New tax, super and bank laws you need to know about

New tax, super and bank laws you need to know about

New tax policies implemented on July 1 are now in force, thanks to end of Financial Year changes instigated by the Coalition Government. These changes have an impact on tax payers across the country, so we’ve put together a summary of what affects you.

Here’s what made the cut.

1. Superannuation

The Government released its ‘Protecting your Super’ package on July 1. The rollout mainly benefits low-income earners and young people in Australia. Key changes are:

  • A 3% cap on investment and admin fees for super accounts of under $6,000.
  • A ban on exit fees.
  • Inactive accounts with less than $6,000 will now be transferred to the ATO.
  • Inactive accounts of any amount, with default life insurance, will be lost if they are not reactivated. To reactivate an inactive super account, make a contribution or contact your superannuation fund.
  • Ensure small business loan contracts are written in plain English.
  • Stop charging dead people fees.
  • Provide no-fee or low-fee accounts to low income customers.
  • Make switching banks easier for people.
  • And other rules, which result in tough penalties if breached.

If you have not contributed to your super in a while (as a result of maternity leave or working numerous jobs) you may be at risk of not being covered by insurances you once had. 

This means now is the time to check up on your super to ensure it is active.

2. Private health insurance

The Government has introduced gold, silver, bronze and basic tiers for all private health insurance providers, as part of a new minimum set of standards. We like this, because it means consumers can except a specific level of cover across the board.

It also means that it’s easier to compare the cost of health insurance, since each insurer must adhere to these new minimum requirements. Here’s an infographic by the Department of Health, which shows you what is covered under each tier.  

3. Tax payers

Improvements to reporting requirements mean some individuals will not get a payment directly from their employer during this financial year.  

According to the ATO: 

“This information, now referred to as an income statement, will continue to be pre-filled into people’s income tax return or provided to their registered agent.”

The ATO encourages people to wait a couple of weeks after 31 July 2019 before lodging their tax return, as this is the deadline employers have been given to finalise their employee income statements.

Assistant Commissioner Karen Foat said in a recent press release:

“If you use a tax agent to lodge your return, you don’t need to do anything. We provide your agent with this information and they can lodge your return as usual.”

For more detailed information on this new change, please head here.

4. Banks

New changes mean banks cannot hassle you to increase your credit card (unsolicited), push insurance with new personal loans and credit cards, or add commissions to Lender’s Mortgage Insurance. 

These changes come under the Banking Code of Practice, a new rule book the Big 4 Banks (and other institutions) have agreed to adhere to. The Code also means banks have to:

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As well as keeping you updated on the world of finance, we help people secure loans that match their financial goals and their lifestyle. If you’d like to speak with a mortgage broker near you, please get in touch. 

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.