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Catherine's Chat

Wholistic Financial Solutions provides information and updates regarding the property investment industry. Learn more from Catherine's chat here.

ATO took man's life superannuation savings as penalty for overpayment

Tuesday, July 17, 2018

ATO takes an average Australians retirement savings in a foul penalty.  Unconscionable conduct on behalf of the ATO and the Court system won't help.

AMP Federal budget 2016

Friday, May 06, 2016

 2016-17 Federal Budget- Client Briefing     


4th May 2016                                                                    


Federal Treasurer Scott Morrison put forward a number of proposed changes, mainly around contributions to superannuation and taxation, in his budget speech last night. Here’s a brief roundup of what the proposals could mean for you—whether you’re starting out in your career, taking care of family, on the cusp of retirement or enjoying life after work. Remember, proposals are not set in stone and could change as legislation passes through parliament.




1. Lifetime cap for non-concessional superannuation contributions

Proposed effective date: 7.30pm (AEST) 3 May 2016


Currently, the non-concessional contributions cap is $180,000 per person, per financial year. If you are under age 65 at any time in the financial year, you can make a non-concessional contribution of up to $540,000 under the bring-forward provisions. The government proposes to replace the current contributions cap with a $500,000-lifetime non-concessional contributions cap. This lifetime cap is proposed to commence at 7.30pm (AEST) on 3 May 2016. The cap will be indexed to average weekly ordinary time earnings (AWOTE). The lifetime cap will take into account all non-concessional contributions made on or after 1 July 2007. Contributions made between 1 July 2007 and 3 May 2016 will be counted towards this lifetime cap. However, contributions made before the commencement of this measure, that is 7.30pm (AEST) on 3 May 2016, will not result in an excess. Excess contributions made after commencement will need to be removed or be subject to penalty tax.


2. Reduction of the concessional contributions cap

Proposed effective date: 1 July 2017


Currently, the standard concessional contribution (CC) cap is $30,000 per financial year. A higher temporary concessional contributions cap of $35,000 (unindexed) applies if you are aged 49 years or over on 30 June of the previous financial year. The government is proposing to reduce the annual cap on concessional superannuation contributions to $25,000 for everyone, irrespective of their age.


3. Reduction to Division 293 tax threshold

Proposed effective date: 1 July 2017


From 1 July 2017, the government has proposed to lower the Division 293 threshold (the point at which high-income earners pay an additional 15 per cent tax on contributions) from $300,000 to $250,000.


4. Allowing catch up concessional contributions

Proposed effective date: 1 July 2017


Currently, the concessional contributions cap is applied on a ‘use it or lose it’ basis. That is, the unused amount of the concessional cap cannot be carried forward. From 1 July 2017, the government will allow eligible individuals to make additional concessional contributions where they have not reached their concessional contributions cap in previous years. This option will only be available to those individuals with a superannuation balance less than $500,000. It is proposed that the unused amounts will be carried forward on a rolling basis for a period of five consecutive years with only unused amounts that accrue after 1 July 2017 being eligible. The proposed measure will also apply to members of defined benefit schemes.


5. Removal of the work test to contribute to superannuation

Proposed effective date: 1 July 2017


Currently, individuals aged 65 to 75 who want to make voluntary superannuation contributions need to meet the work test. People aged 70 or over are also currently unable to receive contributions from their spouses. The government will remove these restrictions for all individuals aged less than 75, from 1 July 2017.


6. Making it easier to claim tax deductions for personal super contributions

Proposed effective date: 1 July 2017


Currently, if you are engaged in employment activities during a financial year, a deduction for personal superannuation contributions can only be claimed where the ‘less than 10% rule’ is satisfied. This rule broadly requires that the income attributable to employment activities does not exceed 10% of income from all sources. 2016–17 Federal Budget – client briefing 4 May 2016 The government is proposing to abolish this test, allowing all individuals up to age 75 to claim an income tax deduction for personal superannuation contributions. If legislated, this will effectively allow all individuals, regardless of their employment circumstances, to make concessional superannuation contributions up to the concessional cap. Observations: –– This measure assists those whose employer may not provide the ability to make salary sacrifice contributions to super. It will also assist those who are partially self-employed and partially wage and salary earners.


7. Introducing the Low-Income Super Tax Offset (LISTO)

Proposed effective date: 1 July 2017


From 1 July 2012, individuals with an income of up to $37,000 automatically received a government contribution of up to $500 paid directly into their super. However, this Low Income Superannuation Contribution (LISC) will not be available in respect of concessional contributions made after 1 July 2017. From 1 July 2017, the government is proposing to introduce a replacement – the Low Income Superannuation Tax Offset (LISTO). The LISTO will provide a non-refundable tax offset to superannuation funds, based on the tax paid on concessional contributions made on behalf of low-income earners, up to an annual cap of $500. The LISTO will apply to members with adjusted taxable income up to $37,000 who have had a concessional contribution made on their behalf.


8. Making spouse contributions more attractive

Proposed effective date: 1 July 2017


Currently, if you make contributions into your spouse’s account you are entitled to a tax offset of up to $540 if certain requirements are met. One of the requirements to qualify for the maximum offset is that the receiving spouse’s assessable income, reportable employer superannuation contributions, and reportable fringe benefits in the financial year must be less than $10,800. To be eligible to receive the contribution, the receiving spouse must currently be: –– under age 65, or –– aged between 65 and 70 and has met the work test for the financial year in which the contribution is made. The government proposes to: –– remove the work test restrictions for all individuals aged up to 75, and –– increase access to the spouse superannuation tax offset by raising the lower income threshold for the receiving spouse to $37,000 (cutting out at $40,000).


9. Changes to the taxation of Transition to Retirement (TTR) income streams

Proposed effective date: 1 July 2017


The internal earnings within a superannuation account on the amount used to purchase a pension are currently tax-free. This will no longer apply to transition to retirement income streams from 1 July 2017 should the proposal go ahead. This means that earnings on fund assets supporting a transition to retirement income stream after this date would be subject to the same maximum 15 per cent tax rate applicable to an accumulation fund.


10. The introduction of a $1.6 million superannuation transfer balance cap

Proposed effective date: 1 July 2017


From 1 July 2017, the government is proposing to introduce a $1.6 million transfer balance cap. This cap will limit the total amount of accumulated superannuation benefits that an individual will be able to transfer into the retirement income phase. Subsequent earnings on pension balances will not form part of this cap. If you have superannuation amounts in excess of $1.6 million, you will be able to maintain this excess amount in a superannuation accumulation account (where earnings will be taxed at the concessional rate of 15 per cent). A tax on amounts that are transferred in excess of the $1.6 million cap (including earnings on these excess transferred amounts) will be applied, similar to the tax treatment that currently applies to excess non-concessional contributions. Fund members who are already in the retirement income phase with balances above $1.6 million will be required to reduce their retirement balance to $1.6 million by 1 July 2017 should the proposal go ahead. These excess balance amounts may be converted to a superannuation accumulation account.


Taxation – general


11. Changes to marginal tax rates

As speculated, a tax cut has been proposed at the current $80,000 taxable income threshold. As a result, marginal tax rates for resident taxpayers are proposed to change as follows:

                 2015–16                                                               2016–17

Income ($)              Marginal tax rate (%)                        Income ($)           Marginal tax rate(%)


 0-18,200                                           0                           0-18,200                                      0

18,201-37,000                                  19                           18,201-37,000                             19

37,001-80,000                                32.5                          37,001-87,000                           32.5       

80,001-180,000                                37                           87,001-180,000                            37

>180,000                                         47                           >180,000                                    47


Notes: Medicare levy may also apply, 47% tax rate includes Temporary Budget Repair Levy (TBRL, additional 2%). The TBRL is due to expire from 30 June 2017 and has not been extended in this budget. 


–– The Low Income Tax Offset (LITO) remains unchanged which gives resident taxpayers an effective tax-free threshold of $20,542 in 2016–17.

–– Indicative tax cuts: If you earn $87,000 or more per year, you would get a maximum tax cut of $315 under this measure. If you earned less than $80,000 there will be no change to your tax      calculation.


Taxation – small business


12. Increase in small business entity turnover thresholds

Proposed effective date: 1 July 2016


Starting from 1 July 2016, the government proposes to increase the small business annual aggregated turnover threshold from $2 million to $10 million for certain small business concessions. From 1 July 2016 these small business concessions include:

–– the lowering of the small business corporate tax rate (see below)

–– for all businesses with annual aggregated turnover of less than $10 million simplified asset depreciation rules, including immediate tax deductibility for asset purchases costing less than $20,000 until 30 June 2017, and

–– other tax concessions such as the extension of the FBT exemption for work-related portable electronic devices and the immediate deduction of professional expenses.


–– The current $2 million turnover threshold, or alternative $6 million net asset value test, will be retained for access to the small business Capital Gains Tax concessions.


13. Lowering the company tax rate to 25 per cent

Proposed effective date: 1 July 2016


The government proposes to reduce the company tax rate to 25 per cent by 2026–27. Initially, the tax rate for companies with an annual aggregated turnover of less than $10 million will be reduced to 27.5 per cent from 1 July 2016.


14. Unincorporated small business tax discount

Proposed effective date: 1 July 2016


For small businesses, that are not companies, the government proposes to extend the unincorporated small business tax discount. From 2016–17, the discount will be available to business with aggregated annual turnover of less than $5 million, up from the current threshold of $2 million. The discount on tax payable on business income will be increased to 8 per cent, up from the current 5 per cent, but the maximum discount available will remain at $1,000 per annum. Over the next decade it is proposed to further expand the discount in phases to a final discount of 16 per cent, with the existing $1,000 maximum discount per individual for each income year to remain.


Families and social security


15. Deferral of reforms to childcare payments

Proposed effective date: 1 July 2018


As part of the May 2015 Federal Budget it was proposed that a new single Child Care Subsidy (CCS) would replace the Child Care Benefit, the Child Care Rebate and the Jobs, Education and Training Child Care Fee Assistance from 1 July 2017. This measure has not yet been legislated and the proposed start date will now be deferred until 1 July 2018.






What you need to know

Any advice in this document is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters and consider the product disclosure statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.

A potential property hotspot

Tuesday, April 05, 2016

Ballina, NSW.


I spent Easter driving from Port Macquarie, through Coffs, Ballina, Bryon and Tweed Heads.


I was following the infrastructure trail.  They are duplicating the highway from Sydney to Brisbane.  I have 2 really good articles on the affect this may have on the areas along the way.  I won’t repeat it all but email me if you would like a copy or subscribe to our Free Property Coaching Services for these articles and many more.

I don’t always follow what I read in the property rags.  But I do pay attention when areas first start getting mentioned.  These are the first two articles on this topic.  From past experience – these areas will continue to be written about until its front page news and by then it will be too late.


I thought Port Macquarie was OK but expensive and not much going for it to drive extra growth.


Coffs was OK but also expensive.


Bryon and Tweed Heads have already escalated with Byron reporting gains of 33% in one year.  These areas have already moved out of reach for the average investor unless you want an apartment which I don’t recommend. Interesting that the highway duplication was completed just before this massive price rise in Byron. Coincidence? Maybe not.


But Ballina.  It has only grown by 11% in the last 12 months.  And a 3 year growth of only 4.3.  So this last 12 months growth is showing a turn around.   I believe in investing in areas with low past growth as this gives more potential for high upcoming growth. Or reverse if I see areas that have high growth like Byron of 33% - then it’s too late - don’t buy there.


More – the highway duplication from Byron to Ballina has only just begun.  It will be complete in about 12 months.  Could Ballina show the stella growth that Byron did once the highway is complete?  I don’t have a crystal ball but in my opinion, it very possibly could.  It could do so via the ‘ripple affect’ created by the growth in Byron, and all of the Gold Coast for that matter, and also from the ‘infrastructure affect’ of making the drive from Brisbane to Ballina much easier and quicker.


It also has a very low vacancy rate and is a popular retirement destination.


There is also very little in the way of new housing development – so am undersupply not an oversupply.


Finally – Ballina is showing clear signs of gentrification.  A lot of the streets are filled with old run down houses, and scattered in between these, are blocks where the old house has been pulled down and a brand new flash house has been built.


So it’s all positive signs as far as I could tell. 

Ripple Effect – Yes

Retiree Effect – Yes

Infrastructure Effect – Yes

Low Vacancy – Yes

Gentrification Effect – Yes

Undersupply - Yes


I am trying to buy there myself.

Brisbane Property Market

Wednesday, March 30, 2016

Whilst the Brisbane property market perhaps didn't meet the expectations bestowed upon it in 2015, with modest gains of around 5% on average, the greater Brisbane region threatens to surge in the years ahead.

"With affordability much less of an issue, comparatively high rental yields and improving economic conditions" there is a lot more growth to be found in Australia's 3rd largest city.

"Brisbane housing market fundamentals are arguably healthier than the larger capitals"

Tim Lawless - CoreLogic RP Data - March 2016

Property Clock is Ticking

Wednesday, March 02, 2016

Herron Todd White's Property clock noting Toowoomba, Canberra, Brisbane and Sunshine Coast as rising markets. good picks in my opinion too




Free GPS Economic Update Seminar 3rd March

Tuesday, February 16, 2016

On Thursday 3rd of March, Wholistic Financial Solutions will be hosting a FREE GPS Economic Update and CARE seminar at The Quality Inn , Dickson. Starting at 6.30pm this is sure to be a fun and informative evening with Special Guess speaker Rob McGregor and Emmanuel Calligeris. Visit our website or simple follow the link below. Look forward to seeing you there.

Stuart Westhoff on Pension Changes

Tuesday, February 16, 2016

Pension changes 1 January 2017 – editorial/newsletter article

Don’t get caught offside when the pension rules change

The commencement of 2017 will see some significant changes to means testing for Social Security pensions (including the Age Pension).

Uncertainty around income can be unsettling for those receiving a pension or considering retirement. That’s why it’s important to understand if and how you might be impacted by the new rules so that you can review your game plan before they change.

What’s changing?

The Government is making two changes to the assets test which will take effect from 1 January 2017.

Pensioners need to be aware of how the changes impact their entitlements. For some, the changes will create a cashflow shortfall and may have a significant impact on standard of living.

1. Increasing the lower assets test threshold

The lower assets test threshold refers to the level of assessable assets that can be owned before pension entitlements are affected. Pension payments are reduced once assets exceed this level.

Encouragingly, it is estimated this change will result in around 50,000 part pensioners qualifying for a full pension. Those already on a full pension will be unaffected by this change.

Thresholds differ, depending on your relationship and home-ownership status. Here’s how the new levels compare to the current ones:


Current lower asset threshold

Lower asset threshold from 1 Jan 2017

Single homeowner



Single non-homeowner



Couple homeowner



Couple non-homeowner



2. Increasing the assets test taper rate

The taper rate is the rate at which pension entitlements reduce where assessable assets exceed the lower threshold. The rate will be increased from $1.50 to $3 per fortnight for every $1,000 in assessable assets above the asset threshold.

As a result of this increase the pension the upper threshold is effectively lowered, meaning the pension cuts off at a lower level of assets. It is estimated that approximately 91,000 part pensioners will no longer qualify for the pension and a further 235,000 will have their part pension reduced.

Once again, the upper threshold will depend on an individual’s relationship status, home-ownership status and whether they are asset tested or income tested.


Current upper assets threshold

 Estimated upper assets threshold from 1 January 2017            

Single homeowner



Single non-homeowner



Couple homeowner



Couple non-homeowner



Pensioners who lose entitlements as a result of the changes will cease to be eligible for the Pensioner Concession Card (PCC). They will, however, automatically qualify for the Commonwealth Seniors Health Card (CSHC) or if less than pension age, the Health Care Card (HCC).

What about income tested pensioners?

While the changes are more directly relevant for assets tested pensioners, those who have their pension entitlement determined under the income test may not be unaffected. The changes could mean that certain pensioners become asset tested and this could lead to a loss of some or all of their entitlements.

What can be done?

Thankfully, there are a number of potential strategies that could be put in play to reduce the impact of the new rules.

Strategies which reduce an individual’s or couple’s assessable assets, like gifting or expenditure on the main residence, may potentially help. As every situation is different, it’s important that your game plan is both appropriate and sustainable for your circumstances.

Don’t get caught offside when the rules change, talk to your financial adviser about your game plan.

Stuart Westhoff from WFS comments

Tuesday, February 16, 2016

If you think “those” types of things only happen to other people, be warned.

In late 2007 the All Ordinaries index was over 6,500 points, my youngest daughter was only a few weeks and life could not have been better.

Two things were about to happen that had a devastating effect on my financial and personal life.

The first event some of you may have already guessed. The Global Financial Crisis hit. By mid-2008 the All Ordinaries had dropped 25% to about 5,000 points. There was more pain to come for the stockmarket but at that time the second event hit me. My wife was diagnosed with breast cancer.

Now in 2016 the stockmarket is hovering around 5,000 points again. It has recovered from its GFC low of around 3,300. My wife and I have not recovered. We are not together and I am still trying to re-build financially.

Financial stress places enormous strain on any relationship, be it personal or business.

Losses such as those experienced during the GFC are magnified by gearing, which is using borrowed funds. Financial losses from a traumatic illness add another layer of pain and when it happens during the GFC well…. as one client put it to me, “You’ve just gone through the perfect storm.”

These circumstances are not planned but do happen and it’s important to discuss the “what if’s” when putting any financial plans together. The things that can go wrong are not comfortable to talk about and that’s why it’s often easier to outsource these things to professionals who can talk through and plan for contingencies.

Please do not hesitate to review all your plans and contact us if you would like help.             

Happy Client Testimonial

Tuesday, February 16, 2016


Thank you for sending the additional information on property hot spots.  It was a very interesting read (as well as a good quality product) and I think very worthwhile.

I also want to thank you for your time – the Pathway to Wealth session was very useful from a practical sense but also, in terms of giving me a sense of control, confidence and certainty over my short and long term financial futures.

I would also like to commend Lara and Lynda for their professionalism and courtesy



Time to Switch Banks

Friday, February 05, 2016

Has your Bank?

* changed your investment property loan to principal and interest without giving you any choice?

* Worse, raised your interest rates just because they can?

* or declined an Investment property loan over 80%?

If so, your investment property strategy is no longer as tax effective as it should be and your cash flow is reduced.


We can also review your entire loan structure and re-finance you to a much cheaper bank.

This could save you 1000's in Interest and TAX per year.

The big banks think they can do this to you just because they can...

Just because they want more PROFIT at your expense.

Take action now.  Beat the banks at their own game.

Contact for your FREE mortgage review.

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