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It’s a common question asked by employees: “what should I do about my super?” If you are an employer or manager and feel confident of your knowledge of superannuation and investment, it can be tempting to give an answer. However, just about anything helpful you have to say will likely fall within the definition of giving financial product advice, and that could land you in very hot water. The boundaries Financial product advice is a recommendation or statement of opinion that: is intended to influence a person or persons in making a decision in relation to a financial product or class of products; or could reasonably be regarded as being intended to have such an influence. The Corporations Act casts a wide net. Financial product advice can include anything you say about: joining, or making contributions to, a superannuation fund; making additional contributions to a super fund, including by salary sacrifice; rolling accumulated superannuation into or out of a fund; and selecting particular investment or insurance options within a superannuation fund. The ability to provide advice is generally restricted to holders of an Australian Financial Services Licence or their representatives. Very few employers, or their staff, fall into this category, and giving financial product advice, even inadvertently, could lead to prosecution. What can you talk about? You can provide factual information that does not include a recommendation, an opinion, or an intention to influence a person’s decision regarding their super. This allows you to provide information about: employees’ rights and employer obligations; how your employees can tell you what superannuation fund or retirement savings account (RSA) they want their superannuation guarantee contributions paid into; or the employer fund into which you will pay superannuation guarantee contributions if the employee doesn’t nominate a superannuation fund or RSA. You can also give your employees the Product Disclosure Statement (PDS) of your default superannuation fund. Just don’t provide any explanation of the material it contains or attempt to recommend the default fund. How can you help? None of this precludes you from helping your employees. You just need to go about it the right way. For example, you can refer employees to a licensed or authorised adviser. Just be sure to disclose any benefit you may gain from making such a referral. Or you can ask a superannuation fund provider to make a presentation to your employees. Take care, though, that you don’t give the impression of either endorsing or disapproving of the fund in question. Being asked for advice is recognition that your employees respect your views and knowledge. It can be flattering and you may well know a great deal about superannuation and investment. However, without the necessary authorisation, you need to steer well clear of financial product advice. And it’s not just you who needs to be aware of these restrictions. You need to ensure that your HR staff and line managers are also aware.   What can you tell your employees about Super 14/11/2018 This is general information only

With Australia’s age pension being subject to an assets and income test, a simple way for part-pensioners to increase their pension payments is to give away some assets. Not surprisingly the government is on to such an obvious strategy. It’s called gifting, and while it is perfectly legal for you to give away whatever you want whenever you want, if you exceed the relevant limits, Centrelink will continue to assess, what it calls “deprived assets”, for five years. The limits Gifting is defined as giving away assets or transferring them for less than their market value. Limits are the same for both singles and couples. If you give away less than $10,000 within a single financial year and no more than $30,000 over five consecutive financial years, Centrelink will disregard these gifts. Any gifts in excess of the allowable amount will be assessed as an asset (and, where applicable, subject to the income test) for a period of five years from when the gift was made. Planning ahead These rules don’t just apply to existing pensioners. They also concern anyone who is applying for the age pension, as recent retiree Frank discovered. Frank has reached age pension age and based on his current assets and income he should be eligible for a part pension. However: Four years ago he gave his daughter one of his cars, valued at $25,000. At the same time he gave his son $25,000 in cash, to match the value of the car. Two years ago Frank sold a beach house on the open market for $210,000. This was $40,000 less than the initial valuation from the estate agent. In the past year he spent $35,000 on home renovations and $15,000 on an overseas trip. What does this mean for his pension assessment? The money spent on renovations and holidays count as normal living expenses, not a gift. Likewise, with $210,000 being the best offer Frank received for his holiday home after it had been on the market for a couple of months, the property would not be considered to have been disposed of for less than its market value. Whilst he understands that the money he gave to his son is clearly a gift, Frank’s biggest surprise is the treatment of the car. Four years after he gave it to his daughter it’s about to be treated by Centrelink as an asset Frank still owns. That means Frank gave away $50,000 in one year. The annual ‘Gifting Free Area’ is $10,000, so the difference, $40,000, will be counted as an asset for the next year. This will reduce his pension by more than $100 per fortnight. If Frank had thought about his pension five years before he was eligible to apply for it, he could have achieved a better outcome. Seek advice To gift or not to gift? It’s an intricate question. The right answer depends very much on personal circumstances, so talk to your financial planner. He or she can help you work through all the issues, including the complex calculations of the impact of multiple gifts over several years.   To gift or not to gift 31/10/2018 This is general information only

When developing a budget, it’s easy to think that you have no control over costs for essential items such as electricity, particularly when every bill seems to be higher than the last. But if you look closely at your energy usage at home and make a few small changes to reduce your consumption, you will be able to use that extra cash in more enjoyable ways than paying it to an electricity provider. In addition, you are making a valuable contribution to the environment. The following five tips can help put more money in your pocket. Install efficient appliances. Compact fluorescent light bulbs use 80% less energy and can last up to eight times longer than conventional bulbs. Similarly, installing a water-saving showerhead can cut water usage by up to 50% and save on water heating costs. Control the temperature. Set the air-conditioner thermostat at an appropriate level that is optimum for comfort and efficiency. 25°C is the recommended temperature. Wearing appropriate clothing for the climate and installing insulation can reduce the need for additional heating or cooling. Go natural. Using the sun and fresh air to dry your laundry is a free alternative to the clothes dryer. Consult the stars. When purchasing new appliances, check the star or energy rating. The more stars, the greater the energy efficiency, and the more you can save. Turn it off. Turn off appliances if you are no longer using them; even turning off the standby function on electronic equipment will save dollars. A very simple habit is to switch off the light every time you leave a room. There are many more ideas– just look around your home to discover ways you can switch and save. Don’t forget to involve your kids. It will help them to learn about saving money at the same time. And finally, with so many energy companies vying for your business, shop around for the best deal for you. Visit the Australian Government’s website www.energymadeeasy.gov.au/ to compare energy offers.   Energy made easy 17/10/2018 This is general information only