A UK research report has found a growing number of couples over 60 live in separate households, a trend particularly pronounced among those entering a new relationship at this stage of their lives. Improved mental health is a bonus.
Speakers of the calibre of David Knoff, the expedition leader stranded with his team in Antarctic during COVID, can regularly be heard at this global institution that places a premium on knowledge, not qualifications.
No news is good news on budget night
Rhetoric aside, the Labor Government delivered what a federal budget should be; an uneventful announcement of key government spending and operations for the year ahead.
Coverage in recent years had turned the budget into an event through which every member of the population expected something for them, when in fact it is simply an accountability review of both spending and revenue raising.
The job of our politicians is to govern throughout the year, not solely through the delivery of an annual, or semi-annual, budget, hence the lack of any significant change in this week’s announcement should be welcomed.
While generally uneventful, there are a number of changes relevant to investors, retirees and superannuants that are worth highlighting. The most impactful of which was the fact that the stage three tax cuts would continue as announced.
Off-market share buy backs
These have been among the most powerful sources of returns for many superannuation funds, both industry and SMSFs, by virtue of the unique tax structure. Off-market buybacks allowed companies like BHP to buy back shares from shareholders at a much lower price than their market value and make up the difference with a large, fully franked dividend, which for many retirees was fully refundable. As of budget night, the tax treatment of off-market buy backs will mirror on-market ones, meaning they are likely to have come to an end.
Supporting downsizing
The government is clearly seeking to grease the wheels of the property market by stimulating supply. With average house prices having increased significantly over the last decade a large portion of wealth is held in residential property, but there remains very little incentive to sell one’s home. Announcements in the budget will allow downsizer contributions for those as young as 55, extended from age 60, while extending the exemption on house sale proceeds from the age pension assets test for an additional 12 months.
Healthcare cards
With the cost of living impacting those in retirement and lower income cohorts more than most, the government has announced an increase in the income threshold for the Commonwealth Seniors Health Card. This takes the maximum income for eligibility to $90,000 for singles and $144,000 for couples. Further, the co-payment on Pharmaceutical Benefits Scheme payments will drop from $42.50 to $30.
Self-managed super funds
The government has decided to defer the start date for changes to residency rules for SMSF trustees. Announced in 2021 and set to come into force from 2022, the legislation that would extend the central control and management test from two to five years has yet to pass. The rules will now be changed when the legislation is finally passed.
