We are updating AdviceOS in line with changes introduced in the 2021-22 federal budget, new legislation, and other changes to ATO rates and thresholds. Some of these updates are live now, and some will come into effect on 1 July 2021.
Summary of Changes
Fee Disclosure Statements (FDS)
New laws governing Fee Disclosure Statements (FDS) come into effect 1 July 2021, changing how consent/opt-in must be captured and introducing new content requirements for the disclosure document.
Midwinter has made an upgrade to the Advanced Admin module, allowing users to effectively manage their FDS obligations under the new rules. More information on the new functionality can be found in the quick start and user guide on Midwinter’s help site.
Annual caps and limits
Various ATO rates and thresholds have been adjusted as a result of the Federal Budget announcement. All measures below have been updated in AdviceOS on or before by 1 July.
Transfer balance cap
From 1 July 2021 the transfer balance cap will be between $1.6m and $1.7m, depending on the individual’s situation. ATO online will publish an individual’s personal transfer balance cap, however the following outlines how the cap is determined.
| Situation before 1 July 2021 | Transfer balance cap |
|---|---|
| Started income stream | Cap is proportionally indexed between $1.6m and $1.7m* |
| Not started an income stream | Increases to $1.7m |
| Met or exceeded the cap | Remains at $1.6m |
AdviceOS will apply the relevant cap (indexed or flat) automatically in Cashflow modelling.
Defined benefit income cap
When an individual has a defined benefit income stream, there is a cap on the annual income that can be received.
The current cap of $100,000 will be increased to $106,250 and is reflected in AdviceOS Cashflow modelling.
Non-concessional cap limits
When an individual’s total superannuation balance exceeds the limit, their non-concessional cap is reduced to $0.
This limit is being increased from $1.6m to $1.7m, with no proportional indexation. All strategy modules and relevant product modules have been updated to reflect the new limit.
Total superannuation balance
When an individual’s total superannuation balance exceeds the limit, they are no longer eligible for Government co-contributions when they make non-concessional contributions.
This limit is being increased from $1.6m to $1.7m, with no proportional indexation. All strategy modules and relevant product modules have been updated to reflect the new limit.
Extension of the pension reduction
On 22 March 2020 the federal government announced that the minimum pension drawdown would be halved temporarily. This was to support many retirees who had seen Super and Pension balances reduced due to the coronavirus crisis.
On 29 May 2021 it was announced that this temporary reduction would also be extended for the 2021/22 financial year. All relevant strategy modules have been updated to reflect the extended drawdown.
General rates and thresholds
Quarterly updates from the ATO are monitored by Midwinter and as updates rates are available, they are implemented in AdviceOS modelling. The below rates have been updated as part of the latest April 2021 updates from the ATO.
- General rent assistance increased across all criteria ranges.
- FTB rent assistance has minor increases in across all criteria ranges.
- Aged pension amount (base plus supplement) increases for singles and couples.
- Transitional pension amount (max rate plus energy supplement) increases for singles and couples.
- Minimum supplement cut off rates has minor increase for singles and couples.
- Jobseeker partner income test has been lowered.
- Jobseeker tiering for personal income test updated.
Additional Information
If you have any questions, you can contact your account manager or our customer support team by emailing [email protected] or call 1300 882 938.
