The $2.5bn JobTrainer Package.

The $2.5bn JobTrainer Package.

This month the Government announced the $2.5bn JobTrainer package to retrain, upskill and open new job opportunities.

JobTrainer for job seekers and school leavers

An additional 340,700 training places will be created to provide no or low cost courses into sectors with job opportunities. The Government is working with the States and Territories to develop a list of qualifications and skill sets to be covered by the program.

JobTrainer for employers

The JobTrainer package has expanded the number of businesses that can access the 50% apprentice wage subsidy and extends the subsidy until 31 March 2021 (from 30 September 2020).

Originally, only businesses with less than 20 employees or larger employers employing apprentices/trainees let go by a small business were able to access the subsidy (for wages paid to apprentices employed by them as at 1 March 2020).

Now, businesses with under 200 employees can access the subsidy for apprentices employed from 1 July 2020. Employers will be reimbursed 50% of an eligible apprentice’s wage up to a maximum of $7,000 per quarter per apprentice.

Employers will be able to access the subsidy after an assessment by the Australian Apprenticeship Support Network.

Eligibility

Small business – claims open now
· Employ fewer than 20 people, or
· A small business with fewer than 20 people, using a Group Training Organisation, and
· the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020 for claims after this date. Claims prior to 1 July 2020, will continue to be based on the 1 March 2020 eligibility date.

Medium Business – claims open on 1 October 2020
· Employ 199 people or fewer, or
· A medium sized business with 199 people or fewer, using a Group Training Organisation, and
· the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020.

You will need to provide evidence of wages paid to the apprentice. If the business subsequently is unable to retain the apprentice, another business can access the incentive if they then employ and pay wages to the apprentice.

Final claims for payment must be lodged by 30 June 2021.

How does the apprenticeship subsidy and JobKeeper work together?

They don’t. It is one or the other.

An employer will not be eligible to claim the apprentice wage subsidy for any period where they choose to claim the JobKeeper payment for the same apprentice.

An employer or Group Training Organisation will not be eligible for the JobKeeper payment where the employer is in receipt of an Australian Government wage subsidy for the same Australian Apprentice (for example Supporting Apprentices and Trainees and the Australian Apprentice Wage Subsidy).

Finally, if you need assistance regarding any of the Governments stimulus packages please get in touch with our team by phone 02 9415 1511 or email reception@primeadvisory.com.au.

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Are you eligible for the $25,000 HomeBuilder grant?

Are you eligible for the $25,000 HomeBuilder grant?

The Government has announced grants of $25,000 to encourage people to build a new home or substantially renovate their existing home.

The HomeBuilder scheme targets the residential construction market by providing tax-free grants of $25,000 to eligible owner-occupiers, including first home buyers, to build a new home or substantially renovate their existing home.

The grants will be distributed by the revenue office of the State or Territory where you live or plan to live.

There are a few complexities to this grant that both home builders/renovators and the building industry need to be across before jumping in and signing a new contract on the expectation that the grant will apply.

Eligibility
Eligibility criteria apply to the individuals applying for the grant and the building project:

Individual eligibility
The HomeBuilder scheme is available to owner occupiers including first home buyers. It is not accessible to owner builders, developers or investors.

To be eligible you need to be:

  • An individual (not a company or trust); and
  • 18 years of age or older; and
  • An Australian citizen.

And, you need to meet the income test. To be eligible, you cannot earn more than:

  • Individuals – $125,000 based on your 2018-19 or later tax return
  • Couples – $200,000 based on both of your 2018-19 or later tax returns

The building project eligibility
The building contract must be signed between 4 June 2020 and 31 December 2020. And, the construction or renovation must commence within three months of the contract date.

The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

New home* The property value (house and land) does not exceed $750,000
Renovation** Substantially renovate your existing home, where:

·  The renovation contract is between $150,000 and $750,000, and

·  The value of your existing property (house and land) does not exceed $1.5 million

* house, apartment, house and land package, off-the-plan, etc.** renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

  • Own a property (house and land), and knock down the house to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;
  • Own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or
  • Buy the land after 4 June 2020, and then build, the total value of the land and build cannot exceed $750,000.

Integrity measures and pricing
Building contracts must be at arms-length, that is, the parties cannot be related or connected. Renovations or building work must be undertaken by a registered or licenced building service ‘contractor’ (depending on the state or territory you live in) and named as a builder on the building licence or permit.

When it comes to price, the terms should be commercially reasonable, and the contract price should not be inflated compared to the fair market price. The rules enable the purchaser to request that the builder demonstrate that the contract price for the new build or substantial renovation is no more than a comparable product (measured by quality, location and size) as at 1 July 2019.

Interaction with first home owner grant schemes
The HomeBuilder grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

Problem areas
As the building contract is entered into before the grant is approved, it will be important that the grant is not essential to finance the building project, just in case the grant is not approved.

In addition, as the builder needs to commence work within three months of the contract date, it will be important to ensure that the contract recognises the commencement dates.

As always, we are here to help so please reach out if you have any questions 02 9415 1511 or email reception@primeadvisory.com.au.

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Instant asset write-off scheme extended.

Instant asset write-off scheme extended.

Until December 31 businesses will be able to claim accelerated depreciation on new assets under the latest extension to the $150,000 instant asset write-off program.

After expanding the program from assets worth $30,000 to $150,000 in response to the COVID-19 pandemic in March, the federal government has now extended the deadline for making claims from July 1 to December 31.

Treasurer Josh Frydenberg said the extension is expected to cost taxpayers $300 million over the next four years. However, uptake of the scheme is uncertain because it is demand-driven and requires firms to first buy assets out of their own pockets. “We’ve seen strong take up of this program in the past,” Frydenberg told Sunrise on Tuesday 9th June when the extension was announced.

The instant asset write-off scheme allows businesses to immediately deduct the value of an asset in the year of purchase, instead of claiming deductions over several years. Businesses can claim multiple assets.

The program was initially launched in 2015 and has been reinforced half a dozen times since with the size of the write-off currently more than six times higher than the original $20,000. While the write-off has been a pillar of the federal government’s small business policy in recent years, there have been longstanding questions about its usage across the sector.

Several surveys suggest most firms don’t have the capital to make use of the program, while tax office figures in 2016-17 revealed fewer than 350,00 businesses claimed something, despite predictions millions of firms would benefit. The average amount claimed over that time was just $11,000 of the then $20,000-cap, according to the ATO.

To date the Treasurer has provided no further figures about usage of the write-off scheme since the coronavirus extension was put in place in March, although this data is likely to come through with tax returns due to be filed over the coming months.

As always, we are here to help so please reach out if you have any questions 02 9415 1511 or email reception@primeadvisory.com.au.

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Mortgage advice from our new referral partner.

Mortgage advice from our new referral partner.

Over the years at PrimeAdvisory we have tried different structures to deliver a mortgage solution to all clients.  We have employed mortgage brokers, we have referred directly to banks and referred to third-party mortgage businesses.  After a successful trial period we are now introducing Loan Market Lower North Shore (LMLNS) as our preferred referral partner for all your mortgage needs.   

Loan Market is part of the White Family Group (who also own Ray White) and has been family owned for the past 23 years.  LMLNS is headed by Matt Clayton and his team.  Matt has been involved in the industry since 1999 and he and has team have the expertise to guide you through these interesting times and beyond.  Here is an article from them highlighting a few of the options available in the current climate.   If you do require help please don’t hesitate to call Matt on 0414 877 333. 

  

We are here to help answer all your mortgage needs.  

What’s a payment deferral?
This is also known as a mortgage holiday but don’t let the name fool you, this is no holiday. If you’ve been stood down, lost your job and cannot afford to pay mortgage repayments, you have the ability to enact a payment deferral. This is when a lender defers your repayments for a period of time. 

Every lender has their own rules and requirements on these payment deferrals. It’s important to know that at some point you will be required to pay the interest that accrued while the loan was deferred. For example, some lenders will add the amount you owe to the end of your loan and some will charge immediately after the payment deferral is off hold.  

Also, after the deferral, your balance and your repayments could be higher to make up for the interest accrued deferred repayments. 

What happens to the principal if repayments are frozen?
When a payment deferral on an existing mortgage is activated, it means that a lender will defer your required mortgage repayments for a specific period of time. Although your repayments are deferred, the interest on your loan is still calculated and added to the balance. In effect you’re paying interest on interest. 

So, when you recommence repayments your lender will recalculate your repayments so you repay the loan in the original term. This ultimately means your repayments will rise. However, there are options available to refinance after the payment deferral period, which could help to reduce repayments and increase the term of your loan, giving you a bit more flexibility.  

How do I get hardship assistance? 
First things first, while it’s important to understand what your options are in these difficult times, I urge you not to panic and spend hours on hold to your lender. Let’s look into your options first, I can help you navigate and understand what your options are during this time of financial hardship that many Australians are facing.  

Why refinance?* Is it complicated?  
There are many factors that you need to consider when looking to refinance. A few reasons you might want to refinance are:  

  • Take advantage of the recent RBA cut
    Now might be the right time to see if we can find a more competitive rate that is suited to your current needs. A lower interest rate could result in lower interest costs and might just save you a heap of savings over the life of your loan. 
  • After some new loan features?
    There could be a bundle of features that could give you more power over your finances when you refinance your mortgage. It might be the new rates that could save you money or the option to repay your loan faster without having to pay penalty charges. Some loans won’t charge you a monthly account fee or a fee for withdrawing money when you need it. 
  • Keen to tap into your home equity?*
    If you need some extra funds but don’t want to dip into your emergency funds or savings account you could tap into your home equity instead. Now, the line of credit your equity can get you depends on two things – The amount you’ve repaid on your mortgage and the value of your home. The benefits? You might be able to save on costs compared to other types of loans, start your home renovation or use the extra funds to help with your current circumstances. 

Is now a good time to fix my rate?*
There is no easy answer to this question, as it depends on your situation and your financial goals. Let’s take a look at the pros and cons of fixing your rate:  

  • Pros: Fixed rates prevent the risk of your repayments increasing due to a rise in interest rates and your repayments will stay the same for a set period. 
  • Cons: Fixed rates are usually higher than variable rates, but now as rates are continuing to decrease, there could be associated fees and costs for breaking your fixed rate if you chose to refinance.  

Refinance vs payment deferral?
A common question I get asked is whether to refinance or if a payment deferral is the way to go. There are a few different options which all depend on your current situation and financial needs. I can help answer any questions you may have around this to see what the right option is for you.  

What are the options as a landlord?
Your tenants may be going through some financial hardship at the moment and may not be able to afford paying their rent, I can help:  

  • Negotiate payment deferral options for your mortgage  
  • Discuss hardship options  
  • Refinance or reprice to get a more competitive rate 
  • Outline the costs of switching and not switching  

What are the options if I’m a small business owner?  

The JobKeeper Payment, has been set up by the Australian Government to provide a temporary wage subsidy available to eligible employers. This subsidy relates to current employees who were employed by the employer on 1 March 2020.  

It will allow businesses impacted by COVID-19 to access a fortnightly wage subsidy of $1,500 for a maximum of 6 months. Generally, to qualify businesses will need to demonstrate a drop in revenue by at least 30 percent. 

Want to chat about your options? Let’s talk and I’ll see how I can help.   

Please contact Matt Clayton on +61 414 877 333 or visit their website here. 

*Disclaimer: Any refinancing/access to home equity is subject to lender imposed terms and conditions including but not limited to loan serviceability, valuations and confirmed capacity to service both any existing and revised lending arrangements. **This document has been created by Loan Market Pty Ltd (ABN 89 105 230 019, Australian Credit Licence no. 390222). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter.You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs. Information included has been sourced from third parties and has not been independently verified. Accordingly, Loan Market Pty Ltd is not in any way responsible for nor provides any warranty express or implied as to its accuracy or relevance. 

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Personal finances post COVID-19.

Personal finances post COVID-19.

We are going to come out of this COVID era with a new set of rules.  We have been forced into these rules by isolation, some we have put off for years and some we never thought we would need to learn.  Many of these practices have just had the COVID torch shone on them and they are scurrying.  Here are the changes we think are here to stay. 

Online Banking 

Take for example all those who have resisted online banking for a variety of reasons and or fears.  Granted this has generally been the older population but not solely. Over the years they have continued to stand in queues at banks, use cheque books and send cash in envelopes for birthdays.  During isolation we have been forced to sign up to online banking to enable payments, transfers and shopping and now many of us are reveling in paying bills, shopping with Amazon and transferring money online.  Learn to love your bank online, branches will become a thing of the past. 

Cash is no longer king. 

Well, having access to cash is still definitely king but using it to purchase items has changed.  Going to the ATM or the bank and filling up your wallet for the week, with that folding stuff, is practice that we have been urged to abolish.  Shopping online from home and retailers forcing us to tap and go has changed the way it the way we pay.  If for whatever reason you do need to get cash it will be different.  

There was a time not too long ago when we were impressed by touch screens and all they enabled us to do. COVID has made most of us hyper-aware of every touchable surface that could transmit the disease, so in a post-COVID world, it is expected that we’ll have fewer touch screens and more voice interfaces and eventually machine vision interfaces.  Get ready to be recognized by your friendly ATM and having conversations with inanimate objects. 

Mojo (emergency) bucket to become the norm. 

With the increase in online shopping and the disappearance of cash as a limiter on what we spend, knowing and sticking to a budget becomes vital.  The “spend whatever you earn and then just use your credit card philosophy” is a definite practice of the past.  This is a practice that has thousands of families in dire straits today.  Those who have been living from pay cheque to pay cheque are vowing to themselves never again. As in most times of financial hardship the Australian household savings rate increases, and I am guessing it will be the same again this time around.  But how best to do this?     

For those who have not read Scott Pape’s book the Barefoot Investor and his 9 steps to financial freedom, here is a look at his bucket philosophy.  Divide your monthly income into 3 buckets:  

  • Blow bucket – for daily expenses, your budgeted items and the occasional splurge. 
  • Mojo bucket – to provide emergency funds of at least 3 months living expenses. 
  • Grow bucket – to build long term wealth and total security. 

The Mojo (emergency) bucket is what we all need to build to ensure financial stability in the years ahead.  Set the bucket philosophy in place now and be ready for anything that this world can throw at you. If you do want to take it further and follow all of Scott’s steps, then check them out here. 

https://barefootinvestor.com/barefoot-steps/ 

This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions. 

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