What you have said about a Trust is true, except that the distributions form part of the taxable income for all, and in children’s case there is only a small amount you are allowed to distribute to them.
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You can classify it however you like but legally you employ someone on their wage package and of that package you must pay them superannuation. How you word it in your contracts is up to you but the law overrides that. You can update the wording so it’s a package rather than stating wages + super separately. That way when the 9.5% goes up again you don’t need to pay your employees more as opposed to giving them a 0.25% increase for example.
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Also technically there are two scenarios if you are paying ‘directly’ to the ATO.
- You’ve been audited and breached superannuation requirements so the ATO want to make sure you’re doing the right thing now.
- You’re using the free clearing house setup by the ATO for employers with less than 17 employees (which by the way is closing down so you may want to find an alternative soon).
- With regards to children in trusts, the limit applies to children under a certain age. Adult children is fine.
Just as a side note back to franking credits, I feel this is a lead up to not allowing losses from investment properties to reduce someones taxable income. The feel of the two policies may line up nicely.
Not agreeing with it (there needs more detail) but I can feel that it’s very similar.
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Sorry Soulnet I cannot agree.
You have to pay the Compulsory Super on top of the salary currently at 9.5%. If the Compulsory Super percentage increases then you have to pay more. Or be a real tool, and reduce your Staff salary I guess.
And yes we have less than 17 employees, but the Clearing House System has now ended and you now have to pay direct to the ATO as of February 26th; that is the new system
Here’s what you’re looking for with regards to employment contracts.
From Ms Soulnet
“So from feb 2018 the ato clearing house is still used it is just that you now log in via your business portal or link to a my gov account rather than having a separate clearing house log in. So you log in differently and it might appear that you are paying the ato but it is still the small business clearing house. They are trying to integrate their services so everything is accessed via the one method. Then on 1 april you need to do a head count of how many employees you have … if more than 20, then you move to one touch payroll (covering super as well) being 1 july … if less than 20 employees you get another year before you change over.”
She also said it’s been poorly communicated to businesses and a few of her clients are confused as well.
I like the feature of trusts that forces a distribution to be made…in my mind, if James Packer only had the ability to use trusts, and it ultimately forced each year’s income to cascade down into his personal name and basically incur the top personal marginal tax rate, then that would be the system working IMO.
Whereas companies are used to steer income away from the higher personal tax rates…over time, this can build a lot of wealth through the benefits of compounding…
I agree that family trusts, used to spread income across wife and children is a rort. And I’ve been a beneficiary of such a structure!
With respect Mr Soulnet; I am not looking for that.
Only a real tool of a Business Owner would decrease salary to absorb increases in super guarantee. And I am not a tool in that respect.
And I am not confused by the super payments now being made via my ATO business portal. The payment is made to the ATO, not to any other body. They use the same BPay as for GST & PAYG
They must distribute it to the super fund (UniSuper in our case. )
Agreed, but that’s not what you said. You were saying to HAVE to pay on top, but that’s only because of the way your contract is written.
Maybe it’s the wording i’m using that’s confusing you. I’m not denying they forward the money to the super funds of your employees. What i’m challenging is that it’s the ATO themselves who are doing it.
To explain in your terms you pay the ato who forward the super money to the clearing house who then distribute the funds to the appropriate super accounts. The clearing house is like a contractor to the ato but isn’t the ato.
The ato aren’t the only ones with a clearing house around either. For example Xero, MYOB, most industry funds and retail funds have their own clearing house as well. Even unisuper!
Maybe it’s the language you are using. I think in accountant talk, perhaps this is normal business talk 
I am glad you are not my Accountant.
I’m glad you’re not my Client. 
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From the ALP trying to save billions vs a minority losing some tax advantages, we now see what the Tories are up to.
"Australia’s network of marine parks has been gutted. The more pristine the area, the more savage the changes are. The Coral Sea has gone from being the Jewel in the Crown of the Commonwealth Marine Reserves protecting the eastern side of the Great Barrier Reef to now being a haven for longlining and trawling.
They have even massively extended an area of trawling immediately adjacent to the Great Barrier Reef Marine Park.
This decision removes more area from conservation than any decision from any government in any country ever. That’s right, there has never been a step backwards in environmental protection as large as this from any country on Earth."
What a disgrace. At a time when the Reef and environment generally are under more pressure than any other time in human history, we get this massively retrograde step from the Liberals.
Haven’t they farked up the country enough? What else are they going to do?
If you hate this news as much as I do, consider signing the petition. And yes I know Petitions are not worth the paper they are written on, and internet petitions are worth even less, but what else can we do?
[to sign the petition]( Click here: https://www.tonyburke.com.au/get-active/oceans?source=email&)
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signed & shared fwiw
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Any comment Mr Fox?
Andrews Government MPs implicated in Labor rorts for votes scandal
Matt Johnston, Alex White and James Campbell, Herald Sun
March 20, 2018 8:15pm
Subscriber only
AT LEAST 20 Labor MPs are implicated in the rorts-for-votes scandal that has engulfed the Andrews Government in a political crisis.Victoria’s Ombudsman Deborah Glass will release a bombshell report at 10am on Wednesday into ALP misuse of taxpayer funds to pay for campaign staff in a controversial scheme that helped Premier Daniel Andrews win the 2014 election.
More than 20 Labor MPs — including some serving Cabinet ministers — are believed to be caught up in the investigation into the election campaign funding rort.
The watchdog’s investigation was sparked by Herald Sun revelations in September 2015 that hundreds of thousands of dollars were diverted from taxpayers to help bankroll an army of grassroots campaigners dubbed “red shirts”.
In other major developments on the eve of the report’s release, the Herald Sun can also reveal:
LABOR figures expect the watchdog to name each of the 20-plus MPs, in a move that will intensify pressure on them to repay the money and threatens to undermine the government leading into this year’s election.
THE amount each MP charged taxpayers varies widely, with some wrongly charging tens of thousands of dollars in staff wages to parliament. The overall sum rorted is hundreds of thousands of dollars.
HUNDREDS of days of red shirts’ campaign work was wrongly charged to the public by the MPs.
TIMESHEETS used to facilitate payments were often filled out in advance, and are expected to come under close scrutiny in the report.
Labor insiders say the state’s integrity watchdog is likely to have probed the involvement of Labor’s 2014 campaign committee in approving the funding scheme.
Key members of that committee include Mr Andrews, his right-hand man and Special Minister of State Gavin Jennings, Labor’s then state secretary Noah Carroll, Attorney-General Martin Pakula, and senior federal MPs such as Kim Carr and former senator Stephen Conroy.
On Tuesday, Deputy Premier James Merlino continued to defend the scheme as a “pooling” of staff, and said the party had acted “within the rules”.
Lol, MPs using their electoral offices to get re-elected !! Hmm, think they have been doing that for ever and ever. Who gives a crap ?
The guy central to this enquiry is a severe fruit-loop. Well suited to politics !
And while on the subject of Deborah Glass; farking ombudsperson’s have more power than God or the ATO. They can compel you to give evidence and send you direct to jail without trial if you refuse. I was once subpoenaed by the Victorian Ombudsman, and was told it was an offence to tell anyone about it. I was advised to lie to my Wife and Staff about my whereabouts for the interrogation, or I would be charged with contempt.
So who leaked the report?
While I agree with Bacchus, “Ombudsman” is an import from a Scandinavian language so does not need to have imposed upon it an ugly PC ending.
Of course, neither do many other words ending in -man, which is why we thankfully have not yet had huperson inflicted on us.
Daniel Andrews does, that’s why he spent $1,000,000 trying to supress the investigation. Taxpayers $1,000,000.
Blah, blah, blah.
If anyone has broken the law then let the police do their thing. Political witch-hunts are just rubbish and it is time they all grew up.
If Parliament spent their time actually governing instead of soap opera we would be all better off, including if little napoleon wants to have lobster with the mafia.
I just find all this stuff puerile and as I said the guy who first complained is a real fruit-loop, who you can see at every bomber game being a fruit loop.
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Here is an easy load of BS from from the LNP to take onboard
Health insurance up by average 4% mine went up 13.15%