Protect Your Lifestyle—Issue 24 1

PROTECT YOUR LIFESTYLE

Authorised Representative of Millennium3 Financial Services Pty Ltd AFSL 24252

Brett Le Man & Associates Edition 24—2018

General Advice Warning: The information [including taxation] is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable

professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product. The information [including taxation] is general in nature and may not be relevant to your individual circum-

stances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice. You should obtain and consider a Product Disclosure Statement [PDS] before making any decision to acquire a product

In This Issue

Federal Budget Summary

Do You Have?????

Life, TPD & Trauma

Protect your most

important asset— your

income

10 Tips for Your

Retirement Planning

Investment Bonds

Income Protection

{Agreed Vs Indemnity}

One Pan Recipe

Important Contacts

Welcome to our 24th edition of Protect Your Lifestyle. I hope everybody has had a

great year thus far. For the past 12 months we have had many claims. Fortunately

our clients have been covered, however, it’s never easy, being told by my client …..

“if only I had” ……

We empathise with those who have faced illness or injury and offer our deepest

condolences to the families who have lost a loved one.

Going forward, there has been a lot of changes to our industry (reduction levels).

Currently we receive commission for risk recommendation business (Life, TPD, Trau-

ma & Income Protection), our advice documents (SoA) are paid out of our commis-

sions but the changes and decreases to our commission structures have had a flow

on effect and unfortunately we are forced to implement changes to keep up with

the industry to keep our business sustainable.

ASIC have set an education standard with expectations that we are to keep up to

date with all aspects of training plus regulatory compliance. This all comes at a

cost to us and advertently the consumer.

We endeavour to be reasonable as we look at changes to our fee structure and cli-

ent segmentation.

We look forward to reviewing your circumstances and keep a professional standard

at a reasonable cost. All the best for the year ahead.

Cheers

Brett Le Man

Protect Your Lifestyle—Issue 24 2

FEDERAL BUDGET SUMMARY

Federal Budget Update 2018/19

The announcements in this update are proposals unless stated otherwise.

These proposals need to successfully pass through Parliament before becoming law and may be subject to change during

this process.

What you need to know

The Budget is forecast to return to surplus in 2019/20

with a positive balance of $2.2bn

The economic outlook remains positive with a forecast

surplus in 2020/21 of $1.1bn

Income tax relief for low-income and middle-income

earners —up to $530 per annum via a tax offset—for

four years commencing 1 July 2018

Addressed income tax bracket creep—as part of a seven-

year plan to ultimately eliminate the 37% tax bracket

A major crack down on tax cheats and the black economy

The Medicare Levy will not be increased to 2.5% as pro-

posed in the 2017/18 Federal Budget, instead it stays at

2%

Superannuation—exit fees banned, a 3% passive fee cap

for accounts with balances less than $6,000 and a volun-

tary contribution work test exemption for the financial

year following the financial year people aged from 65 to

74 retire whose balance is less than $300,000

Social security—the Pension Loans Scheme is to be ex-

tended to all older Australians including self-funded retir-

ees, enabling retirement income to be boosted up to

$17,800 per couple without losing the pension or other

benefits

Social security — an increase in the work bonus from 1

July 2019 to try and encourage more Australians into paid

employment

Child care — more than 85% of families will receive the

full Child Care Subsidy from 2 July when the threshold in-

creases to a combined income of $187,000 p.a.

Aged Care—seniors will be encouraged to continue living at

home rather than going into care with the help of $1.6bn

allocated to providing $14,000 home care places over the

next four years

Small business—the $20,000 instant asset tax write-off to

be extended another year to 30 June 2019

Education—schools to receive an extra $24.5bn over 10

years to fund needs-based education—an average increase

of 50% per student

Infrastructure—major spending on rail and road including a

$1bn Urban Congestion Fund to improve traffic flow

Energy costs—estimated to reduce by $400 per year on

average for every Australian household from 2020, courte-

sy of the National Energy Guarantee

Farmers and rural Australia—to benefit from $125m allo-

cated to improve GPS technology and weather forecasting

Protect Your Lifestyle—Issue 24 3

Superannuation changes

Additional contributions opportunity for recent retirees

From 1 July 2019, if you’re aged between 65 and 74 and your

super balance is less than $300,000 you will be exempt from

the work test that otherwise applies to voluntary super contri-

butions. This applies only to the first year in which you fail to

meet the work test requirements, but if you qualify you may

be able to make substantial additional contributions to super.

New fee rules from 1 July 2019

Exit fee on all superannuation account will be banned

Funds on accounts with balances below $6,000 will see a

3% annual cap on passive fees, charged by superannua-

tion funds.

Insurance in Super

The Government’s ‘Protecting Your Super Package’ includes

changes for insurance within superannuation to move from

an opt-out basis to opt-in, for members who.

Have balances of less than $6000

Are under the age of 25 years

Have an account that has not received a contribution in

13 months and are inactive.

These changes are intended to protect retirement savings

from the cost of having premiums for unnecessary or dupli-

cate insurance cover. The measure proposed to start from 1

July 2019 and affect members will have 14 months to decide

whether to opt-in to their existing cover or allow it to cease.

Your financial adviser can help you identify the appropriate

options for you to protect the people who depend on you.

What’s next?

Most changes must be legislated and passed through Parlia-

ment before they apply. If you think you may be impacted by

some of the Budget’s proposed changes, you should consider

seeking professional advice. A financial adviser can give you a

clear understanding of where you stand and how you can

manager your cash flow, super and investments in light of the

proposed changes.

If any of these proposals raise questions, concerns or new

opportunities for you, speak with your financial adviser today.

Overview

The economic plan delivered by Treasurer Scott Morrison on

Tuesday 8 May is centered on Tax:

Providing tax relief to low-income and middle-income earn-

ers

Addressing bracket creep with a seven-year plan that will

see the 37% tax bracket disappear entirely

Maintaining the Medicare Levy at 2%

Cracking down on tax cheats and the black economy

Tax relief and radical reform

The tax relief promised by the tax offset will take effect from 1 July

2018:

People earning up to $37,000 will receive a tax offset of up to

$200

People earning up to $90,000 will receive up to $530

People earning from $90,000 to $125,333 will receive an offset

that tapers to nil.

The radical plan to eliminate the middle tax bracket of 37% is a long

way off, both chronologically and politically—7 years and two elec-

tions. All going well, it will be implemented in three phases culmi-

nating in a tax scale that, from 1 July 2024, will be as is shown in the

below table.

Medicare and health

In the 2017/18 Federal Budget, the Government proposed a substan-

tial increase from 2% to 2.5% to help fund the National Disability Insur-

ance Scheme (NDIS). This would have added the average family ap-

proximately $600 extra per year .* The Treasurer announced that this

will no longer be necessary and the Medicare Levy will stay at 2%.

The Budget also includes an agreement that will see public hospitals

receive over $30bn in extra funding between 2020/21 and 2024/25

*The Daily Telegraph 8 May 2018

Crackdown on welfare cheats, tax cheats, and the black

Economy

The Government aims to save $229m over three years by intensifying

its fraud detection and debt recovery. To stamp out money laundering

and tax evasion, from 1 July 2019, cash payments over $10,000 will be

illegal, they will have to be made by electronic transfer or cheque in-

stead. Multinationals will also be targeted with a crackdown on sta-

pled securities and tightened thin capitalization rules.

Income Tax Bracket Tax on Income

$0—$18,200 0%

$18,201—$41,000 19%

$41,001—$200,000 32.5%

$200,000+ 45%

This information is issued by Millennium3 Financial Services Pty Ltd ABN 61 094 529 987, which holds Australian Financial Services Licence Number 244252 and is a summary of Millennium3

Financial Services Pty Ltd understanding of the proposed Federal Budget 2018/19 changes announced on 8 May 2018. The changes are subject to the passing of legislation and, accordingly, may

not become law or may change. Please note that the information is based on Millennium3 Financial Services Pty Ltd interpretation of the proposed changes as at the date of issue of this docu-

ment. Accordingly, you must not do or refrain from doing anything in reliance on this information without obtaining suitable professional advice. In addition, the information is of a general

nature and may not be relevant to your/your client’s individual circumstances. Before making any investment decision you must consider the relevant PDS, available on request by calling Mil-

lennium3 Financial Services Pty Ltd. This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without obtaining

professional financial advice specific to your circumstances. If you wish to opt out of future communications please contact us. 201805/M3/FBCS/V1

Protect Your Lifestyle—Issue 24 4

Life Cover?

Have you Held your Policy

for 3 or 5 Years?

Have you gotten married,

had a baby or adopted a

child within the last

30—60 days?

Bought a house or Increased an

existing mortgage?

TPD? Trauma?

DO YOU HAVE

You may be able to increase

your existing policy without

further underwriting…

We have listed only a few events

above. For more details contact

us to discuss your policy and see

what options you are entitled to

under your policy.

Your ability to earn an income is your most important asset because your lifestyle depends on it. However, if you had to stop

work tomorrow because of an accident or illness, would you be able to continue to pay your bills and afford the lifestyle you

currently enjoy?

Income Protection cover pays up to 75% of your income to help you and your family meet the cost of living if you are injured

or ill. Meaning you can focus on your recovery instead of the burden of finances.

There are other types of cover to consider too, such as Critical Illness cover and Total & Permanent Disability. All are designed

to help you financially if you can’t work due to illness or injury.

Get personalised advice that’s right for you!

Give me a call today to help you find the right insurance solution and discuss the best way for you to protect your most im-

portant asset – your income.

Protect Your Lifestyle—Issue 24 5

Check that your super fund has your tax file number (TFN). If your super fund doesn’t have your TFN, your concessional

(before-tax) contributions are hit with penalty tax, and you won’t be permitted to make non-concessional (after-tax) contribu-

tions. And as bad things happen in threes, you’ll also be excluded from the co-contribution scheme.

Combining super accounts can save you thousands of dollars in fees, and if you don’t combine them quick-smart, the ATO may

snuffle your member accounts under new compulsory transfer laws that were introduced from July 2013. Note that the super

account thresholds for the ATO snuffling your money were changed again from January 2016 (increased to $4,000), and also

changed again from January 2017 (increased to $6,000). If you’re not sure how many super funds you currently have, then

locating these accounts and consolidating your super can add thousands of dollars to your retirement savings in an instant.

Ensure that you have clear plans about what happens to your super benefits and non-super assets in the event of your death.

Doing some planning now can save your family a lot of heartache, and possibly save thousands of dollars in tax. Identifying

who receives your super benefits when you die (by ensuring you nominate your beneficiaries) becomes more important when

you plan to leave your super benefits to a non-dependant for tax purposes, such as a financially independent adult child.

If your tolerance for ‘New Year’ super resolutions, has already reached its limit, then the SuperGuide article 8 steps to super

success provides a quick overview of what we believe is the bare minimum for anyone hoping for a reasonable superannua-

tion balance on retirement: for example, check fees, investment performance and life insurance.

The first step is to work out when you plan to retire and what type of income you want to have in retirement. You can then

calculate how much money is necessary to finance your preferred retirement income from the age you retire until the day you

die (or beyond if you have dependants you want to look after). Work out how much super and other savings you have now

and what type of cash you will have if you continue your current savings strategy. If there is a gap between how much you’ll

have and how much you want then you have even greater motivation to make the most of the super rules. Alternatively, if

you have substantial assets sitting outside the super system you may want to consider shifting some or all of your super assets

within the super environment.

The level of income you earn will generally determine whether you make after-tax or before-tax contributions. If you pay

more than 15 cents in the dollar tax, then super starts looking attractive from a tax saving point of view. You may also be in-

terested in making before-tax contributions if you want to offset a large capital gains tax bill.

1. Supply TFN to your super fund

2. Combine your super accounts

3. Identify your dependants and non-dependants

4. Aspire to super success in 8 steps

5. Do a financial stocktake

6. Consider making concessional (before-tax) contributions

10 TIPS FOR YOUR RETIREMENT PLANNING

Protect Your Lifestyle—Issue 24 6

Warning: Anyone considering making further super contributions (in addition to compulsory employer super contributions –

Superannuation Guarantee), or anyone on a high income, needs to be mindful of the contributions caps. If you exceed the

concessional contributions cap, expect to be hit with penalty tax, or have the inconvenient opportunity to withdraw your ex-

cess contributions and be taxed at your marginal tax rate. NOW is the time to check the level of super contributions that you

make, or are made on your behalf by your employer, to ensure that you don’t exceed the contributions cap inadvertently.

Since 1 July 2017, if your adjusted taxable income is greater than $250,000, your concessional contributions are hit with an

extra 15% of tax, which means concessional contributions of very high income-earners are hit with 30% tax. From 1 July 2012

until 30 June 2017, your concessional contributions are hit with extra tax, if your adjusted taxable come is greater than

$300,000 a year.

The annual non-concessional contributions cap is $100,000 for the 2017/2018 year. If you’re under the age of 65, you can

bring forward up to two years’ worth of non-concessional contributions. Warning: Since 1 July 2017, if your total superannua-

tion balance is greater than $1.6 million, you cannot make non-concessional contributions (for more information

see SuperGuide article New normal: $100,000 non-concessional contributions cap.

Note: If you are a small business owner you may be eligible for a $1.445 million after-tax contribution limit for the 2017/2018

year (indexed), which is a lifetime contribution limit, in addition to the non-concessional contributions cap. The CGT exemp-

tion permits personal contributions resulting from the disposal of qualifying small business assets. If you believe that you may

be eligible then seek independent advice because the rules that apply to this exemption are complicated.

Anyone under the age of 65 can make super contributions regardless of whether they are working. If an individual is aged 65

or over, then he or she must work 40 hours in a 30-day period during the financial year in which they plan to make the contri-

bution.

The co-contribution is a tax-free super contribution from the federal government when you make a non-concessional (after-

tax) contribution.

Warning: Since 1 July 2017, if your total superannuation balance is greater than $1.6 million, you will not be eligible for the co-

contribution scheme contributions (for more information see the co-contribution guide above, and for more information

about the $1.6 million limit, see SuperGuide article New normal: $100,000 non-concessional contributions cap.

If you’re willing to spend some money…

If you’re making major financial decisions, particularly decisions with significant tax implications, then consider seeking inde-

pendent tax from an accountant or, if you’re planning to embark on major financial strategies involving investments, perhaps

a financial adviser. If you do plan to use a financial adviser, then ensure the one you choose understands the super rules and

charges a fee for advice. Independent advisers are difficult to find, but not impossible.

7. Consider making non-concessional (after-tax) contributions

8. If aged 65 or over, check that you meet the work test before contributing

9. Check eligibility for co-contribution

10. If necessary, consider talking to an independant adviser

Source: https://www.superguide.com.au/boost-your-superannuation/checklist-super-tips-retirement-planning

General Advice Warning: The information is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice . You should obtain and consider a Product Disclosure Statement

[PDS] before making any decision to acquire a product. For further information on this article please go to www.superguide.com.au

Protect Your Lifestyle—Issue 24 7

We’ve all heard of Agreed Value and Indemnity when it comes to income protection, but

do we understand all the intricacies and how it can affect the amount payable at claim

time?

A number of factors need to be considered, such as, how much can the client afford, will

their income increase or decrease in the future, and can they prove their income when

requested.

I thought I would share some of the most common questions surrounding Agreed Value

vs. Indemnity:

1. Which occupation (s) suit the different types of cover?

Under Agreed Value, your client’s benefit is based on their income at time of application,

which has the advantage of showing what they will receive if a claim is submitted, regard-

less of any fluctuations. In turn, this attracts a higher premium. This type of cover could be

seen as more suitable for self-employed people or occupations where their income fluctu-

ates.

With Indemnity, your client’s benefit payment is determined at time of claim based on

their highest average monthly income over a defined period of time prior to their disabil-

ity (Pre-Disability Earnings). This type of cover could be seen as more suitable for regular

salary earners ie. Office workers

2. What is the pricing difference?

An Indemnity policy’s premium is on average 15 per cent cheaper than Agreed Value,

although your client will have access to all of the same ‘included’ and ‘optional’ cover

benefits.

3. Does Agreed Value mean financials will not be required at time of claim?

A common misconception is that Agreed Value locks in the benefit payment and there is

no requirement to prove prior to inception earnings for a Total Disability claim. This is

not the case where a policy was never fully financially underwritten at time of applica-

tion. It is recommended that an endorsement is asked for at application time to avoid

having to provide financial evidence at claim time.

4. How does the Pre-Disability Earnings definition make a difference?

The Pre-Disability Earnings definition is used to substantiate the benefit amount under an

Agreed Value policy or an Indemnity Total Disability claim.

And the Partial Disability benefit uses a formula that is based on Pre-Disability Earnings.

The higher the Pre-Disability Earnings, the higher the Partial Disability benefit payable.

By taking into account your client’s earnings over a longer period of time, the insurance

company is able to award a more generous benefit on more occasions.

Interested in upgrading your policy to an Agreed Value contract?

INVESTMENT BONDS A simple way to build your savings

Sometimes called a “Growth” Bond, these are

designed to offer you a simple and tax effec-

tive way to invest. You can do this by making

regular contributions or by starting with a

single lump sum [or both].

You might choose to invest in an Investment

Bond because: -

Your looking to invest tax effectively over

the longer term

Your don’t want to lock all your money

away into superannuation

You want to save for the future financial

needs of a child [e.g. first home, educa-

tion or wedding]

You want to have an investment where

you have confident in the estate planning

outcomes

You want to avoid unnecessary tax return

complications of other investments

Growth Bonds allows you to take advantage of

the tax treatment available in this type of

product. These include the 10 year tax rule

and the 125% opportunity. If you hold your

investment for 10 years from the original in-

vestment date and make no withdrawals, you

do not need to pay personal income tax on

any investment earnings. Subject to the 125%

opportunity requirement being met. This

means that after 10 years there will be no

personal income tax on any gains [investment

earnings] made on your bond when you with-

draw.

Do you think this is for you?

Source: AMP Growth Bond PDS Issue 2—13 Feb 2010

Source: Adam Ozols—TAL BDM

Protect Your Lifestyle—Issue 24 8

One-Pan Lamb shanks with lemon potatoes

This slow-cooked lamb shank tray bake with lemon potatoes, tomatoes and

INGREDIENTS

□ 1 tablespoon extra virgin olive oil

□ 1 tablespoon chopped rosemary

□ 2 garlic cloves, crushed

□ 1/2 teaspoon mild paprika

□ 4 lamb shanks

□ 1/2 cup lemon juice

□ 1 cup chicken stock

□ 2 tablespoons tomato paste

□ 1 teaspoon dried oregano

□ Extra 2 garlic cloves, sliced

□ 1kg red royal potatoes, unpeeled, thickly sliced

□ 2 dried bay leaves

□ 1 cinnamon stick

□ 2 x 200g punnets truss cherry tomatoes

□ 100g green beans, trimmed

□ 1/2 cup roasted peppers, drained

□ 2 tablespoons chopped fresh flat-leaf parsley

□ 2 teaspoons lemon zest

METHOD

Step 1 Preheat oven to 180C/160C fan-forced.

Step 2 Combine oil, rosemary, crushed garlic and

paprika in a large bowel. Season with salt

and pepper. Add lamb shanks. Toss to

coat.

Step 3 Combine lemon juice, stock, paste,

Oregano and extra sliced garlic in a large bowl. Season with salt and pepper. Add potato, bay

leaves and cinnamon. Stir to combine. Place in a large roasting pan. Nestle lamb shanks into

potato mixture. Cover tightly with foil. Bake for 3 hours.

Step 4 Uncover. Sprinkle with tomatoes, beans and peppers. Bake, uncovered, for a further 30 minutes

or until lamb is tender.

Step 5 Sprinkle with parsley and zest. Serve.

*Easy *0:20 Prep *03:30 Cook * 4 Servings

green beans is easy to make and tastes

delicious.

Doctors Advice…………A doctor was walking down the street one day when he noticed coming towards him one of his 85

year old patients with a very beautiful, well-built young lady on his arm.

He was looking the happiest he had ever seen him. When the old guy noticed the doctor he went

up to him and said, "Well Doc. I took your advice and look at me." Puzzled, the doctor asked

what the advice was. "

You told me to get a hot Mama and be very cheerful," he replied.

"Oh no. I told you that you had got a heart murmur and to be very careful."

Source: https://www.taste.com.au/recipes/one-pan-lamb-shanks-lemon-potatoes/wx2m0745

Protect Your Lifestyle—Issue 24 9

INSURER

CUSTOMER SERVICE

CONTACT

CLAIMS

AMP 1300 785 066

8:30am-5pm EST

1300 366 214

AIA

1800 033 490 [Option 3]

1800 033 490 [Option 1]

ASTERON LIFE

1800 221 727

life_customerservice@asteronlife.com.au

1800 024 812

COMMINSURE 13 10 56 [Option 1]

8am-8pm [Mon-Fri]

13 10 56

[Option 1 then Option 5]

MLC 132 652

8am-6pm AEST [Mon-Fri]

1300 125 246

ONEPATH 133 667

8:30am-6:00pm [Mon-Fri]

TAL 1300 209 088

8am-7pm [Mon-Fri]

1800 101 016

[Option 2]

ZURICH

132 687 [Option 3]

1800 208 130

**HAVE YOUR POLICY NUMBER READY**

CONTACT US for more information about our services & products

Phone: 07 3841 0368

Mobile: 0418 983 722

Email: admin@brett-leman-associates.com.au

Office: Unit 3, 3 Fermont Road, UNDERWOOD QLD, 4119

YOUR FEEDBACK IS IMPORTANT TO US

If you would like further information on any of these articles or want other items of inter-

est to be included in our newsletter, please contact us on 07 3841 0368 or via email on

admin@brett-leman-associates.com.au