COVID-19 lockdowns have added another layer of complexity as many work patterns and behaviours changed. Fringe benefits tax (FBT) is one of Australia's most disliked taxes because it's cumbersome and generates a lot of paperwork. A fringe benefit is a 'payment' to an employee or an associate (an associate is someone related to you such as a spouse, child or even a friend), but in a different form to salary or wages. A benefit might be as simple as hosting a work Christmas party, providing car parking, using a work vehicle, or providing the goods or services of the business at a reduced rate to what the public pay. If your business is not already registered for FBT, it's important to understand if fringe benefits have been provided. Generally, the ATO will look closely at unregistered employers and where there are mismatches in data. With the FBT year ending on 31 March, we look at the key issues and the Australian Taxation Office's (ATO) hotspots. What is exempt from FBT? Certain benefits are excluded from the FBT rules if they are provided primarily for use in the employee's employment. These include: Portable electronic devices (e.g. laptop, iPad, printers, GPS, etc). Larger businesses are limited to the purchase or reimbursement of one portable electronic device for each employee per FBT year; A handbag, briefcase or satchel to carry items you are required to use and carry for work, such as laptops, tablets, work papers or diaries. Be warned that if you are using these bags for a mix of personal and work use, then the use needs to be apportioned and will not be fully exempt from FBT. The ATO is not going to pay for your Gucci bag even if you do throw your iPad into it on occasion. Tools of trade. Also, if the item or service provided to the employee is less than $300 and is a one-off, it's generally classed as a minor benefit and exempt from fringe benefits tax. COVID-19 & FBT The ATO has changed how it will approach FBT compliance this year because of the impact of COVID-19 on work patterns and conditions. Emergency assistance such as flights and accommodation – emergency assistance to provide immediate relief to employees because the employee is at risk of being adversely affected by COVID-19 will generally not be subject to FBT. This might include: Expenses incurred relocating an employee, including paying for flights home to Australia. Expenses incurred for food and temporary accommodation if an employee cannot travel due to restrictions (domestic, interstate or intrastate). Benefits provided that allow an employee to self-isolate or quarantine. Transporting or paying for an employee's transport expenses including car hire and transport to temporary accommodation. For fly-in fly-out workers, this includes temporary accommodation and meals where they were unable to return home because of border or travel restrictions. Health care – Providing flu vaccinations to employees is generally exempt from FBT because it is work-related preventative health care. However, health care treatment is only exempt from FBT if it is provided to your employees at your workplace or adjacent to your worksite. The cost of ongoing medical costs are generally not exempt. Company cars – a company car garaged at an employee's home will generally attract FBT. However, this FBT year, many company carparks and places of business were closed. As a result, the ATO has stated that for employers using the operating cost method, if the "car has not been driven at all during the period it has been garaged at home, or has only been driven briefly for the purpose of maintaining the car, we will accept that you don't hold the car for the purpose of providing fringe benefits to your employee." But, you will need to maintain odometer readings that show the car has not been used. If the car was used, fringe benefits generally applies. However, if the car was used for business purposes then this use reduces the taxable value. If the car was only used for business, the taxable value may be reduced to zero. Logbooks – COVID-19 is likely to have impacted on driving patterns and the ATO have made some concessions where the 12 week log book period was interrupted. If you are already using the logbook method and have an existing logbook in place, you can still rely on this logbook. However, you must keep odometer records for the year to show how much the car has been driven during the year including during any lockdown period. If this is the first year you have used a logbook, you still need to keep an accurate 12 week logbook. However, if COVID-19 impacted driving patterns during that 12 weeks, then the ATO will allow you to adjust the use indicated in the logbook to account for the change in driving patterns. Not-for-profit salary packaging – NFP employers often provide salary-packaged meal entertainment to employees to take advantage of the exempt or rebatable cap. For the FBT year ending 31 March 2021, the ATO has stated that they will not look into these arrangements where meals are provided by a supplier that was authorised as a meal entertainment provider as at 1 March 2020. Cancellation fees – non-refundable costs for cancelled events are exempt from FBT unless the employee paid for the event themselves and was reimbursed by you. That is, if the employer paid for the event then the cancellation fee is the employer's obligation as no benefit was provided. If the employee paid for the event, the cancellation fee is the employee's obligation that has been reimbursed. It really depends on who the arrangement was between. ATO 'red flags' One of the easiest ways for the ATO to pick up on problem areas is where there are mismatches in the information provided to the ATO. Common problem areas include: Entertainment deductions with no corresponding fringe benefit – A simple way for the ATO to pick up on a problem is when an employer claims a deduction for expensive entertainment expenses – meals out, tickets to cricket matches, etc., – but there is not a corresponding recognition of the fringe benefit. Entertainment expenses are generally not deductible and no GST credits can be claimed unless the expenses are subject to FBT. If your business uses the 'actual' method for FBT purposes and the value of the benefits provided is less than $300 then there might not be any FBT implications. This is because benefits provided to a client are not subject to FBT and minor benefits provided to employees (i.e., value of less than $300) on an infrequent and irregular basis are generally exempt from FBT. However, no deductions should be claimed for the entertainment and no GST credits would normally be available either. If the business uses the 50/50 method, then 50% of the meal entertainment expenses would be subject to FBT (the minor benefits exemption would not apply). As a result, 50% of the expenses would be deductible and the company would be able to claim 50% of the GST credits. Employee contributions reduce fringe benefits tax but not recognised in income tax return – Where employee contributions reduce the amount of fringe benefits tax payable (for example where an employee makes a contribution relating to a car fringe benefit), a corresponding amount needs to be recognised in the income tax return of the employer.

A sole trader who was able to backdate his ABN has won access to JobKeeper payments in a recent case before the Administrative Appeals Tribunal (AAT). To be eligible to access JobKeeper as a business participant (for example, as a sole trader), the rules require a business to have an active ABN on 12 March 2020. The rules also provide the Tax Commissioner with the discretion to allow further time for an entity to register for an ABN. In this case, a sole trader, Mr Apted was an expert property valuer who had been in business for himself in various structures since 2012. In 2014, he set up as a sole trader and registered for an ABN and GST. In 2018, he decided to retire, cancelling his GST registration and later relinquishing his ABN with effect from 4 June 2018 - although he was aware that he had the flexibility to start up again if the need arose or his expertise was required. In June 2019, former colleagues encouraged him to accept new work and he was contacted soon after by a potential client who engaged him to provide his valuation services in September 2019. Mr Apted made it known that he was available for referral work. Mr Apted stated that he was unaware that he needed to reactivate his ABN as he believed that an ABN was only required if he intended to register for GST. Given he did not expect to earn over the GST threshold of $75,000, he did not see this as necessary. His clients also did not withhold tax from payments to him as required when payments are made to a supplier without a valid ABN. On 31 March 2020, Mr Apted applied and had his ABN reinstated. Then on 20 April 2020, he applied for JobKeeper but this was denied as he did not have a valid ABN on 12 March 2020. In June, Mr Apted phoned the Registrar of the Australian Business Register seeking to have the date of effect of his ABN corrected to align with his resumption of trade. The Registrar subsequently adjusted the date of effect of the ABN to 1 July 2019. With this adjustment, Mr Apted believed he had an active ABN at 12 March 2020 required by the JobKeeper integrity rules. The Tax Commissioner however did not accept the backdated ABN as an "active" ABN and declined to use his discretion to allow Mr Apted access to JobKeeper. However, the Administrative Appeals Tribunal (AAT) found: "We are satisfied the applicant is the kind of person who was intended to benefit from the Jobkeeper scheme. While his business was small and his income irregular, he still satisfies all of the eligibility criteria … There is nothing to be achieved by denying him access to the payments in order to make a point about the desirability of obtaining an ABN." The AAT set aside the Commissioner's decision in favour of Mr Apted directing the ATO to enrol Mr Apted in JobKeeper for the relevant period. A statement from Holding Redlich, the legal firm representing Mr Apted says, "Small businesses that have been refused JobKeeper might now qualify for JobKeeper – and be entitled to make claims back until the beginning of the scheme in April 2020." The ATO has lodged an appeal with the Federal Court of Australia in the Apted case and has stated that it will not pre-emptively review decisions of eligibility until the outcome of the appeal has been handed down. Giving further hope to those who had previously been denied access to JobKeeper under a strict interpretation of the rules is the recent report from the Inspector General of Taxation (IGT). JobKeeper and the Cashflow boost require that the business had some business income in the 2018-19 income year and notified the ATO of this by 12 March 2020 or made some supplies connected with Australia in a tax period that started on or after 1 July 2018 and ended before 12 March 2020 and notified the ATO of the supplies (e.g., on an activity statement) by 12 March 2020. In her report, the IGT has made it clear that, "…for the purposes of the [JobKeeper] and [Boosting Cash Flow] support measures, a taxable supply can be made where an entity makes or acquires a financial interest, for example, by opening a bank account, as this constitutes the making of a financial supply. Such a supply might have been made during the commencement of the business, well before the business had made its first sale." For any business seeking redress on a JobKeeper or Cashflow boost eligibility decision, strict timeframes apply. Despite the ATO's reticence to engage on these issues until the outcome of the Federal Court is known, it is important to lodge the necessary applications or objections to ensure the window of opportunity is not missed. Take-outs An ABN backdated by the Business Registrar may meet the JobKeeper eligibility criteria Simply opening a bank account and advising the ATO of the account (for example when registering for GST) in the relevant time period (by 31 December 2019 for quarterly or 29 February 2020 for monthly taxpayers) might meet the eligibility test to make a supply in Australia – even if the business had not made any sales.

The impact of COVID-19 has been felt very differently from region to region. Fortunes vary wildly between business operators subject to ongoing lockdowns and trading impediments to those benefiting from the "new normal". For those severely impacted by COVID-19, JobKeeper might be available. The third and final phase of JobKeeper started on 4 January and runs through until 28 March 2021. To receive JobKeeper, employers need to have experienced a sufficient downturn (a 30% threshold applies to most entities) in their actual GST turnover in the December 2020 quarter compared to the same period in 2019 – although alternative tests exist. The payment rate for employers is $1,000 per fortnight per employee or business participant who worked 80 hours or more over a specific 28 day period, or $650 per fortnight per employee or business participant for those who worked less than 80 hours in the relevant period – a reduction from previous JobKeeper payment periods. Assessing eligibility, managing the decline in turnover test, calculating GST turnover for the decline in turnover test, and managing the 80 working hours requirement for the differential payment rates can all be complex. We've outlined a few of the key issues for employers in need of relief: My business did not previously qualify for JobKeeper. Can I access it now? Your business can potentially access JobKeeper for the period between 4 January 2021 and 28 March 2021 even if it didn't qualify for JobKeeper for the period between 28 September 2020 and 3 January 2021 or for the original JobKeeper scheme period that ended on 27 September 2020. The fact that you have not previously enrolled in JobKeeper or met the eligibility conditions prior to the start of the latest phase of the JobKeeper scheme should not prevent you from accessing JobKeeper from 4 January 2021. For example, if you could not pass the decline in turnover test for the September 2020 quarter this does not automatically prevent you from being able to access JobKeeper for the period between 4 January 2021 and 28 March 2021 as long as your business can pass the decline in turnover test for the December 2020 quarter. We have been in JobKeeper previously. Do my employees need to complete a new nomination form for JobKeeper from 4 January 2021? Employees should not need to provide you with a new enrolment form if they have previously provided a valid nomination to you. You should ensure that you have a copy of the original form on file and a copy of the notification that you sent to the employee confirming that their details were provided to the ATO and advising them of the payment rate that applies to them. What's included in GST Turnover for the decline in turnover test? To access JobKeeper, employers need to satisfy a decline in turnover test. The decline in turnover test for JobKeeper from 4 January 2021 compares actual GST turnover in the December 2020 quarter (October 2020, November 2020 and December 2020) to the same period in 2019 (alternative tests are available in some instances where this comparison is not appropriate). Understandably, we're receiving lots of questions about what is included in GST turnover and how it is calculated. In general, if your business is registered for GST you must use the same method that is used for GST reporting purposes. For example, if your business is registered for GST on a cash basis then a cash basis needs to be used to calculate current GST turnover for the purpose of the JobKeeper decline in turnover test for the December 2020 quarter. Your GST turnover includes proceeds from the sale of capital assets, such as property, equipment or licenses, unless the sale is input taxed. Current GST turnover includes taxable and GST-free supplies, but should exclude input taxed supplies such as residential rental income and financial supplies like dividends, interest etc. JobKeeper and ATO cash flow boost payments should be excluded from the calculation along with other payments that don't represent consideration for a supply made by the business such as certain State based grants. If your business has received payments in advance, then you will normally need to recognise these payments as part of the GST turnover calculation, even if the goods or services have not been provided to the customer yet. For example, if your business accounts for GST on a cash basis then you need to recognise the payment for GST purposes as it is received and include it in your GST turnover calculation, even if the services haven't been provided. There are some special rules where security deposits apply to defer the GST liability but these rules are reasonably limited in their application. And, if your business is part of a GST group, each entity needs to calculate its GST turnover as if it were not part of the group. That is, supplies made by another group member should not be included in GST turnover for the purposes of the decline in turnover test. When I stood down my employees, they started working for someone else to get by. Can they still receive JobKeeper? To access JobKeeper, employees need to have been either full-time, part-time or long terms casuals of your business on either 1 March 2020 or 1 July 2020. If the employment relationship remains intact (their employment has not been terminated and they haven't accessed JobKeeper from another business), then the fact that the employee is performing some work for another entity doesn't necessarily prevent ongoing access to JobKeeper with you, their original employer. Of course, the employee can only receive JobKeeper from one employer and there are a number of eligibility conditions that need to be satisfied.

You’ll never know what’s possible until you try Collins Hume Partner, Kelly Crethar, is passionate about helping business owners achieve their goals in business. Kelly is a highly qualified and experienced business services specialist with a passion for helping business owners achieve their goals. With over 20 years of experience in the field, Kelly has a wealth of knowledge in business planning, structuring, management, acquisitions, valuations, and regulatory compliance, with a special focus on professional services, hospitality and retail, building and construction, property development, health, and larger intricate structures industries. "I love working with people and helping them achieve their goals," says Kelly. "Understanding the financial side of a business is something that doesn't come easily for everyone." "I love being able to interpret the financials into information that business owners can easily grasp." Kelly joined Collins Hume in 2017 and believes it is the firm's commitment to helping the community which she admires. "We often speak to our clients about work/life balance and that is a focus here at Collins Hume too." Kelly has been the presenter of Collins Hume's popular Better Business Workshops which are designed to educate business owners. She acknowledges that it can be daunting for young people to enter into the world of accounting and business advising but says the industry has so much to offer and having a female perspective on business is so valuable. "You'll never know what's possible until you try, so go for your dreams and never give up," Kelly added. When she's not working, Kelly enjoys spending time with her family and golden retriever, Max, and can often be found at the beach or enjoying the great outdoors. She is also an avid cook and is co-opted to keep the books for her husband's business. Kelly holds a Bachelor of Business (Accounting & Business Law) from Southern Cross University and is a Certified Practising Accountant (CPA), Xero Certified Advisor, and Registered Tax Agent. She began her career in 2001 as a Trainee Accountant in public practice and worked her way up to becoming a Senior Manager before transitioning to the corporate sector, where she spent five years as a Corporate Accountant in the road transport industry. Kelly joined Collins Hume in 2017 where she helps clients navigate the complex world of business. Her areas of expertise include business advisory around growth strategies, profitability and systems implementation, as well as business regulatory compliance. Copyright 2021. Collins Hume Ballina and Byron Bay

On 1 January 2021, new laws came into effect that introduce a new, simplified debt restructuring and liquidation framework for small business. Drawing on key features of the Chapter 11 bankruptcy model in the United States, the new system aims to speed up the insolvency process, reduce costs and where possible, restructure to help the business survive. Where survival is not possible, it's hoped that the quicker insolvency process will deliver greater returns for creditors and employees. Under previous insolvency laws, the insolvency process treated all businesses the same regardless of size. The new laws step away from the 'one size fits all' model. The simplified debt restructuring and liquidation framework is available to incorporated entities with liabilities of less than $1 million (around 76% of insolvencies are businesses with less than 20 employees) with non-complex debt. The liquidation framework also requires that a company is up to date with its entitlements and tax obligations. The new laws are intended to help manage the tide of insolvencies expected now that the temporary insolvency related relief for financially distressed businesses has ended (the COVID-19 relief measures which protected directors from insolvent trading and raised the threshold for action by creditors, ended on 31 December 2020.) There is no question that the temporary measures in tandem with the stimulus measures such as JobKeeper have kept some 'zombie' businesses afloat. In November 2020, 306 businesses entered external administration compared to 748 in November 2019. In general, the number of insolvencies has dropped by around 200 to 300 each month since March 2020 compared to 2019 figures. Debt restructuring For financially distressed but viable companies, simplified debt restructuring is available. Under this process, the directors resolve that the company is insolvent, or is likely to become insolvent at some future time, and that a small business restructuring practitioner should be appointed. Once a practitioner has been appointed, the directors generally have 20 days to develop a plan that sets out an approach to repay the company's existing debts. Only the company directors can propose a debt restructuring plan to the company's creditors and the creditors have the opportunity to vote on the plan electronically or virtually (previously creditors had to be physically present or appoint a proxy). During this time, the company directors retain control of the business - which is very different to the previous laws where the administrator took control of the company during voluntary administration. To prevent the new laws being abused by phoenixing, a company is not eligible to use the debt restructuring process if a director of the company or the company itself has previously been through this process or the simplified liquidation process. The new laws are also not available where the company has already entered into an external administration process. Streamlined insolvency If a company is not viable (the company will not be able to pay its debts in full within 12 months), the directors can resolve to voluntarily wind up the company and access the streamlined insolvency process. Once the resolution has been passed, the directors have five business days to provide the appointed liquidator with a report on the company's business affairs and a declaration that the company meets the eligibility criteria to access the simplified liquidation process. If the liquidator agrees that the company qualifies for the simplified liquidation process, the creditors are advised of the process that will be adopted. The creditors can reject the approach if 25% or more by value, oppose the process. Streamlined insolvency is designed for companies with relatively simple affairs and is limited to those that have liabilities under $1 million and are up to date with their taxation obligations. It uses the existing insolvency framework but simplifies the interaction with creditors and ASIC. For example, outside of the simplified system, the liquidator may convene a creditor's meeting at any time to keep creditors up to date, find out the creditor's wishes, or to approve the liquidator's fees. The simplified system removes the obligation for a liquidator to convene these meetings with communication managed electronically. And, under the simplified systems the oversight of creditors is limited, creditors for example cannot appoint a committee of inspection to monitor the conduct of the liquidation. There are strict timings that apply to the insolvency process. If you are concerned that your business will not be able to meet its obligations, please contact Collins Hume as soon as possible and we will review the situation for you. Where assistance is required, we can refer you to a qualified insolvency or small business restructuring practitioner.

Find out if you qualify and how to apply. What is a primary producer? A primary producer is a person or incorporated body who cultivates or uses their own or someone else's land for their own benefit: for the production of fruit, grains, flowers, vegetables, tobacco or farm or agricultural produce of any description for dairy farming, poultry or other bird farming, pig farming, bee keeping, or oyster or fish culture for a nursery as a pastoralist for the rearing or grazing of horses, cattle or sheep who gather leaves from which eucalyptus or other oil is to be distilled. For example, fish farmers and plantation forest cultivators are primary producers and are eligible for registration concession. Primary producers claiming the concession for their primary producer vehicles are in most cases farmers using vehicles to cart their own primary produce to market. Companies who are in the transport/haulage business and cart other people's primary produce for hire or reward are not eligible for the concession. Primary producers are not: commercial fishers taking fish from open waters and not purposefully enclosed water for breeding timber loggers where the timber is from a natural grown forest and is not sown and grown freight and transport companies who cart other people's primary produce for hire or reward. Primary producer vehicle requirements To get a concession, the vehicle must be a motor vehicle (not used for let or hire), owned by the primary producer, incorporated body or rural co-operative. While on road and road-related areas, the vehicle must be principally used for: carting primary products that the primary producer or another primary producer has produced carting leaves which the primary producer or another primary producer has gathered and from which eucalyptus or some other oil is to be distilled carting goods of any kind for use in the primary producer's business or another primary producer's business, or in the primary producer's household or another primary producer's household purposes connected with the clearing of land that the primary producer or another primary producer proposes to use for primary production. Primary producer vehicles are not: used for let (leased) used for hire (rented) used to receive a fee or reward (including a fee or reward from another primary producer). What is the registration concession? Primary producer vehicles receive the following concessions. Light vehicles (up to 4.5 tonnes GVM) Cars and station wagons - private rate of vehicle tax. Trucks and trailers - 55% of business rate of vehicle tax and capped. Tractors - 55% of business rate of vehicle tax and capped. Heavy vehicles (over 4.5 tonnes GVM) Applicable registration charge or vehicle tax, whichever is lower. Applying for a primary producer concession To apply for a concession you must provide a Declaration of Eligibility for a Registration Concession when you: get a new NSW registration get seasonal registration transfer registration change to primary producer registration usage. You must also provide the documents listed below to support your application. This is to prove your eligibility for the concession. If you cannot provide the documents, the vehicle cannot be registered for the primary producer concession. A declaration signed by a registered tax agent or accountant, stating the applicant is a primary producer as defined by the Motor Vehicles Taxation Act 1988 And one of the following documents: A Tax Averaging Certificate or Tax Assessment Notice from the Australian Taxation Office (not more than two years old), or A letter from the Australian Taxation Office confirming the applicant is registered as a primary producer (not more than one year old). Your registration may be suspended or cancelled if you do not supply one of the documents above when requested. You must also notify NSW Roads and Maritime within 14 days if you no longer qualify for a primary producer concession. You should visit a service centre to do this. Farm vehicles that don't need registration Some vehicles used for the purpose of primary production do not have to be registered. These include vehicles solely used to cross a road or road-related area which divides land used for the purpose of primary production. The following types of agricultural implements don't need registration: implements towed by a vehicle trailers towed by an agricultural machine irrigating equipment augers conveyors harvester fronts and harvest bins. Examples of agricultural machinery are tractors and harvesters. Source: Transport for NSW

Given it will most likely be the largest debt that you pay off in your lifetime, consider a proactive ongoing approach to paying off your home loan. This can reduce the amount of interest you pay, and decrease the life of the loan. In turn, you can free up cash flow sooner and direct it elsewhere, such as saving and investing for the future. One consideration is refinancing (or switching) if you find a more appropriate home loan. Home loan refinancing Home loan refinancing occurs when a borrower repays their home loan with one lender (the previous lender) using the proceeds of a new home loan obtained from another (the new lender). Here is a broad outline of the steps involved in the refinancing process: The borrower contacts the new lender and lodges an application with all required documentation. The new lender considers the documentation and assesses the application. The new lender conditionally approves the application and sends a letter of offer to the borrower. The new lender orders a property valuation. The borrower accepts the offer. The borrower completes and submits a Discharge Authority Form request with the existing lender. The existing lender prepares the Discharge of Mortgage form and associated documentation for settlement. The new lender pays the existing lender the amount owing on the loan. And, the existing lender gives the new lender the certificate of title and Discharge of Mortgage form. The new lender submits the certificate of title, Discharge of Mortgage form and the new mortgage to the relevant land titles office.(1) So, why can refinancing be a key consideration in terms of taking an ongoing proactive approach to paying off your home loan? One reason is that you may save on unnecessary home loan interest. For context, according to the ACCC's Home Loan Price Inquiry final report: "A significant number of borrowers have not switched lenders for several years. As at December 2019, almost half of all variable rate loans were originated at least four years ago. As borrowers' loans get older, the gap between what they pay and what borrowers with new loans pay widens. For example, as at September 2020: borrowers with home loans between three and five years old were, on average, paying around 58 basis points above the average interest rate for new loans borrowers with home loans between five and 10 years old were, on average, paying around 71 basis points above the average interest rate for new loans borrowers with home loans greater than 10 years old were, on average, paying around 104 basis points above the average interest rate for new loans" (2) When considering the above, approximately 53% of existing borrowers are unaware of their current interest rate. Furthermore, nearly one-third of existing borrowers wouldn't consider refinancing unless they were offered an interest rate at least 60 basis points (equivalent to 0.6%) lower than their current one. This can often come down to financial disengagement, and many existing borrowers presume they probably won't save much (by way of meaningful savings) through refinancing. According to recent data from the Reserve Bank of Australia^ on housing lending rates for the month of October 2020 (and taking into consideration all lending institutions and all loans*): the lending rate for outstanding owner-occupied housing credit was 3.13% the lending rate for new owner-occupied housing credit was 2.66%. This is a 47 basis point (equivalent to 0.47%) difference between the lending rates of existing and new borrowers. From a long-term perspective, 47 basis points can add up to meaningful savings. Here is a simple example regarding a standard variable rate owner-occupier home loan with principal and interest repayments-and, an existing borrower: * This is a basic example-it doesn't, for example, take into account the effect of potential interest rate movements over time or any refinancing costs that may apply, such as discharge fees, application fees or legal fees. ^ Standard home loan products are those supplied with a range of add-on features, such as an offset account. Moving forward When it comes to refinancing your home loan, there can be a range of reasons why you may want to change from your existing lender to a new lender including: If your circumstances have changed, or you've had your home loan for a few years, then refinancing could offer you the chance to take advantage of more flexible features or competitive interest rates. As it stands, there are over 100 home loan lenders in Australia offering a combined total of nearly 4,000 different home loan products. Refinancing could also enable you to use your home equity to invest, consolidate debt or access cash to fund expenses such as education costs or home improvements/renovations. At the end of the day, it's important to do your homework so you can make an informed decision on whether refinancing is appropriate for you. This can include seeking professional advice. Lastly, please remember, there may not be a need to refinance. For example, you may have the option of asking your existing lender for a better rate or switching to a cheaper, but still appropriate product with them. If you have any questions regarding this approach, please contact us so we can put you in touch with our advice partners at EWAR or at Regional Finance Solutions. (1) Home Loan Price Inquiry final report, p.8 (2) Home Loan Price Inquiry final report, p.18 * Variable-rate, fixed-rate, interest-only, and principal-and-interest housing credit basis. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd.

This tends to be the moment when we also make new resolutions for the year ahead. For context, a resolution is a firm decision to do or not to do something. And, the making of a resolution can often be sparked by our need or want, upon reflection, to seek positive change in an area of our life. This may be especially the case when reflecting on the 2020 calendar year. The 2020 calendar year was a year unlike any other in recent memory-testing us financially, physically, mentally, and emotionally over an extended period. The flow-on effect of policies implemented to combat COVID-19 (e.g. social distancing and restrictions), saw many of us experience a reduction, or loss, of our earnings (work and/or investment-related). We may also have been more cautious with our spending, despite our earnings remaining the same. This may have been due, in part, to our concern over the state of the economy and rising unemployment-pointing to a possible reduction, or loss, in our earnings in the future. In both instances, this may have shone a confronting light on our existing strengths, weaknesses, opportunities, threats, values and priorities-and shown us where change was required. With this in mind, we discuss personal finance-related resolutions below. Personal finance-related resolutions When it comes to personal finance-related resolutions, this can encompass many different things such as earning, spending, saving, investing, donating, and paying off debt. Potential resolutions could include to: earn more money goal: upskill or retrain in your chosen profession with X course spend less money goal: reduce your personal and household bills by $X per week stick to a budget goal: use a budget tracking tool to help stick to your budget of $X per week save more money goal: save $X per week in a separate high-interest savings account or in super donate more money or time goal: donate $X or X hours of your time this year to your chosen charity pay off debt goal: pay off an extra $X of debt each week, or $X this year As you can see, we have also included goals. This is in recognition that resolutions can often fall by the wayside without thinking about and planning how they can actually be achieved. Also take stock of, and reflect upon, your existing circumstances (financial situation, goals and objectives) regarding areas of your personal finances, such as your: investments superannuation estate planning debt management insurance planning cash flow management By doing this, you can zero in on specific areas where you need or want positive change. However, before you get started with making your own resolutions, and setting your own goals, it's important to understand that resolutions aren't often achieved. For example, in the context of New Year's resolutions, roughly 36% of us tend to 'throw in the towel' in the first month of making our resolutions-and, when all things are said and done, 88% of New Year's resolutions fail. There can be a number of reasons for this, such as the wrong mindset, poor time management, unrealistic expectations, undesirable habits, getting distracted with life, or ill-defined (or no) goals and objectives. As such, you may find that using the SMART principle for your goal setting proves beneficial, for example: S for Specific – What goal do you want to achieve? And, why? M for Measurable – How will you track your progress towards your goal? A for Assignable – What do you, and others, need to do to achieve your goal? R for Realistic – Is your goal achievable, given your available resources? T for Time-based – When will you expect to achieve your goal? Additional inclusions can be 'E for Evaluate' and 'R for Re-adjust' (SMARTER)-these can be important in terms of tracking your progress towards achieving your goal and making changes when appropriate. Moving forward 2020 was a challenging year, testing us all in one way or another. Let's take the insights gained and lessons learnt, and put them to good use-moving forward in a positive direction: "The new year stands before us, like a chapter in a book, waiting to be written." (Melody Beattie) "For last year's words belong to last year's language, and next year's words await another voice." (T.S. Eliot) "What the new year brings to you will depend a great deal on what you bring to the new year." (Vernon McLellan) Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd.

For some of us, in terms of estate planning and the management of our affairs, our main focus can often be on drafting a will-and putting arrangements in place for assets (e.g. super) that may not be covered by our will. These matters primarily centre on how we would like our affairs managed in the event of our passing. Importantly, thought should also be given to the management of our affairs while we are still alive. With this in mind, below is a brief overview of powers of attorney, and the different types that may be available and their benefits. Please note: Laws governing powers of attorney may vary in each state and territory. Please consider seeking professional advice to better understand how they may relate to your personal circumstances. Powers of Attorney overview In broad terms, a power of attorney is a legal document that gives authority for someone or a number of people (the attorney/s) that you (the donor or principal) appoint to act on your behalf regarding the management of your affairs. To make a power of attorney, you must have mental capacity-meaning you're deemed capable of understanding the nature, significance and effect of making a power of attorney when you sign the legal document. Appointing an attorney can be beneficial in the event you find yourself unable to manage your affairs, for whatever reason, either now or in the future. For example, if you suffer ill health, become confined to hospital, travel overseas, or are unable to attend a financial institution or real estate agency, or government office. An attorney can be a family member or a friend or someone else that you trust. However, in general, they must: be at least 18 years old, not be bankrupt or insolvent under administration, and not be your paid carer, health provider, or accommodation provider. This authority generally centres on financial matters (including related legal matters) and may include, for example, buying/selling shares, managing an investment property or operating a bank account. As an example, a recent report* estimates that in Australia there are several hundred thousand bank accounts being operated under a substitute decision-making arrangement, such as a power of attorney. Power of Attorney types When it comes to powers of attorney, the two main types are: A general power of attorney, which gives authority for someone to act on your behalf on financial matters, either broad or more specific (e.g. only managing your investment property or making all of your financial decisions for the time you're on holidays). This type of authority may commence as soon as it's signed by you and accepted by the person you appoint as your attorney-alternatively you may wish to state when you would like this type of authority to commence. Furthermore, this type of authority remains valid until one of the following occurs: it reaches its expiration date, it's revoked by you, it's cancelled or suspended by a relevant court or tribunal, you pass away or you lose your decision-making capacity. An enduring power of attorney is similar to a general power of attorney, however, this type of authority continues even if you lose your decision-making capacity. This type of authority may be of great assistance, should you lose the capacity to manage your affairs through illness, accident or advancing age. Please note: A medical power of attorney may also be possible-depending on your state or territory-and gives authority for someone to act on your behalf on medical matters. This can often be included in an enduring guardianship or enduring power of attorney. Considerations It's important to understand that giving someone the authority to act on your behalf is a serious decision. They should be someone that you trust will act in your best interests-and they should have the capacity and ability to make the required decisions should the event arise. It's important to consider making a power of attorney before you need it. This can be particularly true when it comes to an enduring power of attorney. As previously mentioned above, once you have lost mental capacity, you can't make a power of attorney. It's important to consider having a conversation with those you wish to appoint-as well as seek the advice of an estate planning professional to understand your options, the possible outcomes of your decisions, and make sure they align with your goals and objectives. Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. Source: The different types of powers of attorney. (2020). Retrieved from https://ewar.financialknowledgecentre.com.au/kcarticles.php?id=2895. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd. *Australian Government, Attorney-General's Department. (2020). Enhancing protections relating to the use of Enduring Power of Attorney instruments. Consultation Regulation Impact Statement February 2020.

However, when it comes to retirement and retirement intentions, there can be common threads. For example, according to 2018-2019 ATO data*: The average age of retirement was 55.4 years. The top three reasons retirees left their last job included: they reached retirement age or became eligible for super; they experienced sickness, injury or disability; or they were retrenched, dismissed or no work was available for them. The main factor influencing a person's decision about when to retire was financial security. For people who were intending to retire, the average age they planned to retire was 65.5 years. The Government's Age Pension remains the main source of income for most retirees, followed by super. In terms of income from super, depending on your personal circumstances, there may be a number of options available. For example, income via a super retirement income stream, such as a: lifetime income stream; fixed-term income stream; account-based income stream; or non-commutable income stream. Importantly, a non-commutable income stream or transition to retirement income stream (TRIS) may be of benefit if you are still working, but nearing retirement, and looking to either: receive additional income; boost your super savings and reduce your tax; or reduce your work hours, whilst maintaining your income level. Below is an overview of the main points about a TRIS, inclusive of the two types of TRIS: accumulation phase and retirement phase. Accumulation phase TRIS To be eligible to commence a TRIS, you must meet a condition of release, namely, reached preservation age (determined by your date of birth, see below): To commence a TRIS, you need to transfer some or all of your super benefits to a pension account. No limit applies to the amount of super benefits that you can transfer to support a TRIS-referred to as the transfer balance cap (for more information, see below). The value of the assets supporting a TRIS form part of your total super balance. Upon commencing a TRIS, you can elect to have the TRIS (and income payments) transferred to an eligible dependant following your passing-referred to as a reversionary beneficiary nomination. Rollovers or contributions can't be made to a TRIS once it has been commenced. To receive rollovers or contributions (Super Guarantee and personal), you need to keep an accumulation account open. Earnings (investment income and capital gains) from the assets supporting a TRIS are generally taxed at a maximum rate of 15%. Lump-sum withdrawals can't be made from a TRIS with the exception of, for example, unrestricted non-preserved benefits, family law splits, or commutations/'rollbacks' to an accumulation account. Income payments from a TRIS must be between 4% and 10% of the account balance each year. Please note: The minimum drawdown requirements for retirement income streams, such as a TRIS, has been reduced by 50% for the 2019-20 and 2020-21 financial years. Income payments from a TRIS must be received at least once per financial year (except for the first financial year if you commence the TRIS in June). Please note: You can elect to receive income payments from a TRIS either fortnightly, monthly, quarterly, half-yearly, or yearly. The taxable component of income payments from a TRIS attract a 15% tax offset if you are between preservation age and 59. All income payments are generally tax-free if you are aged 60 or over. Insurance can't be held in a TRIS. To hold insurance, you need to keep an accumulation account open. Retirement phase TRIS An accumulation phase TRIS moves to a retirement phase TRIS when you meet a condition of release with a 'nil cashing restriction', such as permanent retirement, attaining age 65, permanent incapacity, or terminal illness. Please note: Aside from attaining age 65, you generally need to notify your super trustee that you have met one of the conditions of release listed above for the TRIS to move to a retirement phase TRIS-alternatively, you may have the option to commute your accumulation phase TRIS and commence an account-based pension. Importantly, when this move occurs, and with regards to what has been covered above, the following applies: A limit applies to the amount of super benefits that can support a TRIS-referred to as the transfer balance cap, which is currently set at $1.6 million (indexed) per person. Please note: If you only use a portion of the transfer balance cap, the unused portion will be indexed. The transfer balance cap does not apply to any subsequent growth or losses. Earnings from the assets supporting a TRIS are generally exempt from taxation. Lump-sum withdrawals can be made from a TRIS, and paid to you tax-free if you are aged 60 or over. Income payments from a TRIS are no longer subject to the '10% of the account balance each year' limit. However, income payments are subject to the minimum drawdown requirements (see the below table): Please note: The minimum drawndown requirements for retirement income streams, such as a TRIS, has been reduced by 50% for the 2019-20 and 2020-21 financial years. Important considerations By commencing a TRIS, you may be drawing down on your super earlier than expected. This may have long term consequences, such as reducing your balance earlier than anticipated in retirement. Depending on your financial situation, goals and objectives, a TRIS may or may not be appropriate for you. Therefore, it's important to consider seeking professional advice prior to commencing a TRIS. Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. Source: Transition to retirement income streams (TRIS). (2020). Retrieved from https://ewar.financialknowledgecentre.com.au/kcarticles.php?id=2856. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd. *Australian Government, Australian Bureau of Statistics. (2020). 6238.0 - Retirement and Retirement Intentions, Australia, 2018-19.

Pssst; want to save some serious money? How long have you had your home loan? When was the last time that you checked the interest rate that you are being charged? Never thought about refinancing, here's why you should. A standard variable rate home loan is being charged 4.39% (comparison rate 4.49%). With a 3-year fixed rate loan available at 2.19% (comparison rate 3.15%) with full offset, how much could making the switch save you? Existing loan: Using a new loan: You save $109,848.96 OR keep the payments the same and you save 7 years and 1 month of repayments.Of course, there may be some costs in refinancing, but many lenders offer a rebate to cover these. Other things to consider: Are you eligible for the 2.19% offer? Will the rate difference remain the same over the life of the loan? Are you looking to sell and buy a new property in the future? Invest some time with a professional mortgage specialist who will work through these questions and others to check if your existing loan is suitable and is best for you. They will also advise you on the best refinance options if a change is in your interests. For full details, call David Seymour Regional Financial Solutions 0418 785 747. The above is general in nature and does not take into account your personal circumstances and position. Authorised Credit Representative 47331. Australian Credit Licence 484980. This is for general use and is indicative only depending on your personal circumstances.

We work to live, we don’t live to work Peter helps transform businesses with astute commercial advice innovation and growth initiatives that help them to thrive. Business constantly evolves and it can be challenging to keep up to date with every change, but Peter sees this as a positive. He loves helping people — personally and financially — to create the life they want and take control. That looks different to everyone so his motto is “Business by design, not by default”. The multi-award-winning accountant and advisor also helps fast-track business success and personally mentors business owners and Boards. Peter is a champion of work/life balance making sure that each client remembers this in their businesses. He is a great believer in working hard, working smart and keeping things in perspective. Peter encourages his clients to take their lifestyle as seriously as they take their business. Peter has been recognised as one of Australia’s business leaders. He also spearheads numerous activities that support local and global charitable causes. “I enjoy the diversity of industry and my interaction with each client,” says Peter. “My approach is to see the greater business picture and then devise long-term strategies to achieve goals.” “Whilst my perspective does not always follow a traditional path, I do consider issues from all angles in order to develop the best solutions.” Peter Fowler MBA CPA B Accounting SSA JP SA Fin Peter Fowler is a highly accomplished professional with a diverse skill set that spans the realms of finance, accounting, and business management. Holding a Master of Business Administration (MBA) and designation as a Certified Public Accountant (CPA), Peter brings a wealth of expertise to the table. Peter is also a Justice of the Peace (JP) and holds designations of SSA and SA Fin. These additional credentials underscore his commitment to upholding the highest standards of professionalism and ethical conduct. Peruse Collins Hume’s Welcome Booklet here »