13 August 2020

Recent developments

Welcome to the July technical roundup, which provides an update on reforms and announcements for the month of July. With no parliamentary sittings, this has been a quiet month, with limited legislative developments. However, the Government has made announcements regarding extending and introducing new stimulus measures as well as providing an Economic and Stimulus Update ahead of the Federal Budget, due to be handed down on 6 October 2020. 

Legislative Instruments

CPD relief

FASEA registered the Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020 on 14 July 2020.

This Instrument provides relief to advisers whose ability to complete CPD requirements by 30 June 2020 was impacted by COVID-19. Advisers have been granted an additional 3 months to meet the 40-hour CPD requirement as a one-off recognition of difficulties faced in 2020.  Advisers will be required to complete 40 hours of CPD in twelve months in future years and may not double count hours across the years.

Exposure Drafts

SMSFs (COVID-19 Rental income deferrals – In-house asset exclusion) determination

As a result of the financial impacts of COVID-19, and the need for some SMSF trustees and entities invested in assets subject to regulation 13.22B and 13.22C to provide rental relief in the form of deferrals to a related party tenant, the ATO published a draft legislative instrument and explanatory statement on 3 August.

Rental deferrals can amount to a loan under the super laws, and this may cause an SMSF to directly acquire an in-house asset. Ordinarily this would mean the fund would need to dispose of the in-house asset before the next financial year where it exceeds the 5% threshold.

The proposed legislative instrument will ensure that a deferral of rental income under a lease (on arm’s length terms) due to the impact of COVID-19 that amounts to a loan provided during the 2019-20 and 2020-21 financial years, does not result in an in-house asset or cause the SMSF to lose its in-house asset exemption to a related party covered by regulation 13.22B or regulation 13.22C of the Superannuation Industry (Supervision) Regulations.

The draft is available for public consultation until 31 August 2020.

Government announcements

Coronavirus SME Guarantee Scheme extended

On 20 July 2020 the Government announced the next phase of the Coronavirus SME Guarantee Scheme to support small and medium sized businesses. This second phase extends the scheme to loans written from 1 October 2020 until 30 June 2021, with targeted amendments. Key changes to the scheme include:

  • extending the purpose of loans able to be provided beyond working capital, such that a wider range of investment can be funded
  • permitting secured lending (excluding commercial or residential property)
  • increasing the maximum loan size from $250,000 to $1,000,000 per borrower
  • increasing the maximum loan term from 3 to 5 years; and 
  • allowing lenders discretion to offer a repayment holiday period.

Extensions to JobKeeper Payment, JobSeeker Payment, and the Coronavirus Supplement

On 21 July the Government announced proposed extensions of the JobKeeper Payment and certain JobSeeker Payment measures, including the Coronavirus Supplement. These measures are proposals at this stage and have not been legislated.

JobKeeper Payment is proposed to be extended from 28 September 2020 to 28 March 2021, with lower payments rates than the current rate of $1,500 per fortnight implemented over two phases:

 

Phase 1 (28 Sept 2020 – 3 Jan 2021)

Phase 2 (4 Jan – 28 March 2021)

Employed for 20 or more hours per week*

$1,200 pf

$1,000 pf

Other eligible employees

$750 pf

$650 pf

From 25 September to 31 December, the following modifications have also been proposed:

  • the extension of the Coronavirus supplement at a reduced rate of $250 per fortnight
  • continuation of the waiver of the Ordinary Waiting Period, Newly Arrived Residents Waiting Period and Seasonal Work Preclusion Period
  • continuation of the expanded access to Jobseeker Payment and Youth Allowance (other)
  • increase in the Personal income test – Income Free area to $300 per fortnight for JobSeeker Payment and Youth Allowance (other), with a single taper rate of 60 cents applying; and
  • increase in the Partner income test cut off to $3,086.11 per fortnight ($80,238.09 per annum) for individuals with no personal income.

Reinstatement of the Assets Test and Liquid Assets Waiting Period will occur as planned on 25 September 2020.

Economic & Fiscal Update - Early super access extended

On 23 July 2020, the Government released an Economic and Fiscal Update to address the effects of COVID-19 on the Australian economy and provide revised estimates for the budget position for 2019/20 and 2020/21.

As part of this update the Government announced a plan to extend the early release of superannuation scheme. Individuals who are financially impacted by COVID-19 may apply for the early release of up to $10,000 of superannuation, with the application period extended from 24 September 2020 to 31 December 2020.

The Government also reiterated other new stimulus measures recently announced including:

  • the JobTrainer Skills Package and establishment of the JobTrainer fund; and
  • extension of the Supporting Apprentices and Trainees wage subsidy for a further 6 months to 31 March 2021 and expanding it to medium-sized businesses from 1 July 2020.

Regulator views

ATO

Working from home tax deductions – temporary shortcut method extended

The ATO updated its Working from home during COVID-19 webpage on 23 July 2020.

A temporary shortcut method for individuals working from home had already been introduced to allow people to calculate tax deductible expenses with minimal record keeping requirements. Initially this method applied from 1 March 2020 to 30 June 2020, however the ATO has now extended the application of this method until 30 September 2020.

The ATO may extend this period, depending on when work patterns return to normal.

ASIC

Updated guidance on complaints handling

ASIC released Regulatory Guide 271 Internal dispute resolution (IDR) on 30 July 2020 after consultation with consumer and industry representatives. This guide updates requirements for how financial firms deal with consumer and small business complaints under IDR procedures and:

  • introduces reduced timeframes for responding to complaints, including superannuation complaints
  • sets out what information firms must include in written IDR responses to allow consumers to decide whether to escalate their complaint
  • sets new timeframe requirements for customer advocate reviews of appeals against IDR decisions
  • gives guidance about how firms can deal with representatives who are not acting in consumers’ best interests.

ASIC will also publish a legislative instrument alongside RG 271 to clarify enforceable IDR standards and requirements, and the industry has until 5 October 2021 to comply with the new IDR standards and requirements.

Other

FASEA

The June exams were held exclusively online from 11 to 16 June. 2,282 advisers sat the exam with 84% of candidates passing the exam.

In comparison, the April exams held from 2 to 7 April saw 470 advisers sitting the exam, with 79% of candidates passing the exam.

The remaining exam sitting dates for 2020 are:

  • 13-18 August 2020 – 16,000 advisers registered for this exam (registration is now closed)
  • 8-13 October 2020, open for registration until 18 September with over 600 advisers registered to date
  • 5-10 November 2020, open for registration until 16 October with over 300 advisers registered to date.

Adviser exam schedule for 2021

FASEA released their revised Adviser exam schedule on 24 July 2020, noting that it will run six exam sittings in 2021.

FASEA also released revised Exam Practice Questions in July.

Related products

Contact us

Monday to Friday 8am – 6pm (Sydney time)

1800 808 508

Talk to us today

To speak to a specialist complete this form and we'll be in touch.

Help and support

Visit our Adviser Help Centre and search our adviser FAQs.

Additional information

Macquarie Investment Management Limited ABN 66 002 867 003 AFSL 237 492 RSEL L0001281 (MIML) is the operator of Macquarie Investment Manager, Macquarie Investment Manager II, Macquarie Investment Consolidator, Macquarie Investment Consolidator II and Macquarie Investment Accumulator; and is the Trustee of the Macquarie Superannuation Plan.

This information is provided for the use of financial services professionals only.  In no circumstances is it to be used by a potential investor or client for the purposes of making a decision about a financial product or class of products.

The information provided is not personal advice. It does not take into account the investment objectives, financial situation or needs of any particular investor and should not be relied upon as advice.  Any examples are illustrations only and any similarities to any readers’ circumstances are purely coincidental. 

While the information provided here is given in good faith and is believed to be accurate and reliable as at the date of preparation, 23 May 2019, it is provided by MIML for information only.  We will not be liable for any losses arising from reliance on this information.

This information is intended only to provide a summary and general overview on matters and does not constitute legal advice. You should seek legal or other professional advice before relying on this information.

MIML and MBL do not give, nor purport to give, any taxation advice. The application of taxation laws to each client depends on that client’s individual circumstances.  Accordingly, clients should seek independent professional advice on taxation implications before making any decisions about a financial product or class of products.

Copyright 2020 Macquarie Investment Management Limited.