Protect Your Lifestyle—Issue 24 1 PROTECT YOUR LIFESTYLE Authorised Representative of Millennium3 Financial Services Pty Ltd AFSL 24252 Brett Le Man & Associates Edition 24—2018 General Advice Warning: The informaon [including taxaon] is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this informaon without first obtaining suitable professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product. The informaon [including taxaon] is general in nature and may not be relevant to your individual circum- stances. You should refrain from doing anything in reliance on this informaon without first obtaining suitable professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product In This Issue Federal Budget Summary Do You Have????? Life, TPD & Trauma Protect your most important asset— your income 10 Tips for Your Retirement Planning Investment Bonds Income Protection {Agreed Vs Indemnity} One Pan Recipe Important Contacts Welcome to our 24th edion of Protect Your Lifestyle. I hope everybody has had a great year thus far. For the past 12 months we have had many claims. Fortunately our clients have been covered, however, it’s never easy, being told by my client ….. “if only I had” …… We empathise with those who have faced illness or injury and offer our deepest condolences to the families who have lost a loved one. Going forward, there has been a lot of changes to our industry (reduction levels). Currently we receive commission for risk recommendation business (Life, TPD, Trau- ma & Income Protection), our advice documents (SoA) are paid out of our commis- sions but the changes and decreases to our commission structures have had a flow on effect and unfortunately we are forced to implement changes to keep up with the industry to keep our business sustainable. ASIC have set an educaon standard with expectations that we are to keep up to date with all aspects of training plus regulatory compliance. This all comes at a cost to us and advertently the consumer. We endeavour to be reasonable as we look at changes to our fee structure and cli- ent segmentaon. We look forward to reviewing your circumstances and keep a professional standard at a reasonable cost. All the best for the year ahead. Cheers Bre Le Man
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Protect Your Lifestyle—Issue 24 1
PROTECT YOUR LIFESTYLE
Authorised Representative of Millennium3 Financial Services Pty Ltd AFSL 24252
Brett Le Man & Associates Edition 24—2018
General Advice Warning: The information [including taxation] is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable
professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product. The information [including taxation] is general in nature and may not be relevant to your individual circum-
stances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product
In This Issue
Federal Budget Summary
Do You Have?????
Life, TPD & Trauma
Protect your most
important asset— your
income
10 Tips for Your
Retirement Planning
Investment Bonds
Income Protection
{Agreed Vs Indemnity}
One Pan Recipe
Important Contacts
Welcome to our 24th edition of Protect Your Lifestyle. I hope everybody has had a
great year thus far. For the past 12 months we have had many claims. Fortunately
our clients have been covered, however, it’s never easy, being told by my client …..
“if only I had” ……
We empathise with those who have faced illness or injury and offer our deepest
condolences to the families who have lost a loved one.
Going forward, there has been a lot of changes to our industry (reduction levels).
Currently we receive commission for risk recommendation business (Life, TPD, Trau-
ma & Income Protection), our advice documents (SoA) are paid out of our commis-
sions but the changes and decreases to our commission structures have had a flow
on effect and unfortunately we are forced to implement changes to keep up with
the industry to keep our business sustainable.
ASIC have set an education standard with expectations that we are to keep up to
date with all aspects of training plus regulatory compliance. This all comes at a
cost to us and advertently the consumer.
We endeavour to be reasonable as we look at changes to our fee structure and cli-
ent segmentation.
We look forward to reviewing your circumstances and keep a professional standard
at a reasonable cost. All the best for the year ahead.
Cheers
Brett Le Man
Protect Your Lifestyle—Issue 24 2
FEDERAL BUDGET SUMMARY
Federal Budget Update 2018/19
The announcements in this update are proposals unless stated otherwise.
These proposals need to successfully pass through Parliament before becoming law and may be subject to change during
this process.
What you need to know
The Budget is forecast to return to surplus in 2019/20
with a positive balance of $2.2bn
The economic outlook remains positive with a forecast
surplus in 2020/21 of $1.1bn
Income tax relief for low-income and middle-income
earners —up to $530 per annum via a tax offset—for
four years commencing 1 July 2018
Addressed income tax bracket creep—as part of a seven-
year plan to ultimately eliminate the 37% tax bracket
A major crack down on tax cheats and the black economy
The Medicare Levy will not be increased to 2.5% as pro-
posed in the 2017/18 Federal Budget, instead it stays at
2%
Superannuation—exit fees banned, a 3% passive fee cap
for accounts with balances less than $6,000 and a volun-
tary contribution work test exemption for the financial
year following the financial year people aged from 65 to
74 retire whose balance is less than $300,000
Social security—the Pension Loans Scheme is to be ex-
tended to all older Australians including self-funded retir-
ees, enabling retirement income to be boosted up to
$17,800 per couple without losing the pension or other
benefits
Social security — an increase in the work bonus from 1
July 2019 to try and encourage more Australians into paid
employment
Child care — more than 85% of families will receive the
full Child Care Subsidy from 2 July when the threshold in-
creases to a combined income of $187,000 p.a.
Aged Care—seniors will be encouraged to continue living at
home rather than going into care with the help of $1.6bn
allocated to providing $14,000 home care places over the
next four years
Small business—the $20,000 instant asset tax write-off to
be extended another year to 30 June 2019
Education—schools to receive an extra $24.5bn over 10
years to fund needs-based education—an average increase
of 50% per student
Infrastructure—major spending on rail and road including a
$1bn Urban Congestion Fund to improve traffic flow
Energy costs—estimated to reduce by $400 per year on
average for every Australian household from 2020, courte-
sy of the National Energy Guarantee
Farmers and rural Australia—to benefit from $125m allo-
cated to improve GPS technology and weather forecasting
Protect Your Lifestyle—Issue 24 3
Superannuation changes
Additional contributions opportunity for recent retirees
From 1 July 2019, if you’re aged between 65 and 74 and your
super balance is less than $300,000 you will be exempt from
the work test that otherwise applies to voluntary super contri-
butions. This applies only to the first year in which you fail to
meet the work test requirements, but if you qualify you may
be able to make substantial additional contributions to super.
New fee rules from 1 July 2019
Exit fee on all superannuation account will be banned
Funds on accounts with balances below $6,000 will see a
3% annual cap on passive fees, charged by superannua-
tion funds.
Insurance in Super
The Government’s ‘Protecting Your Super Package’ includes
changes for insurance within superannuation to move from
an opt-out basis to opt-in, for members who.
Have balances of less than $6000
Are under the age of 25 years
Have an account that has not received a contribution in
13 months and are inactive.
These changes are intended to protect retirement savings
from the cost of having premiums for unnecessary or dupli-
cate insurance cover. The measure proposed to start from 1
July 2019 and affect members will have 14 months to decide
whether to opt-in to their existing cover or allow it to cease.
Your financial adviser can help you identify the appropriate
options for you to protect the people who depend on you.
What’s next?
Most changes must be legislated and passed through Parlia-
ment before they apply. If you think you may be impacted by
some of the Budget’s proposed changes, you should consider
seeking professional advice. A financial adviser can give you a
clear understanding of where you stand and how you can
manager your cash flow, super and investments in light of the
proposed changes.
If any of these proposals raise questions, concerns or new
opportunities for you, speak with your financial adviser today.
Overview
The economic plan delivered by Treasurer Scott Morrison on
Tuesday 8 May is centered on Tax:
Providing tax relief to low-income and middle-income earn-
ers
Addressing bracket creep with a seven-year plan that will
see the 37% tax bracket disappear entirely
Maintaining the Medicare Levy at 2%
Cracking down on tax cheats and the black economy
Tax relief and radical reform
The tax relief promised by the tax offset will take effect from 1 July
2018:
People earning up to $37,000 will receive a tax offset of up to
$200
People earning up to $90,000 will receive up to $530
People earning from $90,000 to $125,333 will receive an offset
that tapers to nil.
The radical plan to eliminate the middle tax bracket of 37% is a long
way off, both chronologically and politically—7 years and two elec-
tions. All going well, it will be implemented in three phases culmi-
nating in a tax scale that, from 1 July 2024, will be as is shown in the
below table.
Medicare and health
In the 2017/18 Federal Budget, the Government proposed a substan-
tial increase from 2% to 2.5% to help fund the National Disability Insur-
ance Scheme (NDIS). This would have added the average family ap-
proximately $600 extra per year .* The Treasurer announced that this
will no longer be necessary and the Medicare Levy will stay at 2%.
The Budget also includes an agreement that will see public hospitals
receive over $30bn in extra funding between 2020/21 and 2024/25
*The Daily Telegraph 8 May 2018
Crackdown on welfare cheats, tax cheats, and the black
Economy
The Government aims to save $229m over three years by intensifying
its fraud detection and debt recovery. To stamp out money laundering
and tax evasion, from 1 July 2019, cash payments over $10,000 will be
illegal, they will have to be made by electronic transfer or cheque in-
stead. Multinationals will also be targeted with a crackdown on sta-
pled securities and tightened thin capitalization rules.
Income Tax Bracket Tax on Income
$0—$18,200 0%
$18,201—$41,000 19%
$41,001—$200,000 32.5%
$200,000+ 45%
This information is issued by Millennium3 Financial Services Pty Ltd ABN 61 094 529 987, which holds Australian Financial Services Licence Number 244252 and is a summary of Millennium3
Financial Services Pty Ltd understanding of the proposed Federal Budget 2018/19 changes announced on 8 May 2018. The changes are subject to the passing of legislation and, accordingly, may
not become law or may change. Please note that the information is based on Millennium3 Financial Services Pty Ltd interpretation of the proposed changes as at the date of issue of this docu-
ment. Accordingly, you must not do or refrain from doing anything in reliance on this information without obtaining suitable professional advice. In addition, the information is of a general
nature and may not be relevant to your/your client’s individual circumstances. Before making any investment decision you must consider the relevant PDS, available on request by calling Mil-
lennium3 Financial Services Pty Ltd. This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without obtaining
professional financial advice specific to your circumstances. If you wish to opt out of future communications please contact us. 201805/M3/FBCS/V1
Protect Your Lifestyle—Issue 24 4
Life Cover?
Have you Held your Policy
for 3 or 5 Years?
Have you gotten married,
had a baby or adopted a
child within the last
30—60 days?
Bought a house or Increased an
existing mortgage?
TPD? Trauma?
DO YOU HAVE
You may be able to increase
your existing policy without
further underwriting…
We have listed only a few events
above. For more details contact
us to discuss your policy and see
what options you are entitled to
under your policy.
Your ability to earn an income is your most important asset because your lifestyle depends on it. However, if you had to stop
work tomorrow because of an accident or illness, would you be able to continue to pay your bills and afford the lifestyle you
currently enjoy?
Income Protection cover pays up to 75% of your income to help you and your family meet the cost of living if you are injured
or ill. Meaning you can focus on your recovery instead of the burden of finances.
There are other types of cover to consider too, such as Critical Illness cover and Total & Permanent Disability. All are designed
to help you financially if you can’t work due to illness or injury.
Get personalised advice that’s right for you!
Give me a call today to help you find the right insurance solution and discuss the best way for you to protect your most im-
portant asset – your income.
Protect Your Lifestyle—Issue 24 5
Check that your super fund has your tax file number (TFN). If your super fund doesn’t have your TFN, your concessional
(before-tax) contributions are hit with penalty tax, and you won’t be permitted to make non-concessional (after-tax) contribu-
tions. And as bad things happen in threes, you’ll also be excluded from the co-contribution scheme.
Combining super accounts can save you thousands of dollars in fees, and if you don’t combine them quick-smart, the ATO may
snuffle your member accounts under new compulsory transfer laws that were introduced from July 2013. Note that the super
account thresholds for the ATO snuffling your money were changed again from January 2016 (increased to $4,000), and also
changed again from January 2017 (increased to $6,000). If you’re not sure how many super funds you currently have, then
locating these accounts and consolidating your super can add thousands of dollars to your retirement savings in an instant.
Ensure that you have clear plans about what happens to your super benefits and non-super assets in the event of your death.
Doing some planning now can save your family a lot of heartache, and possibly save thousands of dollars in tax. Identifying
who receives your super benefits when you die (by ensuring you nominate your beneficiaries) becomes more important when
you plan to leave your super benefits to a non-dependant for tax purposes, such as a financially independent adult child.
If your tolerance for ‘New Year’ super resolutions, has already reached its limit, then the SuperGuide article 8 steps to super
success provides a quick overview of what we believe is the bare minimum for anyone hoping for a reasonable superannua-
tion balance on retirement: for example, check fees, investment performance and life insurance.
The first step is to work out when you plan to retire and what type of income you want to have in retirement. You can then
calculate how much money is necessary to finance your preferred retirement income from the age you retire until the day you
die (or beyond if you have dependants you want to look after). Work out how much super and other savings you have now
and what type of cash you will have if you continue your current savings strategy. If there is a gap between how much you’ll
have and how much you want then you have even greater motivation to make the most of the super rules. Alternatively, if
you have substantial assets sitting outside the super system you may want to consider shifting some or all of your super assets
within the super environment.
The level of income you earn will generally determine whether you make after-tax or before-tax contributions. If you pay
more than 15 cents in the dollar tax, then super starts looking attractive from a tax saving point of view. You may also be in-
terested in making before-tax contributions if you want to offset a large capital gains tax bill.
1. Supply TFN to your super fund
2. Combine your super accounts
3. Identify your dependants and non-dependants
4. Aspire to super success in 8 steps
5. Do a financial stocktake
6. Consider making concessional (before-tax) contributions
General Advice Warning: The information is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice . You should obtain and consider a Product Disclosure Statement
[PDS] before making any decision to acquire a product. For further information on this article please go to www.superguide.com.au