Did you know that about 60%^[1] of people aged 67 and over receive an age pension? Some of these pensioners don’t receive a full pension. This is because Centrelink looks at your wealth based on your income and assets and if either exceed set limits they reduce your pension.

Gifting assets will make you poorer but can increase your age pension. You might like being Santa but don’t forget the Centrelink Christmas grinch – deprivation. Deprivation rules claw back any pension increase you would otherwise have got from gifting and reducing your assets.

Continue reading “Gifting: Will Centrelink reward your generosity?” →

Tax file numbers (TFNs) are so much an everyday element when dealing with tax and the ATO that many taxpayers won’t give it a second thought when tax return software responds with an “invalid” message when a TFN is entered.

The common thought will be that it’s human error, so naturally one’s first reaction will be to check the numbers you entered, followed by carefully re-entering them.

Most of the time the problem will be fixed and its business as usual, but here’s a passing thought — how does the tax return software know what is, and what is not, a valid TFN? Especially when you consider that its validity or otherwise is not dependant on matching those numbers with someone’s name and/or birthday and/or address and so on. These identifiers are used to cross-check a person’s identity of course, but the initial validity of a TFN is known via another factor — the “TFN algorithm”.

This verification algorithm, also known as a check digit algorithm, is embedded in each unique TFN. As with a lot of these things, this is best explained using an example. However, you need to keep a number in mind, which in this case is the number 11.

To make the algorithm work, a fixed weighting is applied to each number of the TFN. In order from the left, these weightings are 1, 4, 3, 7, 5, 8, 6, 9, 10.

Example: 123 456 782

As 253 is a multiple of 11 the TFN is valid.

To check for yourself, try the above with your own TFN.

11 February 2024

Many people gift assets to their family or friends to give them a helping hand. However, care must be taken to ensure any gifting does not impact your current or future social security entitlements, such as the age pension.

What are the gifting rules?

For Centrelink purposes, gifting refers to selling or transferring income or assets for less than it’s worth or without receiving anything in return. If you receive adequate compensation, such as payment for an asset to the same value, it is not considered a gift.

Gifting limits

Although you can gift as much income or assets as you like, Centrelink imposes gifting limits to discourage retirees from giving away their wealth to qualify for more age pension income.

The gifting rules allow you to gift up to $10,000 each financial year or a maximum $30,000 over five financial years without this impacting your entitlement to government benefits.

Continue reading “Gifting and the age pension” →

4 February 2024

Most people look forward to retirement as it is a chance to finally take time to relax, enjoy life and do things they never had time for when they were working. But sometimes things change and some people feel the urge to return to work. If a return to work is inevitable, it is important to understand the superannuation retirement rules when it comes to working and accessing your superannuation.

Introduction

Many new retirees find that after a few months the novelty of being on ‘permanent vacation’ starts to wear off. Some people may miss their sense of identity, meaning, and purpose that came with their job, the daily structure it brought to their days, or the social aspect of having co-workers.

In fact, figures from the Australian Bureau of Statistics (ABS) have revealed financial necessity and boredom are the most common factors prompting retirees back into full or part-time employment^[1]. As such, it is not uncommon to want to return to work after retirement, even if only on a part-time or casual basis. Whatever your reasons or motivations might be, there are a range of factors to consider if you wish to return to work depending on your age.

There are three ways in which you can retire, access your superannuation and then return to work, which are summarised below.

Continue reading “Returning to work after retirement” →

21 January 2024

Now and then, taxpayers may find themselves in a situation where they simply have no records to back up a tax claim. There can be many reasons for this, such as losing documents (either paper or electronic) when moving home, or technology failures that end up with the same result (or worse, destroyed records).

And with a hot summer predicted, let’s not forget the very real danger of natural disasters and the devastation these can have on people’s lives, not just their financial concerns.

It’s true that in these modern times the ATO’s systems are able to pre-fill quite a lot of data, and this is only going to increase over time, which can mean that taxpayers can relax a little more about having to stay on top of record keeping. But there can still be situations where essential back-up documents or other evidence is required that may be unavailable for one reason or another.

If your records are damaged or destroyed or simply missing, there are ways to a remedy, or at least an acceptable outcome. First of all, be assured that we will hold quite a substantial amount of required information, so your first and perhaps best inquiry could be to your friendly tax professional.

Continue reading “Lost or destroyed tax records? Don’t panic!” →

4 June 2023

Are you a self-funded retiree who does not qualify for the Age Pension? If you’ve answered yes, then help may be available for certain living expenses by way of the Commonwealth Seniors Health Card (CSHC).

What is the CSHC?

The CSHC is a concession card enabling access to  cheaper health care and some discounts if you’ve reached Age Pension age.

Benefits of the CSHC

With a CSHC you may receive benefits such as:

• Cheaper medicine under the Pharmaceutical Benefits Scheme (PBS)
• Bulk billed doctor visits – this is up to your doctor
• A refund for medical costs when you reach the Medicare Safety Net, and
• Depending on your state or territory government and local council, lower electricity and gas bills, property and water rates, and public transport.

Who can get the CSHC?

To get this card you must meet all of the below conditions:

• Be of Age Pension age or older
• Meet residency rules
• Not be receiving an income support payment (such as the Age Pension) from Centrelink or the Department of Veterans’ Affairs
• Give Centrelink your Tax File Number (including your partner’s TFN) unless you’re exempt from doing so
• Meet identity requirements, and
• Meet the income test.

Continue reading “Super pensions and the Commonwealth Seniors Health Card” →

27 March 2023

Alliott Global Alliance (‘AGA’), one of the largest and fastest-growing global multidisciplinary alliances with 215 member firms in 95 countries, has expanded its Australasian alliance by signing an agreement with Adelaide based i2 Advisory Chartered Accountants (‘i2 Advisory’).

Founded in 2012 and based in South Australia’s capital city, Adelaide, i2 Advisory is a seven-partner firm that offers accounting, tax compliance, business, and tax advisory, superannuation financial planning (i2 Wealth) and bookkeeping services.

The firm’s experienced partners are all ex-Deloitte and are supported by a team of professionals with backgrounds in property syndicate advising, business investment and long-term partnerships. Key sectors they provide services to include manufacturing, agribusiness, retail, health, high net worth individuals, hospitality & tourism, property, and private investors.

After achieving an impressive 13% growth over the last two years, the firm is looking to continue to expand its business consulting, property, and manufacturing services in the immediate future. Business is conducted at the firm in the Italian, Cantonese, Mandarin, Urdu, Hindi, Marathi, and English languages.

Partner David Inglis comments:

“By joining Alliott Global Alliance, we see an opportunity to allow us to maximise upon and build new trusted relationships with members in the region and globally, share best practices, expand on current client opportunities, and find support for our growing list of clients’ multijurisdictional needs that stretch beyond Australian borders.”

“For AGA and its members, we can add tangible value in this important and major global economy, and we are delighted to be AGA’s accounting and tax representative in South Australia.”

Alliott Global Alliance’s CEO, Giles Brake adds:

“Australia is the gateway to many international markets and is highly attractive to corporate and high net worth investors. Our growth strategy in the region is to appoint leading local accounting and law firms to represent us in the key business hubs. We are therefore delighted to welcome one of Adelaide’s fastest-growing firms, i2 Advisory. They join a growing group of well established, independent firms in the region that need to service their clients beyond their state and national borders. A very warm welcome to the i2 Advisory team.”

Through affiliation with AGA, local independent law and accounting firms can offer clients global reach and access to an extensive range of professional services that enable them to compete head-on with the larger international firms in their jurisdictions. Across the Asia Pacific region, AGA has member firms in China, Hong Kong, Bangladesh, Singapore, Indonesia, Malaysia, India, Australia, Papua New Guinea, New Zealand, Japan, South Korea, Nepal, Pakistan, Thailand, Taiwan, the Philippines, and Vietnam.

About i2 Advisory Chartered Accountants:

As Alliott Global Alliances’s accounting and tax member firm in Adelaide, the team at i2 Advisory are dedicated to working closely with individuals and business owners locally and internationally to improve productivity, cash flow and importantly the life of those involved and has delivered impressive results since commencing practice in 2012.

With no issue too big or too small, i2 Advisory offers an extensive range of tax and business advisory services with a focus on providing clients with optimum results to develop wealth and continue to build success. Open, regular communications ensure there are no surprises, assuring clients peace of mind.

Seven experienced directors and a team of over twenty diversely trained and enthusiastic professional staff are the key to i2 Advisory’s success and their expanding client base, with the firm’s proud differentiator being their hands on approach and ability to assist organisations with key steps involved with the implementation and strategic management of operating their businesses.

About Alliott Global Alliance:

Founded in 1979, and with 215 member firms in 95 countries Alliott Global Alliance is an international alliance of independent, law, accounting, and specialist advisory firms, working across the world Together as One.

Each of our members share a common goal: to learn and share knowledge, resources, and opportunities to make the world smaller and their businesses stronger.
We work with a spirit of generosity and openness — so that together, we can continue to fulfil our ambitions, gain greater experience, and drive mutual success.

Alliott Global Alliance is expanding fast, and the alliance has its sights set firmly on growing its legal and accounting membership to 100 countries. Opportunities are available to independent professional firms in specific countries in Africa, but also in Europe, China, the ASEAN region, Australasia, the Gulf Cooperation Council region, Central and South America and in North America. For information about membership email membership@nullalliottglobal.com.

9 August 2022

With interest rates increasing quite rapidly, homeowners are being encouraged to look around for a better deal on their home loan. ASIC has recently released some tips if you are doing so.

Ask your current lender for a better deal

Tell your current lender you are planning to switch to a cheaper loan offered by a different lender. To keep your business, your lender may reduce the interest rate on your current loan.

If you have at least 20% equity in your home, you’ll have more to bargain with. Having a good credit score will also help with negotiations.

Compare any loan they offer you with the other loans you’re considering switching to.

Continue reading “Switching home loans” →

6 July 2022

The ATO has just recently reported an increase in fake websites offering to provide tax file numbers (TFNs) and Australian Business Numbers (ABNs) for a fee, but then failing to provide the service – leaving taxpayers out of pocket.

The fake TFN and ABN services are typically advertised on social media platforms like Facebook, Twitter, and Instagram.

The advertisements offer to obtain your TFN or ABN for a fee. Instead of delivering this service, the scammer uses these fraudulent websites to steal both money and personal information.

It is free, quick and easy to use government services to apply for a TFN through the ATO, or apply for an ABN through the Australian Business Register (ABR).

Continue reading “ATO warning of fake ABN and TFN scams” →

8 June 2022

Following the election of the new Labor federal Government on 21 May, there are a number of tax and superannuation proposals that they have announced or existing measures they have committed to that may impact you and your business moving forward.

Some of course are subject to the passage of enabling legislation through the new Parliament.

Continue reading “2022 Election Washup” →