2020 will be the year that changed the way many people work. COVID-19 introduced both societal and organisational shifts, with businesses and their employees forced to adapt quickly to new ways of working that included work being carried out remotely and with increased flexibility.

Although it took us by surprise, it has perhaps brought forward many businesses’ plans to create workplaces of the future. It’s presented an opportunity to act now and redefine the future of work, building on what’s been learned throughout the pandemic.

For employees, removing a stressful commute and the need for smart business clothes and adding the ability to get the washing on while the kettle boils has proved a success.

In turn, businesses have experienced increases in productivity and now see further potential to reduce overheads. If working remotely becomes the new way of working, office spaces will be smaller, reducing the cost of rent, cleaning and heating/cooling, even if there is a need to invest in IT systems and cybersecurity.

So, what might our workplace of the future look like, and what might it mean for our environment, social skills and work productivity?

It all starts with strong leadership. Business leaders must map out a path for the return to work, whilst learning from the lessons of COVID-19 to create their workplaces of the future. It’s a significant opportunity to drive positive change – a change that might otherwise have taken years to design and implement, jumping through corporate hoops.

As well as the physical environment, leaders need to recognise managing virtual teams is quite different from face-to-face. The norms that emerge during face-to-face contact take longer to establish via a screen and require far more nurturing and intuition. Employees need to understand what’s expected of them, how decisions are made, what are the appropriate communication channels and how their performance will be measured.

A happy medium

As we return to work, some workplaces will advance quickly, transforming themselves into workplaces of the future, where people and technology co-exist effortlessly. Others may take longer to establish new ways of working. But either way, the future of work is certain to be different from what we’ve known before.

All changes must be sustainable to enable a meaningful, long-term recovery. And while health and safety dominate initial return to work plans, productivity must also be a key consideration. We’ll likely transition to a world where employees will be able to choose how they manage their time between working within the office and remotely.

Source: BT

Australians donate about $10 billion a year to charity, representing an important source of income for the sector.

For many of us, giving to charity is an occasional event – typically small amounts in cash and often as part of attending a fundraiser, attending church or buying a raffle ticket.

In the midst of a global pandemic a lot of people have had health and livelihoods impacted and as a result charities of all types are seeing high and ongoing demand for help.

In giving, just as in investing, having a plan is paramount.

Increasingly, wealthy Australians are using a structure introduced by John Howard in 2001 called a private ancillary fund, which is essentially a tax-free charitable trust formed for the purpose of investing money and distributing the earnings to charity.

So what is a private ancillary fund? And how can it help you find ways to put more structure into your charitable donations?

Fundamentally, a PAF allows a donor to maintain control of assets in a tax-free environment in return for agreeing to donate a minimum percentage of the capital every year to charities.

A PAF is a trust with a corporate trustee, managed by a board that can consist of the founder, family and friends and with a ‘responsible person’ unrelated to the founder sitting as an independent director.

Donations of cash and assets can be made to the fund as often as you like without limit and usually with an associated tax deduction. Bequests of assets in a will to a PAF are exempt from capital gains tax.

So what’s the catch?

There are a few strict rules that need to be complied with. A PAF cannot solicit donations from the public and cannot operate a business or actually conduct charitable work. Instead, it can only manage investments and donate money.

Most importantly, every year the fund must distribute 5 per cent of its value to a charity, with a minimum annual distribution of $11,000.

That mandatory minimum means a PAF is only normally suitable for those of us with more than a few hundred thousand dollars to set aside. Advisors suggest $1m minimum is more sensible.

For those of us with less, there are a number of public ancillary funds that can take donations from the public. They allow smaller donations and yet can still give you control of which charity gets the earnings each year.

It’s worth remembering that you don’t need to be worth tens of millions to make a difference to a charity.

Most charities are quite small operations. Two-thirds of Australian charities have less than $250,000 in annual revenue and more than a third have revenue of less than $50,000.

So even modest donations can have an impact on many charities’ operations.

So how can you get started?

It’s worth having a conversation with your family about how you want to use your wealth for good and how you might want to be remembered.

Some people aim to help their local community where they can have a tangible impact. Others seek to make contributions to solve global problems.

The next step is to consider how exactly you will make contributions. Philanthropy does not have to be limited to cash but can also be stocks and securities, real estate and even jewellery and art.

Knowing the tax implications of charitable giving is also important. Many donations in Australia are tax-deductible in the year they are made or – in some circumstances – over the following five years. The key is that the donation was made to an organisation registered with the Australian Taxation Office as a deductible gift recipient. Deductible gift recipients do not need to be charities: organisations like hospitals, art galleries and schools can also qualify.

In a year bookended by bushfires and this seemingly endless pandemic, perhaps 2020 is the time we all take a look at how we can give back to society.

Reach out to JBS Financial to help to discuss how you can incorporate charitable giving in your financial plan!

Source: Vanguard

There’s no question young people have been hit hard by the COVID-19 pandemic. From casual job losses to widespread hiring freezes, they’re on the front line. Experts fear the youth unemployment rate, which was 16.3% in July, will remain stubbornly high for years to come

So what are young people to do? Unable to get secure work, many will opt to live at home for longer or return to the family home, accelerating an already a growing trend.

What’s the impact on parents?

While most parents are happy to help out, having adult children at home is an added cost. Mozo estimates that one-third of parents spend between $51 and $100 a week to support their adult children, with another third spending up to $200 a week.

How can parents support their adult children?

As the pandemic stretches on, what started out as a temporary move home can become more permanent. So how can you support your kids, when they have limited options?

First of all, it’s important to know that your children are facing an extremely unusual set of circumstances. The pandemic-fueled job losses are coming on top of years of stagnant wage growth and job insecurity, creating the perfect storm for anyone trying to enter the workforce.

Positive parental support will be essential to keep your kids engaged and motivated to get through the next few years.

Foster resilience

This is the ideal time to reinforce resilience in your children. Resilience refers to “a person’s ability to cope with ups and downs and bounce back from the challenges that life can throw at us.”

There’s literally no better skill to equip your children with. A resilient young person will be better able to keep events in perspective, work through problems and seek out help and support. You can find a range of tools and resources on resilience on the BeyondBlue website.

Encourage perseverance

In addition, while job prospects might be slim, it’s important for anyone who is out of work to stay actively engaged with the job market. That might mean proactively pitching for work, having networking meetings, seeking a mentor, volunteering for a local organisation or taking a short course to improve their skills.

This will help your kids grow their network and open up the ‘hidden job market’. It also fosters a sense of purpose that’s essential for getting through challenges like COVID-19.

Teach financial independence

While it might be second nature to support your kids financially, it doesn’t always help them in the long run. It’s important to try and foster financial independence as early as possible, to help prepare them for a time when they’ll need to provide for themselves.

Asking for a contribution towards their living expenses is one way to do this, provided they have a regular source of income. Or, if you’re not keen on asking for a monetary contribution, discuss how else they can contribute around the home.

Defining roles and responsibilities

Much like living in a share house, multiple adults living under one roof can cause tensions, especially if not everyone is contributing equally.

In a share house environment, house rules and expectations allow everyone to live together peacefully. Observing house rules, being considerate of other people’s property and keeping the place clean are the basics. It’s best to explain the ground rules before your child moves back in, so there are no misunderstandings.

Managing the cost

The cost of having your adult kids living at home may be coming at a time when your own financial situation is less secure than usual. With the regular unemployment rate expected to top 10 per cent, it’s understandable if you find yourself facing some of the same challenges as your children.

If finances are a concern, we suggest reviewing your family budget straight away to see where you can cut back temporarily. Have a discussion with your children early on about what they can contribute in terms of rent or household duties. Even if they don’t have an income, there may be an alternative.

For example, if your son or daughter helped out with cooking and cleaning, could you pick up another shift at work? Or could you pay them to do some of the work around the home? Try to think outside the box about how everyone can work together to maximise your income and minimise your expenses for the duration.

We all want to do the best by our children, especially during difficult times like a global pandemic. By enabling them to be more resilient, supporting them while they search for work or further their education and preparing them financially for life out of home, you can enjoy a happy household for years to come.

Reach out to the JBS Financial to help to discuss your situation and how you can best manage your money.

Source: Money & Life

Following on from an already unprecedented Government response to the Australian bushfires and the COVID-19 pandemic in 2020, which saw just over $300 billion in announced economic relief, Treasurer Josh Frydenberg has announced the next phase of support included in the 2020-2021 Australian Budget.

Relief measures throughout 2020 have sent Australia into a projected $213.7 billion deficit, with the nation’s debt level expected to reach $1.1 trillion within four years.  Due to the unprecedented events this year, the Government’s focus with the budget has shifted from delivering the long-awaited budget surplus to stimulating the economy and fostering recovery from Australia’s first recession since 1991, and will likely remain this way for the near future with the ultimate goal of keeping the unemployment rate below 6%.  Despite this, the Government holds an optimistic view on the road to Australia’s economic recovery, forecasting activity to pick up strongly in late 2020 and early 2021.

The key take-outs from this year’s Budget include:

• Bringing forward personal income tax cuts that were scheduled to begin in 2022, designed to provide an estimated $17.8 billion in additional relief.
• Initiatives to spur business investment and spending, including temporary full expensing of investment, the temporary introduction of tax loss offsets against previous years, and a series of tax concessions for small to medium businesses.
• Incentives for employers to take on new apprentices and trainees through wage subsidy programs, with the goal of creating more jobs and assisting those displaced by COVID-19.
• Commitments to infrastructure spending over the next 10 years, with additional spending allocated to the decade-long infrastructure pipeline.
• Super reforms designed to help members pay less in fees and reduce the number of unnecessary extra accounts, as well as extra accountability for super funds performing poorly.
• Additional support payments for welfare recipients.

JBS Views & Planning Opportunities

We feel the some of the changes in the budget helps reiterate the importance of obtaining ongoing advice and continuing to review your situation to ensure that you are structured appropriately and are positioned well for the future.  Particularly with the income tax cuts, these may increase your surplus income and this may present an opportune time to decide how best to allocate these additional funds.

On a positive note, there are no significant changes to superannuation, providing certainty to pre-retirement and retirement planning strategies.

As in the past please remember all measures outlined in this newsletter are proposals only, each of the proposals must still pass Parliament before they’re legislated.

Tax Changes

Personal Income Tax Cuts – from 1 July 2020

The Government announced that Stage 2 of the tax cuts outlined in last year’s budget will be brought forward by two years, leading to the following changes that will be backdated from 1 July 2020:

• The top end of the 19.0% tax rate threshold will increase from $37,000 to $45,000.
• The top end of the 32.5% tax rate threshold will increase from $90,000 to $120,000.
• The low-income tax offset (LITO) will increase from $445 to $700.
• The low- and middle-income tax offset (LMITO) will remain at $1,080 and will remain in place for an extra year.

This initiative will provide an additional $17.8 billion in relief to support economic recovery.  Below is an illustration of the estimated tax savings targeted to low- to middle-income earners:

Stage 3 of this tax cut plan will keep its effective date of 1 July 2024.  At this stage, the 37% tax rate will be abolished, and the 32.5% tax rate will reduce to 30% for those earning between $45,000 and $200,000.

JBS View:

We welcome this bring-forward of the tax cuts as it keeps more money in our clients hands, we also view it as a positive step towards help reinvigorate the economy, although that is contingent on people spending the extra tax savings they receive, whilst many will pay off debt.

Business Changes

The Government has announced a series of temporary tax relief measures for businesses, aimed at reducing tax and red tape and optimising cash flow to encourage growth.

Business Tax Cuts – from 6 October 2020

Eligible businesses will be able to deduct the full cost of eligible capital assets first used or installed by 30 June 2022.  This includes full expensing on the cost of new depreciable assets and the associated costs of improvement for businesses with an annual turnover of less than $5 billion, and full expensing on the cost of second-hand assets for businesses with an annual turnover of less than $50 million.

Temporary Loss Carry-Back

Eligible businesses will temporarily be able to carry losses incurred from FY20, FY21 and FY22 backwards to previously taxed profits from FY19 onwards, to receive a tax refund upon lodging their FY21 and FY22 tax returns.  Companies will be able to carry losses forward as per usual.

Tax Concessions

Eligible businesses will have access to up to ten small business tax concessions in three phases, and the turnover threshold for eligible businesses has increased from $10 million to $50 million.  These three phases are:

• From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and prepaid expenditure.
• From 1 April 2021, eligible businesses will be exempt from the 47% fringe benefits tax on car parking and multiple work-related portable electronic devices provided to employees (i.e. phones and laptops).
• From 1 July 2021, eligible businesses will be able to:
• Access simplified trading stock rules
• Remit PAYG instalments based on GDP-adjusted notional tax
• Settle excise duty and excise-equivalent customs duty monthly on eligible goods under the small business entity concession
• Have a two-year amendment period apply to income tax assessments for income years starting from this date.

JBS View:

With any deduction, it is important to remember that it’s a deduction, not free money.  While a wider range of businesses can now get an immediate deduction for an asset purchase, business owners should not go out and spend the money unless the asset is required.  The asset should be the focus with the extra benefit being the tax deduction.  The loss carry-back measure will allow businesses to generate cash refunds using earlier losses to provide a cash flow boost, although it appears that the earliest this can be received is after lodging the FY21 tax return.

Superannuation Changes

Super ‘Stapling’

This measure will effectively mean that an employer must pay super to a new employee’s existing super account, rather than the employer’s default super fund.  This will effectively tie an existing super account to an employee should that employee start a new job and is designed to reduce the number of unintended multiple accounts being created with balances that easily erode due to unnecessary fees.

Underperforming Funds

Super funds will now be required to meet annual performance tests, with underperforming funds to be penalised by not being allowed to take on new members until performance improves.

Previous Changes Deferred

The Government has announced deferrals on the following previous proposals relating to super:

• The proposal to increase the maximum allowable members in a self-managed super fund and small APRA fund from four to six has received Royal Assent.
• The proposal to remove the capital gains discount for Managed Investment Trusts and Attribution Managed Investment Trusts has been revised to 3 months after Royal Assent.
• The proposal to reduce red tape for superannuation funds has been deferred to 1 July 2021.
• The proposal to start the Retirement Income Covenant has been deferred to 1 July 2022.

JBS View:

We welcome any positive changes to the Superannuation rules, especially when it comes to working to reduce fees on clients’ accounts, which should help reduce the likelihood of fees eroding retirement savings.  The greater transparency will also allow you to make informed decisions regarding Super and what you’re invested in.

Jobs Initiatives

JobMaker Hiring Credit – from 7 October 2020

The Government has proposed to pay a hiring credit for up to 12 months to employers who take on new young workers.  A credit will be paid for each new employee that works a minimum of 20 hours per week, provided he/she received the JobSeeker Payment, Youth Allowance or Parenting Payment for at least one month prior to being hired.  This credit will be $200 per week for each new employee aged between 16 and 29, and $100 per week for each new employee aged between 30 and 35, paid quarterly in arrears.  This initiative is estimated to support around 450,000 jobs and will be valid for three years.

Apprenticeships Wage Subsidy – from 5 October

Businesses of any size who take on new apprentices or trainees between 5 October 2020 and 30 September 2021 will be able to claim the new Boosting Apprentices Wage Subsidy. Under this subsidy, businesses will be reimbursed up to 50% of an apprentice or trainee’s wage worth up to $7,000 per quarter.  This subsidy will be capped at 100,000 places and is designed to support school leavers and workers displaced by COVID-19 related disruption.

JBS View:

We welcome these changes as the Government is focusing on getting people back to work after record job losses this year as a result of COVID-19, which in turn will help aid our economy in the recovery post-COVID.

Social Security & Health

Economic Support Payments – from December 2020

The Government is providing two separate one-off Economic Support Payments of $250 to those receiving:

• Age Pension
• Carer Allowance
• Carer Payment
• Commonwealth Seniors Health Card
• Disability Support Pension
• Double Orphan Pension
• DVA Gold Card
• DVA Payments
• DVA Seniors Card
• Family Tax Benefit
• Pensioner Concession Card (PCC) holders

Individuals eligible for the Coronavirus Supplement of $250 per fortnight, such as those receiving the JobSeeker payment, are not eligible for the one-off $250 Economic Support Payment.

Aged Care

The Government has committed to an additional $746.3 million in funding the aged care sector, including funding for 23,000 additional home care packages across all levels, which is designed to improve waiting times. Additionally, the Government has proposed one unified system for classifying the care needs of older Australians, which should provide an improvement to navigating the aged care system.

JBS View:

JBS understands the impact Aged Care has on client’s financial situations and the importance of having flexibility on whether you have in-home care or via an Aged Care facility.  We welcome the additional funding and home care packages, and the choices this provides to those utilising the services.

Other Initiatives

Infrastructure Initiatives

Long Term Plans

The Government has committed an additional $10 billion to the 10-year transport infrastructure pipeline, which is estimated to be supporting 100,000 jobs on worksites already.  This pipeline includes the planned Melbourne to Brisbane Inland Rail and the Western Sydney International Airport.  Additionally, the Government has set $2 billion aside for water infrastructure projects, including dams and pipelines.

Shovel-Ready Projects

The Government is committing an additional $3 billion to shovel ready projects, which includes an extra $2 billion for road safety upgrades as well as an additional $1 billion for councils to upgrade roads and footpaths.  These funds are provided on a “use it or lose it” basis, whereby unused funds will be redeployed to states and territories that have successfully used their funds.  This is designed to speed up projects and bring forward project spending to the short-term.

Health Initiatives

COVID-19 Vaccine Expenditure

The Government has committed to providing $1.7 billion to secure access to over 84.8 million doses of potential vaccines developed by the University of Oxford and the University of Queensland, with $24.7 million to ensure enough syringes to deliver shots when they available.  This comes on top of $6 million that has been provided in funding to support research and development of COVID-19 vaccines at Australian universities.

Mental Health

The Government has responded to the mental health impacts of the COVID-19 pandemic, with an additional $148 million in funding for mental health support provided.  This includes the increase in Medicare-funded psychology sessions from 10 to 20.

Mental health is something we all need to work to protect and maintain. Having the right tools and techniques in your back pocket could leave you better prepared for the tougher times and allow you to create a positive, productive environment both at work and at home.

With an estimated 11% of Australians suffering depressive disorders and 20% from anxiety according to a report from Beyond Blue, taking a proactive approach towards mental health is something we all need to do.

Taking responsibility for protecting your own mental health is often the first step to a clearer mind and a happier life. There’s plenty of advice out there about how best to perform your mental housekeeping, but it’s really all about finding a solution that works for you.

Originally developed by the New Economics Foundation, there are Five Ways to Wellbeing, which can easily be incorporated into daily life. They include:

Connect with people

Strong relationships are the foundation of mental wellbeing. It may be spending more time with family and friends, or finally getting around to speaking to that colleague who works on the other side of the building, but connect with people as often as you can.

Be active

Always make time in your week to do some exercise. It could be social like a game of tennis, or just a walk in the
great outdoors, but a healthy body is a healthy mind.

Keep learning

Stimulate your brain by picking up an old skill or trying out a new one. Now’s the time to learn a language or do that professional development course at work you’ve been thinking about.

Give

Giving back to the local community or helping out a friend or colleague is a great way to boost your self-esteem and raise a smile.

Take notice

This means taking the time for yourself to notice and appreciate what is around you. A great way to do this is through mindfulness and meditation and calming breathing techniques.
Taking simple, proactive steps to improve and maintain your mental health both at home and in the workplace is the first step in improving your overall wellbeing
If you are struggling with your mental health there is always someone who can help you. Call LifeLine on 13 11 14 for 24-hour support.

The health and medical information is general information only and is not a substitute for advice from a qualified medical or other health professional. Always consult your general practitioner or a medical specialist.

Carrying debt into retirement is something many Aussies will face, but the good news is there are a number of things you can do now while you’ve still got time on your side and earning an income.

1. Take simple steps to minimise what you owe

• Work out your debts and what they total
• Do a comparison of what you earn, owe and spend
• Look into whether you might benefit from rolling your debts into one
• Pay your debts on time to avoid additional charges
• Try to pay the full amount rather than the minimum owing
• Look at whether you can afford to make extra repayments
• Shop around for providers with lower interest rates and no annual fee
• Have a contingency plan, such as an emergency fund, if you can afford to
• If you’re experiencing financial hardship, talk to your providers, as most can assess your situation and help you find alternative payment plans.

2. Get serious about having a budget

If you’re approaching retirement, you may be prioritising things such as living costs, utility bills, health care and even helping the kids out. With many Aussies looking at a retirement (which in reality, could span a few decades), another thing to give some thought to is recreation and your social life.

A good starting point when it comes to setting up a workable budget, so you can manage these things, is figuring out what money you have coming in, what expenses you have and what you might be able to put aside.

Meanwhile, if you’re wondering how much money you’ll need generally, the Association of Superannuation Funds of Australia (ASFA) benchmarks the annual budget needed to fund different retirement lifestyles, based on an assumption people own their home and are relatively healthy.

June 2020 figures show individuals and couples, around age 65, looking to retire today would need an annual budget of $43,687 and $61,909 respectively to fund a comfortable lifestyle, or $27,902 and $40,380 respectively to live a modest lifestyle.

3. Consider what money you might have access to

The money you use to fund your life in retirement will likely come from a range of different sources, including the following:

Super – Generally you can start accessing super when you reach your preservation age, which will be between 55 and 60, depending on when you were born. Knowing your super balance is a crucial part of planning for retirement, as it’s likely to form a substantial part of your savings.

If you’ve got more than one super account, there may also be advantages to rolling your accounts into one, such as paying one set of fees, which could save you hundreds of dollars each year. However, there could be other fees and features lost in the process, so make sure you’re across everything before you consolidate.

Investments, savings, inheritance – You may be planning to sell shares or an investment property, or use the money you’ve saved in a savings account or term deposit to contribute to your retirement. An inheritance or proceeds from your family’s estate may also help in your later years.

The government’s Age Pension – Depending on your circumstances and assets, you could be eligible for a full or part Age Pension from age 65 to 67 onwards (depending on when you were born), or you may not be eligible for government assistance at all.

4. Know where your money is sitting and what it’s doing

Having spare money sitting in one place mightn’t be the best thing. For instance, if you’ve got cash in a transaction account, could you be earning more if it was invested elsewhere, or even placed in an offset account linked to your home loan to reduce what you pay in interest?

Looking at different investment options inside your super could also potentially generate more income. Do keep in mind though that a more conservative approach may be a better option as you get older, as when you’re younger, you generally have more time to ride out market highs and lows.

5. Consider downsizing your home or refinancing

Find out what you need to know about downsizing your home as this could help you top up your retirement savings.

You might also be interested to know that when you reach age 65, you can make a tax-free contribution to your super of up to $300,000 using the proceeds from the sale of your main residence. There will however be potential advantages and rules that you’ll want to be across.

Refinancing, whereby you replace your existing home loan with a new one, could also create cost benefits and more financial flexibility.

Remember, your living arrangements in retirement should be based on more than just your finances. Your health, partner, family and what activities you want to pursue once you stop work will play a part.

6. Think about working a bit longer

This could help you to boost your savings as well as your super balance so that you have a more comfortable lifestyle in retirement. In fact, the main reason most older Aussies said they wanted to stay in the workforce was financial security.

It’s also interesting to note, retirement isn’t necessarily a one-time event, particularly when it comes to the 45 to 54 and 55 to 59 age groups, with as many as 26.7% returning to employment annually.

Take control of your money and reach out to the JBS Financial to help to discuss your situation.

Source: AMP Insights

Uncertainty around COVID-19 might be increasing your stress levels about losing your job, but here are five ways to soften the financial blow.

In April, Australia hit its highest unemployment rate in five years, and with the Federal Treasurer expecting an unemployment rate of around 10% by the end of the year, many Aussies may be feeling a little uneasy about their future job prospects.

Which sectors have been hardest hit?

COVID-19 has affected all areas of the workforce, but analysis by AMP reveals recruitment, retail and hospitality make up almost half of all early super release withdrawals, suggesting people in these sectors may have been more greatly affected by job losses.

Uncertainty around the reopening of interstate and international borders makes any tourism rebound also hard to predict.

How to get on the front foot with your situation?

It’s important to know that a genuine redundancy payment is made when you’ve been retrenched because there’s no longer a need for the job that you’re doing.

Here are some ways to help make sure you get what’s yours if you’re faced with redundancy so you can be well prepared for the future.

1. Know what you’re entitled to

What your employer is required to pay you will depend on your conditions of employment, so ask your boss or HR department (which might be easier if you’re still working), or be sure to check your redundancy payment summary carefully to ensure you get what it is you’re owed.

Fair Work’s redundancy calculator (www.calculate.fairwork.gov.au/endingemployment) can help you find what redundancy pay and entitlements to expect. It’s also a good place to find details of pay and conditions if you’re covered by a registered agreement.

Meanwhile, keep in mind that apart from your actual redundancy payment, you may be eligible for things like a payout of accrued annual leave and long service leave.

When the redundancy happens, if you’re under your Centrelink Age Pension age (which will be between 65 and 67 depending on when you were born), the special tax treatment is also given to genuine redundancy payouts, which means some payments you receive will be tax-free up to a certain limit based on your years of service.

2. Sort out your money situation, including benefits and super

The size of your payout may determine the time you can afford to be out of work, what you’ll be able to live on from week to week, along with how you’ll tackle financial responsibilities until you find another job. With that in mind you may want to:

Create a workable budget

You can do this by writing down your daily living expenses, and what you estimate any upcoming bills and loan repayments will total. This way you’ll be across all your outgoings, as well as where you may be able to make minimum repayments and cut back on other forms of spending.

Put your money somewhere useful

It might be tempting to go on a holiday, undertake renovations or pay off all existing debts with your redundancy packet, but if you don’t find work within a certain timeframe, you may leave yourself short.

Think about where you could put your money, still have access to it and potentially reap added benefits. Options may include high-interest savings accounts or a mortgage offset account that allows you to redraw funds while reducing what you pay in interest on your home loan.

Apply for financial hardship with your lenders

If your redundancy payout starts to run out and you’re struggling to make repayments, you may be able to seek assistance from your lenders by claiming financial hardship.

All providers must consider reasonable requests to change their terms in instances where you may be suffering genuine financial difficulties and feel help would enable you to meet your repayments, possibly over a longer period.

Find out if you’re eligible for government assistance

There’s a range of Federal and State government assistance available related to COVID-19. Make sure you’re across these and don’t miss out on support you might be able to access straight away.

These may change as the economy emerges from hibernation, so bookmark the pages relevant to you, in case you’re out of work for longer than you anticipate.

Depending on your age, different benefits may be appropriate at different ages – for instance, most workers may look to JobSeeker payments where they’re out of work, while the Age Pension may be more appropriate for older Aussies.

Waiting periods may apply to some benefits, so keep that in mind when it comes to any payout you receive, as you may need it to cover your living expenses for a while.

Loss of a job and income in the family could also mean that you may qualify for Family Tax Benefits, or for a higher rate of payment.

Look into your super situation

See how much money you have in super and think about the effect a break from work may have on your balance.

If you have insurance inside super and are paying premiums with your super money, consider how this may affect your retirement savings if the premiums aren’t being offset by contributions.

You might also be considering early access to super during COVID-19, where the Federal Government is allowing eligible people affected by the outbreak to access up to $10,000 of their super as a tax-free payout between 1 July and 31 December 2020.

There may be short-term advantages to this, but there may also be some disadvantages that you’ll want to make sure you’re across.

3. Create a plan for your return to work

You might have a bit of leeway to take some time off, but when you do look to join the workforce again, a good place to start will be your resume. Make sure your previous roles and responsibilities are up to date and that you’ve listed all your skills and achievements.

In the meantime, set up relevant online job searches, tidy up your LinkedIn profile, touch base with recruiters in your field and don’t be afraid to target companies directly.

4. Contemplate the benefits of training

Depending on whether you want to remain in your industry or make a career change, further training could help you gain new qualifications, keeping in mind this can still cost time and money.

A new education assistance package has recently been made available to help displaced workers upskill and retrain during COVID-19. A number of free online courses are also available from TAFE, while Open University offers a range of short and longer education courses for all levels.

5. Seek further support

There’s a range of support and resources available.

Talk to your financial adviser as they may pick up on things that could otherwise be missed

Check out AMP’s free webinar – Managing through a redundancy

Find a range of articles on AMP’s COVID-19 support hub

Check out our FAQs on ways AMP is helping clients experiencing financial hardship

Seek free financial counselling from the National Debt Helpline on 1800 007 007

Take a look at the government’s Moneysmart website for further financial education.

If you’re finding it difficult to cope and need to speak to someone, there are a range of mental health and family support services available through:

Beyond Blue – 1300 22 4636

1800 RESPECT – 1800 737 732

Lifeline – 13 11 14

Get on the front foot and reach out to the JBS Financial to help to discuss your situation.

Source: AMP Insights

If you’re feeling concerned about how the pandemic will affect your super balance, here are our tips to help protect and grow your super.

What can affect my super balance?

In Australia, your employer is required by law to pay a minimum percentage of your eligible income to a complying superannuation fund or retirement savings account. This is known as the Superannuation Guarantee and it’s currently set to 9.5%.

Your super contributions are then invested by your superannuation fund on your behalf, according to your chosen investment options. This means your super is subject to normal market fluctuations.

Your super is also exposed to a range of administrative fees, charges and premiums, which can eat away at your balance if you’re not vigilant.

Isn’t my super protected by law?

You might be surprised to learn that your superannuation savings are not protected by the government.

Last year, the federal government introduced a package of reforms to help stop low account balances from being eroded by unnecessary insurance premiums and fees. This was called the Protecting your Superannuation Package.

However, this protection only applies to accounts that meet certain criteria, such as having a balance below $6000, and not receiving any contributions for 16-months. These inactive or low-balance accounts are transferred to the ATO for administration. You can find out more about the reforms on the ATO website.

For everyone else, it’s up to you to keep an active eye on the health of your super.

So, here are five things you can do to help conserve and grow your superannuation, even during a global economic downturn.

1. Check your superannuation investment options

Because superannuation is a long-term investment, it’s important to check that your selected investment options are right for your age and stage of life.

Taking on the wrong level of risk at the wrong time in your life can erode your super balance. For example, when you’re starting out, there’s more time until retirement to ride out some of the ups and downs that come with higher levels of risk. But as you near retirement, you might want to focus on preserving your superannuation balance.

If you’re not sure how your super is invested, take the time to check your account either online or by contacting your super fund for advice. Be sure to find out whether they charge fees for advice, as these can be deducted from your super balance.

2. Switch to a low-cost superannuation provider

Fees and charges are deducted directly from your account, so they can quickly erode your super balance. Check your statements regularly and make sure you’ve compared your super fund with other providers.

3. Avoid withdrawing your super early

Most people can access their super once they reach the ‘preservation age’, which is between 55 and 65 years old, depending on when you were born.

There are also some special circumstances where you may be able to access your super early, such as severe financial hardship, including COVID-19.

While a cash injection of $10,000 or $20,000 might sound like a welcome relief when you’re struggling to pay your basic living costs, it’s important that you exhaust all other avenues first, because accessing your super early can have a significant impact on your retirement income.

How significant? Well, the FPA estimates, conservatively, every $1000 you have in super at age 30 is worth $4500 by the time you reach 60. Multiply that by $10,000 or $20,000 and you can see what you might be missing from your retirement nest egg.

For this reason, it’s really important to explore other options first and get expert advice from a financial planner before making a withdrawal.

4. Make regular contributions

One of the ways to protect and grow your super balance is to consider making regular contributions. You can do this by salary sacrificing a set amount every week. If that’s not possible, you could consider making extra contributions whenever possible, such as depositing your tax return, gifts or bonus.

5. Get professional advice

You can’t beat professional financial advice to help you reach your retirement goals. A financial planning professional can review your unique situation and goals and advise you on the right investment and contribution strategies for you. They can also advise you on the best forms of retirement income to conserve your super balance.

With the right superannuation investment strategies in place, you’ll be well prepared to weather the economic disruption brought about by COVID-19. It’s worth taking the time now to review and optimise each aspect of your super above to get the most from your investments.

Are you needing some reassurance that your super is protected? Reach out and discuss your situation with the JBS Financial team. 

Source: Money & Life

If your New Year’s resolution was to spend less time glued to your phone, you’ve probably found that unexpectedly challenging this year. While the impact of COVID-19 differs from state to state, many of us have experienced social isolation and the call to stay and work from home where possible, resulting in an increase in the amount of time we are spending online.

In fact, data demand over the NBN increased by more than 70 to 80 per cent during daytime hours in March compared to figures calculated at the end of February. Due to greater usage, internet speeds across Australia slowed to cope with the uptake.ⁱ

It’s not just the time we are spending online that’s being impacted, our relationship with technology is evolving as we adapt to the changing world around us.

The benefits of technology

While technology usage often gets a bad rap when it comes to mental health, it has also brought positives into many of our lives, especially during 2020: greater work flexibility, connection to loved ones, and access to online resources and support groups.

During social isolation, many of us relied on technology to keep our lives as normal as possible. For some that meant working from home, keeping up a regular exercise regime with online classes, or having a regular video chat scheduled with family and friends.

Changing nature of how we use our devices

Technology has stepped up and is filling the gap in areas we previously hadn’t relied on it for. With gyms and boot camps off-limits across many parts of Australia during stages of lockdown, online workouts started popping up on platforms such as Zoom and Facebook.

Online shopping is understandably booming as the trend away from ‘bricks and mortar’ retail quickens pace and people embrace the convenience and safety of shopping online during pandemic conditions. Based on Australia Post deliveries, there was an 80% increase in online shopping during the months of April and May.ⁱⁱ

When concerts were cancelled and movie theatres and galleries closed, we also turned to our devices increasingly for entertainment. Netflix saw a boom in their subscribers, up a whopping 15.8 million users in April, while Instagram Live was up 70% in the US in March.^{iii, iv}

Transforming how we work

Many workplaces have had to put in place processes to support working remotely. Prior to the pandemic, besides face-to-face meetings, most workplace correspondence was done via email or phone. Due to social isolation and increased feelings of loneliness as a result, video meetings and catch-ups have become more of the norm. The cameras on our phones and computers have been able to make us feel more ‘in person’ as a result.

Collaboration has also been on the rise, with collaborative platforms and online communities such as Slack, Asana and Trello making it easier to work together while we’re apart.

Looking out for others

Much of our online activity has tended to be a reflection of our self-absorption. The ‘it’s all about me’ approach of many influencers and content creators was tempered during the crisis by a more giving approach. We saw an outpouring of generosity, from entrepreneurs offering time to listen to pitches, master yoga instructors teaching free classes and musicians performing regular concerts. People have banded together to keep us feeling connected.

Local communities used technology to engender a sense of support and inclusion, with groups springing up to assist others in a myriad of ways such as offering to shop for those who were in isolation, providing free produce from gardens, or toilet paper for those who missed out in the panic buying frenzy early in the pandemic, to just making sure that everyone in the community had a ‘voice’.

Our relationship with our devices and the way we conduct our digital lives is ever-evolving. If we take the positives that have come from the way the crisis has influenced our lives in the digital realm, we’ll continue moving in a direction that not only makes our lives easier but also supports genuine human interaction.

i https://www.abc.net.au/news/2020-04-01/coronavirus-internet-speeds-covid19-affects-data-downloads/12107334

ii https://auspost.com.au/business/marketing-and-communications/access-data-and-insights/ecommerce-trends

iii https://www.abc.net.au/news/2020-04-22/netflix-warns-record-users-will-not-last/12171800

iv https://www.businessinsider.com.au/instagram-live-70-percent-increase-social-distancing-psychologist-explains-2020-4?r=US&IR=T

After a year when even the best laid plans have been put on hold due to COVID-19, people who were planning to retire soon may be having second thoughts. You may be concerned about a drop in your super balance, insecure work, or an uncertain investment outlook.

Whatever your circumstances, a financial tune-up may be required to get your retirement plans back on track. You may even find you’re in better financial shape than you feared, but you won’t know until you do your sums.

The best place to start is to think about your future income needs.

What will retirement cost?

Your retirement spending will depend on your lifestyle, if you are married or single, whether you own your home and where you want to live.

Maybe you want to holiday overseas every year while you are still physically active or buy a van and tour Australia. Do you want to eat out regularly, play golf, and lead an active social life; or are you a homebody who enjoys gardening, craftwork or pottering in the shed?

Also think about the cost of creature comforts, such as the ability to upgrade cars, computers and mobiles, buy nice clothes, enjoy good wine and pay for private health insurance.

It’s often suggested you will need around 70 per cent of your pre-retirement income to continue living in the manner to which you have become accustomed. That’s because it’s generally cheaper to live in retirement, with little or no tax to pay and (hopefully) no mortgage or rent.

Draw up a budget

To get you started, the ASFA Retirement Standard may be helpful. It provides sample budgets for different households and living standards.

ASFA suggests singles aged 65 would need around $44,183 a year to live comfortably, while couples would need around $62,435.ⁱ Of course, comfort is different for everyone so you may wish to aim higher.

To put these figures in perspective, the full age pension is currently around $24,550 a year for singles and $37,013 for couples. As you can see, this doesn’t stretch to ASFA’s modest budget, let alone a comfortable lifestyle, especially for retirees who are paying rent or still paying off a mortgage.

Then there is the ‘known unknown’ of how long you will live. Today’s 65-year-olds can expect to live to an average age of around 85 years for men and 87 for women. The challenge is to ensure your money lasts the distance.

Can I afford to retire?

Once you have a rough idea what your ideal retirement will cost, you can work out if you have enough super and other savings to fund it.

Using the ASFA benchmark for a comfortable lifestyle, say you hope to retire at age 65 on annual income of $62,000 a year until age 85. Couples would need a lump sum of $640,000 and singles would need $545,000. This assumes you earn 6 per cent a year on your investments, draw down all your capital and receive a part age pension.

Add up your savings and investments inside and outside super. Subtract your debts, including outstanding loans and credit card bills, to arrive at your current net savings. Then work out how much you are likely to have by the time you hope to retire if you continue your current savings strategy.

There are many online calculators to help you estimate your retirement balance, such as the MoneySmart super calculator.

Closing the gap

If there’s a gap between your retirement dream and your financial reality, you still have choices.

If you have the means, you could make additional super contributions up to your concessional cap of $25,000 a year. You may also be able to make after-tax contributions of up to $100,000 a year or, subject to eligibility, $300,000 in any three-year period.

You might also consider delaying retirement which has the double advantage of allowing you to accumulate more savings and reduce the number of years you need to draw on them.

These are challenging times to be embarking on your retirement journey, but a little planning now could put you back in the driver’s seat.

Get in touch if you would like to discuss your retirement strategy and discuss your situation with the JBS Financial team.