Financial support for those affected by bushfires

The last few months have seen tragic loss of lives, properties and wildlife. If you have been affected, here are some resources that may help ease some of your financial worries:

  • The ATO’s bushfire support page offers impacted parties a range of tax assistance including:
    • extra time to pay debts or lodge tax forms
    • help finding lost tax file numbers
    • re-issuing income tax returns, activity statements and notices of assessment
    • help re-constructing lost tax records
    • fast tracking refunds owed
    • payment plans tailored to your circumstances
    • remittance of penalties or interest charged during the time you have been affected
    • lodgment and payment deferrals
    • you can also call their Emergency Support Infoline on 1800 806 218.
  • Australian banks are also ready to help those affected by the fires.
    Read more from the Australian Banking Association  or contact your bank directly to access disaster assistance such as:

    • deferral of scheduled loan repayments
    • waiving of fees and charges
    • debt consolidation
    • restructuring existing loans without incurring fees
    • deferring interest payments
    • additional finance to help cover cash flow shortages
    • deferring credit card payments
    • increasing emergency credit card limits.
  • Financial assistance is available from the Federal Government including the Disaster Recovery Allowance.

Tax office to crack down on luxury items owned by the rich

At the end of last year the ATO began cracking down on tax dodgers by demanding information from 30 insurance companies about their wealthy customers during the past five years.

Insurers were instructed to provide policy information on assets that met these thresholds:

  • Aircraft: $150,000
  • Marine vessels: $100,000
  • Fine art: $100,000 per item
  • Motor vehicles: $65,000
  • Thoroughbred horses: $65,000

“If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a $3m yacht then this is likely to raise some red flags,” ATO deputy commissioner Deborah Jenkins, said.

The tax office is targeting 350,000 taxpayers, with particular attention on high net worth taxpayers who had not declared capital gains on certain assets, such as paintings and sculptures.

The information provided will also help expose people who claimed GST on assets that were used for personal purposes or bought expensive items through their self-managed super funds under the pretence of an investment.

Only assets owned since July 2015 will be traced, as the ATO already has data on the two previous financial years.
Anyone who suspects they have not complied with their tax or superannuation obligations will likely receive reduced penalties if they proactively bring their situation to the attention of the ATO.

Superannuation and payroll changes to watch out for in 2020

The new year brings with it a raft of payroll changes, many aimed at reducing wage theft and non-compliance with awards.There are also several changes to superannuation to ensure fairer outcomes for employees.

Paying super on gross rate of pay
As of 1 January 2020, employers are no longer allowed to pay super only on the reduced salary of an employee after their salary sacrifice has been taken out. Instead, employers must now pay super on the employee’s gross rate of pay, which includes any salary the employee chooses to sacrifice.

Salary sacrifice and compulsory contributions
The first day of January also marked the date that salary sacrifice can no longer contribute to the super guarantee that your employer is legally required to pay. For example, prior to 2020, if an employee salary sacrificed the full superannuation guarantee of 9.5%, the employer wasn’t legally required to contribute any further amount. Starting this year, employers must always contribute the full 9.5%, regardless of how much the employee salary sacrifices.

The superannuation guarantee amnesty
A proposed bill likely to come into effect this year is the Superannuation Guarantee Amnesty bill. This provides a six-month amnesty for employers to correct any unpaid super contributions and declare these to the ATO. After this period, penalties up to 200% will apply.

Notifying employees of their annualised salary
Starting 1 March 2020, employers must notify employees of their annualised salary and their maximum ordinary working hours outside of the 38-hour week. The employer must make sure that any employee who falls under one of 22 modern awards and works more than the 38-hours isn’t paid below the minimum wage when averaging out all hours.

Tracking Hours
Employers must also record employee start, finish and break times, which must also be confirmed by the employee for each roster or pay cycle. Excess hours worked in that period must be paid to the employee as overtime if their annual salary does not pay them at or above the minimum wage for their total hours.