year. This affects Account-based Pensions, Transition to Retirement Pensions, Allocated Pensions and Market Linked Income Streams.
The measure will benefit many retirees by reducing the need to sell investments that have taken a hit to their value in the last month to fund their minimum pension draw-down requirements.
But beware, there are some tips and traps for SMSFs and the devil is in the detail. Click the link below for a more in-depth analysis.
Read more
Keeping Well
In preparation for some big events, Vicki and Talia both recently took part in the Orange Running Festival 10km. Upcoming events have now been postponed however it is more important than ever to get moving for your physical and mental health.
Gyms are running classes and tutorials online, and exercise is still being encouraged as long as you follow social distancing guidelines.
We'd love to know if you have any great workout tips that can be done at home without special equipment!