From July 1, 2018, people aged 65 or over have been able to make a contribution into their super of up to $300,000 per spouse from the proceeds of selling their home, with the caveat that the entire property had to be sold.
A downsizer contribution is not subject to the usual contribution caps, and so can still be made even if the member’s balance exceeds $1.6 million.
Although 5000 retirees used this facility in the first year, research indicates a far large proportion of retirees would prefer to access the downsizer provisions while remaining in their own homes.
The new ability for retirees to top up their super by selling a part of their home allows them to re-allocate a portion of the financial resources tied up in their home to super.
The measure could mean an increase of up to $600,000 in super, resulting in a larger income stream from their SMSFs.
The ATO ruling came in the form of an “administrative binding advice” stating a partial disposal of a home satisfies the government’s downsizer contributions legislation – if the process is done through Australian Securities Exchange-listed DomaCom’s Senior Equity Release (SER) product.
Before the ruling, a person had to sell the entire interest in their home to be eligible to make a downsizer contribution.
However, the ATO confirmation on a partial disposal now means that SMSF retirees can sell a partial interest, make a downsizer contribution, then stay in the home.
While the same rules apply when using the DomaCom product as for the government’s downsizer “sell and move” strategy, under the DomaCom model, seniors have a permanent right of abode in their home and retain the title.
Disposing of part of your residence is a big step because, as well as permanently reducing the equity in the home, there are other issues, such as the how ongoing expenses such as rates and maintenance will be handled.
There are also potential issues with Centrelink for anybody receiving a part age pension because you would be converting part of a non-assessable asset – your home – into an assessable asset, namely super. This is why retirees considering the strategy should seek expert financial advice.
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Noel Whittaker, AM, is the author of Making Money Made Simple and numerous other books on personal finance.
Raiders boss Don Furner told the Herald Papalii was signed until the end of 2022, but they were at the “at the pointy end of discussions” about adding a further two seasons, and a deal could even be struck by the end of this week.
“If anyone deserves an extension at the moment at our club, it’s Josh Papalii,” Furner said.
“We’ve been working on the two-year extension for a while and it’s progressing well. He’s happy here and he wants the security.”
Papalii’s extension would take him through to 14 seasons in the nation’s capital. Good mates Jarrod Croker and Wighton are also signed until the end of 2024.
Captain Croker said Papalii deserved any contract extension and the huge praise for his efforts during the win over the Titans.
“The most pleasing part was once ‘Papa’ ankle-tapped him [Fogarty], he bounced to his feet before anyone else and was ready to go again,” Croker said.
“That just shows how much he wanted it and how much effort he was putting in.
“There wouldn’t have been a single Raiders player who didn’t go over and pat him on the back. It showed what it meant to us.
“Papa deserves all the recognition. He doesn’t win all the fitness races at training, but he can play big minutes, and has done for a long time now.
“He’ll go down as a club legend and play a lot of games for the club. He also has a lot of rep footy left in him, he’s only 28.”
Raiders’ head of performance Nigel Ashley-Jones said Papalii played anywhere between 116kg to 120kg, which made his top speed against the Titans extra impressive. Papalii also had to work overtime on his weight “because of his metabolism”.
“But he does all the extras and he’s worked hard to keep his weight right,” Ashley-Jones said.
Stuart loved seeing Papalii put the foot down. Like so many horses he often backs, Stuart said of Papalii: “I was hoping Papa would get there.”
The coach added he often watched Papalii kick goals from the sideline after training, and kick 30m field-goals right and left-footed.
“One of the most disappointing moments for Papa to this day is when he tried to kick a goal in his 200th against Melbourne, only to shank it,” Stuart said.
“I’d never seen him so disappointed and embarrassed. He’s actually a brilliant goal-kicker.
“He’s Canberra through and through. Papa loves Canberra, he loves the jersey, he’s what the club is about.”
The Raiders host Canterbury on Sunday, without Corey Harawira-Naera as part of the agreement with his mid-year switch, before welcoming the Sydney Roosters – and Sonny Bill Williams – in the game that could go a long way to determining fourth place.
Papalii’s efforts this year have been extra special given the number of injuries to so many key forwards, including Sia Soliola, Corey Horsburgh and Emre Guler.
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Christian covers rugby league for The Sydney Morning Herald.
Every winning NRL season is made up of those incredible moments that go above and behind and the Canberra Raiders’ Josh Papalii has pulled off a doozy in his side’s 36-16 win over the Gold Coast Titans.
In shades of some of the great forwards chasing down a speedy back, the 110kg prop chased down the Titans’ 77kg halfback Jamal Fogarty after a close to 60m chase.
After opening up a 22-4 lead at halftime, the Titans were desperate for an early score and looked to have it after Fogarty marked the ball in the in-goal before racing to the 20m with all the Raiders off-side.
After dodging an ankle tap, and brushing off a tackle, Fogarty was in open space — except the Raiders’ prop was not about to give up.
More known for his big hits and being next to impossible to tackle, Papalii showed good speed to get in range of the Titans half, before a brilliant ankle tap.
Fogarty also knocked the ball on when hitting the ground as the commentators collectively lost their minds.
“How did Josh Papalii do that?” Fox League commentator Matt Russell said. “There’s your tackle of the week boys right there.”
“The big freight train ran him down,” Corey Parker added.
Arguably the most excited was Queensland coach Kevin Walters who was giddy when watching the replay of the man who will most likely be a Maroons prop yet again.
“Come back here young fella, and he ankle taps him,” he said. “Then he ankle taps him …” he added before trailing off.
Russell took the reins and asked “We will see some great tackles this year, absolutely bellringers, but will we see a better tackle than a desperation ankle tap from Josh Papalii?”
“I don’t think we will, the big Papa bear still sucking in the oxygen,” an excited Walters added.
Papalii spoke about the play after full-time.
“I wasn’t sure, he was starting to get away there,” he said. “I was going to do a do or die ankle tap and if it didn’t work I was going to catch it on the mouth anyway. I was lucky enough to catch his ankle.”
Papalii remarkably got up to 31 km/h in the chase according to Fox Sports.
Social media agreed following the commentators lead.
Courier Mail journalist Travis Meyn wanted to give “Papalii Dally M” while Canberra Times journalist David Polkinghorne was equally stunned tweeting “PAPALII!!!!! just chased down a halfback! what a green machine!”
Rugby League Project owner Andrew Ferguson added: “Every team needs a winger like Josh Papalii”.
It was an incredible moment and one that will be replayed plenty of times.
While the Titans were the next to score as AJ Brimson forced his way over, the Raiders were building their way into the game with Hudson Young forcing his way over on the crash play, before an intercept from Nick Cotric basically put the game out of reach for the Titans.
“Papa will go down down as one of our greatest players ever when he retires. He’s got a wonderful motor, very skillful for his size, and I don’t say that lightly but he will go down as one of the greats of this club.”
Papalii should make sure he lives this one up because Fogarty is unlikely to ever live it down. The speedy halfback took a quick tap on his own 20m line 10 minutes into the second half, then proceeded to carve a path through a scattered Canberra defensive line.
By the time he sliced through there was open pasture in front of him and only one man in pursuit. Papalii looked as if he was just chasing to avoid the wrath of the coach but the 110kg prop found a late burst of speed, launched, stumbled, reached out and flicked the back of Fogarty’s ankle.
Fogarty crashed to the ground, lost the ball and neither he nor the Titans really recovered. At that point, they were trying to get themselves back in the contest but Canberra raced away to record their fifth win in their past six outings.
Things didn’t get any better for Fogarty either, who was captaining the side for the first time. He took a heavy knock to the ribs as his side endured a second-half fade out against a side that has made a habit of being strong in the final 40 minutes.
The Titans never threw in the towel and battled on well given they were missing Kevin Proctor, Ash Taylor and Jai Arrow. They scored late through Keegan Hipgrave but they continue to lack some of the class and star quality of the better sides in the competition.
They will get some of that next year in David Fifita but for the moment, are finding their wins to be few and far between.
They did start brightly enough when the scored first through Phil Sami but Canberra were only just starting to go through their gears. Jack Wighton helped himself to a first half double, with Nick Cotric and Tom Starling bookending that haul.
It was a convincing second half for the visitors and any hint of a serious Titans resurgence ended when Papalii’s lunge for Fogarty’s ankle found its target.
Canberra still have a number of key forwards to return to their side in coming weeks, with Corey Horsburgh and Sia Soliola both on the way back. That will only strengthen their resolve as they consolidate their place in the eight and press for an all-important top four finish.
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2. US coronavirus aid stalemate: Investors were seemingly not perturbed by the continuing stalemate in Washington over coronavirus aid.
US Treasury Secretary Steven Mnuchin said the White House and top Democrats in Congress may not reach a deal on coronavirus aid. Both US parties traded jabs on who was to blame for blocking relief to tens of millions of jobless Americans.
3. Jobs data on tap: Labour force figures for July will give another snapshot of the havoc wreaked by the coronavirus on the Australian economy.
On Wednesday, Australian Bureau of Statistics figures showed the worst wage growth on record. Through the June quarter, the national wage price index increased by 0.2 per cent, taking the annual rate down to 1.8 per cent. Both results were the worst for the index which the bureau started publishing in 1997.
4. ASX set to rise: The Australian sharemarket is poised to open higher thanks to a strong Wall Street lead, with futures shortly before 7am pointing to a jump of 42 points, or 0.7 per cent, at the open.
On Wednesday, the ASX slid 0.1 per cent lower, with miners dragging.
5. Earnings season: A big day is ahead, with AGL, AMP, Breville Group, Charter Hall Retail, Evolution Group, Goodman Group, QBE insurance, Telstra, treasury Wine and Woodside Petroleum due to report. CBA’s result highlighted yesterday’s busy calendar, with the giant handing out a higher-than-expected 98c dividend.
6. UK’s worst-ever recession: Britain’s economy shrank by a record 20.4 per cent in the second quarter when the coronavirus lockdown was tightest, the most severe contraction reported by any major economy so far, with a wave of job losses set to hit later in 2020.
“Today’s figures confirm that hard times are here,” finance minister Rishi Sunak said. “Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will.”
7. Gold swings back: Gold stabilised after a series of wild swings that saw the metal hit a record on Friday before suffering its worst day in seven years yesterday. It was down again sharply early before rebounding to close 0.3 per cent higher.
8. Market watch:
ASX futures up 45 points, or 0.7 per cent, to 6133 at 6.11am AEST
AUD at 71.62 US cents at 6.16am AEST
On Wall St: Dow +1.1% S&P 500 +1.4% Nasdaq +2.1%
Spot gold +0.2% to $US1916.35 an ounce
Brent crude +1.8% to $US45.32 a barrel
US oil +2.3% to $US42.57 a barrel
Iron ore +0.3% to $US121.51 a tonne
10-year yield: US 0.66% Australia 0.91% Germany -0.45%
This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG
Sydney councils will each be eligible for up to $5.5 million in funding for parklands, town squares and main streets under a state government scheme aimed at speeding up development assessments for projects that boost jobs and housing.
The $250 million funding program is a further attempt by the NSW government to stimulate economic activity and ensure a pipeline of construction projects amid a severe slowdown sparked by the coronavirus pandemic.
NSW Treasurer Dominic Perrottet said councils that fast-tracked assessments of job-creating projects would be given incentives through funding of up to $5.5 million each to spend on upgrading public domains under the state’s public spaces legacy program.
It comes as the government has pushed through determinations for 67 planning proposals and projects worth $17.7 billion, including schools and housing, across the state since the pandemic struck in March. A further 13 projects are due to be decided upon by mid-August after their assessment was sped up.
He said CBA would talk to customers early about their options, which could include resuming payments, switching to interest-only payments or fixed rates, and in some cases dipping into their retirement savings early under a government scheme.
The best thing for the customer is that we have a more difficult discussion with them sooner rather than later.
CBA’s Angus Sullivan
“We’re obviously trying to get hugely ahead of the problem, so that we can turn it into a couple of little hills rather than something which resembles more of a cliff,” Mr Sullivan said.
While some customers have been able to keep up their payments despite seeking a deferral, Mr Sullivan said other customers were in “real distress or hardship.” He did not say how many customers were in this position, but said it was a “minority” of those who deferred their payments.
How many of the deferred loans end up as bad debts is a key issue for investors, while regulators and the government are also working to avoid a sharp shock when deferral periods start to end in September. This is also the planned end date for the JobKeeper scheme, which is supporting some of the people with deferred loans.
Mr Sullivan praised government schemes including JobKeeper, the temporarily increase in unemployment benefit, and the move to allow people to withdraw up to $20,000 from their superannuation account early. All had helped customers with deferred loans, he said.
“There’s obviously been a lot of income stimulus, and we’ve seen that income also provide benefit to our customers who are in deferral,” Mr Sullivan said.
He indicated that for some customers, tapping into super early alongside temporarily switching to interest-only payments could be a solution that helped allow people to keep their homes.
“We’ve absolutely seen a connection between customers who are in deferral and those who are taking advantage of that super early access regime.”
He acknowledged, however, that for others who had lost their jobs and faced a challenging employment outlook, tapping their super early would not be the answer.
Official figures last week showed almost 2 million people had withdrawn money from super early under the government’s scheme, with $14.8 billion paid out.
CBA would consider offering more support to customers unable to resume repayments after the deferral period ended, but he said in some “the best thing for the customer is that we have a more difficult discussion with them sooner rather than later.”
Mr Sullivan also said the government’s cash grants of $25,000 for renovations had sparked a surge in inquiries, with a record number of requests for an appointment, and a quarter of queries to the bank’s call centre focusing on the grant.
South Australia’s Supreme Court has ordered the directors of a prominent Adelaide hotels syndicate to pay $383,000 after they concealed lucrative deals with major breweries from their then-business partners.
Two publicans were found to have concealed lucrative deals with breweries from their partners
The four men involved in the case bought the Windmill Hotel in Prospect in 2016
They later sold the business at a loss of about $425,000
The court found that Brett Viney and Matthew Mitchell did not disclose the deals — negotiated with Carlton and United Breweries (CUB), Asahi and Coopers — for beer taps at the Windmill Hotel with Michael Crouch and son Nicholas.
The deals occurred before the four men bought the hotel, on Main North Road at Prospect, as a joint venture for $1.4 million in 2016.
The alcohol rebates guaranteed that the Windmill Hotel would sell minimum quantities of each brewer’s beer and guaranteed a certain number of taps at the bar, among other conditions.
The court heard the rebates — worth $160,000 from CUB, $30,000 from Asahi and $21,375 from Coopers — were being paid into Mr Viney’s and Mr Mitchell’s corporate entity, the Bloody Mary Group, rather than to the Windmill Hotel.
The Crouches only discovered the detail of those deals more than a year into their co-ownership of the hotel business, which was making significant losses as rebates for its beer taps flowed to the Bloody Mary Group.
In their statement of claim, the plaintiffs wrote the publicans had a duty to “not make any secret profit out of the proposed joint investment in the Windmill Hotel business”.
The publicans argued that Nicholas and Michael Crouch were negligent in their failure to appreciate the existence of the rebates.
But the court found that “this was not a case where the Crouches simply failed to ascertain for themselves the true position in relation to rebates”.
“Mr Viney and Mr Mitchell … concealed and suppressed their intention to enter into the rebate agreements, their intention that the forward rebates be paid to [Bloody Mary Group] and not [the Windmill Hotel], and their communications with CUB, Asahi and Coopers in relation to the rebate agreements.”
The Bloody Mary Group has been a significant owner-operator of hotels in South Australia for years — including the historic Archer Hotel in North Adelaide and the Kincraig Hotel in Naracoorte, which both went into voluntary administration in recent years.
The judge in the Windmill Hotel case found that neither Michael nor Nicholas Crouch, who was a law student at the time, was directly informed of the existence of any of the rebate agreements, let alone the negotiations that preceded them, before signing on to purchase the hotel.
Publican offered ‘incredible or nonsensical’ evidence
The Crouches discovered references to the rebates in financial statements after the first year of new ownership of the hotel.
The court heard that at a meeting in December 2017, Mr Viney did not produce a clear explanation for the rebates when asked.
Mr Viney also did not mention that, earlier that month, he had signed yet another rebate agreement, this time with Treasury Wine Estates, in which the Bloody Mary Group was to be paid $100,000.
The Crouches only became aware of the Treasury deal during the court proceedings.
The hotel never made a profit during the joint venture, and the four men eventually sold it for about $425,000 less than they originally paid.
According to the judgement, Mr Viney’s evidence about the rebates “seemed to evolve”.
Overall, the judge found Mr Viney and Mr Mitchell were “poor [and] evasive” witnesses who sometimes “adhered to evidence that in my view was either incredible or nonsensical”.
“And his preparedness to conceal this agreement from them, even at a time when he knew the Crouches were becoming concerned about the position in relation to rebates, was instructive more generally.”
The judge found that Mr Mitchell “was evasive in his evidence, and in a number of instances refused to make concessions or otherwise adhered to evidence that I consider to have been incredible, implausible, lacking in common sense or inconsistent with other evidence which I consider to be reliable”.
On the other hand, “the evidence of both Nicholas Crouch and Michael Crouch was honest and generally reliable”.
Although the court found the publicans had engaged in misleading and deceptive conduct and breached consumer law, it rejected the plaintiffs’ further claim for breaches of the shareholder agreement in relation to the hotel.
The court awarded $383,609 in damages to the plaintiffs.