Archive for October, 2016

Retirement Living – Life beyond bingo and bowls!

retirement-livingRetirement Living

Life beyond bingo and bowls!

 

Not surprisingly people talk about buying their first home as being a life changing event and it is. However, in the past it has been rare for people to talk so excitedly about moving into some form of retirement living.

Given that sooner or later most of us are likely to have to deal with this issue either because we are assisting our parents, another family member or friend in making the transition from their home to a retirement community or because we are considering such a move for ourselves, it is important to know what your options are and to understand the legal and financial implications that come with this type of move.

 

A world of options

In days gone by the very notion of a retirement home was enough to send a shiver down many people’s spines. Thoughts of early dinners and endless games of bingo did little to encourage our more mature citizens to view this as a desirable life stage.

The good news is that things on the aged care front have changed considerably in the last decade and there is now a wider choice of accommodation options available than ever before.

Choices range from luxurious apartment complexes for the “Over 55” community through to multi-functional retirement communities where a variety of accommodation and services are provided on the one site ranging from independent living right through to around the clock nursing care of the more traditional nursing home variety.

 

Things to think about

The key to any successful life change usually starts with learning about the options available and understanding the legal and financial obligations that come with each option, so get out and start looking at what is available in the area where you or the person you are assisting would like to live. Then once you have an idea what is available in the area and price range you are looking for start considering the legal and financial issues that go hand in hand with the more emotional part of the process.

 

Remember not all retirement communities are created equal

First up ask “Is this the right retirement community for me?” If you are helping someone else it might not be right for you personally but is it what they are looking for?

Now this may sound like an obvious question, but it is important not to be dazzled by a new fancy fit out if on closer inspection the retirement community does not offer the range of services needed or if it is so far from family and friends that visitors will be few and far between and social isolation is likely to occur.

Just as every suburb and neighbourhood has its own quirks every retirement community is different and this is definitely not a case of one size fits all.

 

The Wish List

Make a wish list of what you are looking for.

At the top of the list put the “must haves” and at the bottom of the list add the “would be nice but not essential” things.

Things to consider including might be:

  • being close to public transport,
  • a range of on-site activities,
  • nursing assistance being available if needed,
  • a one-stop shop with different care levels all catered for in the one complex, or
  • proximity to current neighbourhood and family and friends.

Each person will have a different set of priorities.

The more you are able to focus on what is most important the easier it should be to eliminate options that are not the best for you and also the easier it will be to avoid getting side tracked by things that really don’t matter quite as much.

 

Some important things to think about

Making a move into a retirement community is a significant life change and there are emotional, financial and legal issues that will come up along the way.

Some things to consider before signing any paperwork and making a commitment of this kind include:

  • Do I need to sell my home first before I can afford to move?
  • If I buy into a retirement community what exactly am I buying?
  • Is the property strata or community titled or does some other form of ownership apply?
  • Does the property I am buying form part of my estate after I die or does ownership revert to some other entity (such as the company that operates the retirement community)?
  • Exactly what does the contract say – what are my rights and responsibilities under the contract?
  • Are there any ongoing fees and charges in addition to the purchase price?
  • What other costs do I need to factor in when I move? Don’t forget to include moving costs and possibly storage costs if you won’t be able to take all your possessions with you and are not yet ready to part with things you cannot fit into your new home.
  • Do I have to pay the whole price upfront or can you pay a portion of the cost and then pay the balance in ongoing instalments? Are they any other payment options such as pension sacrifice available?
  • Will the move into a retirement community affect any pension or rent assistance currently received?
  • Is the facility able to provide a higher level of care later on if your needs change or would you need to move to a different facility if your care needs increased?
  • What costs are associated with any care provided?

Ask for help

This type of move can prove to be a challenging one for both the person involved and anyone assisting them and it is important to understand exactly what is involved legally and financially before entering into any contracts.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Ex-de factos & your Will – Isn’t a property settlement enough?

ex-defacto-and-willEx-de factos & your Will – Isn’t a property settlement enough?

 

The incidence of de facto relationships has been increasing for some time, and that trend is likely to continue. Since 2009, the legal regime for property settlement has been the same whether the separating couple had been married or living in a de facto relationship. However, the law doesn’t always treat married and de facto couples the same. The law relating to what happens to your assets after you die is one area where there are some differences.

This article explores what might happen if a de facto couple made Wills during their relationship leaving their assets to each other, then, as often happens, were forgotten and unchanged after the relationship ended.

Isn’t your property settlement enough?

Many people think that once they have divided up their assets, neither partner could have a financial claim on the other in the future (except, of course, for child support if that is relevant). Some people also think that, because they weren’t married, their ex-de facto has no future financial claim. Those assumptions aren’t always correct.

The laws dealing with Wills and inheritances are completely distinct from those relating to division of assets after a relationship breakdown. A family law property settlement does not change someone’s Will, nor can it necessarily prevent someone receiving a gift left to them in their ex-partner’s Will.

So, can your ex-de facto inherit?

The answer to this question will depend on factors such as whether you had a Will, what were its terms, how long you lived together, whether you and your partner had joint children, and any financial support being provided by the deceased to the former partner. The answer may also depend on where you live.

According to a recent Western Australian case, Blyth v Wilken, another relevant factor could be the precise words you used to refer to your ex-de facto in your Will.

That case dealt with a Will in which the deceased left his assets to his now ex-de facto, with the parties having separated three years before the deceased’s death. The Will, made when the couple was living together, left the deceased’s estate to “my de facto wife Kathrine”.

The Court placed considerable importance on the words “my de facto wife Kathrine”, and decided that the deceased didn’t merely intend to benefit Kathrine; he intended to benefit Kathrine because she was his de facto wife. Accordingly, the Court concluded that the deceased would not have wanted Kathrine to benefit from his estate as she was no longer his de facto wife at the time of his death.

Would different words have made a difference?

As the decision in this case depended on the use of the words “my de facto wife Kathrine”, the outcome may have been different if the Will had merely referred to Kathrine by name, without also describing her as “my de facto wife”. That is, despite separating from the deceased years before he died and regardless of whether she had also received a property settlement, Kathrine could have received her former partner’s estate.

Some words of caution

The case of Blyth v Wilken is only one decision of a single Master (not a Judge). The decision is not binding and a Court could come to a different decision on similar facts. Hence, a reference in your Will to “my de facto partner such and such” will not necessarily guarantee that that person will not benefit from your estate in the event that your relationship ends before your death.

In NSW, Victoria, South Australia, Western Australia and the Northern Territory separating from your de facto partner will not change your Will and any gift in your Will to your ex-de facto could still be valid, despite the fact that you have separated and divided up your assets. In the ACT, Tasmania and Queensland, termination of a registered de facto relationship will revoke any gift in your Will to your ex-de facto partner. However, this only applies to registered relationships and registered terminations of them; and in the ACT it only applies to registered same sex relationships.

Depending on the State or Territory in which you live, you may also need to be wary of ex-partners making a claim for financial provision from your estate, even if you have changed your Will and had a property settlement. In general terms, in NSW, Tasmania, Western Australia and the Northern Territory your former de facto could make a claim on your estate if he or she was being maintained by you at the time of your death. Similar provisions apply in Queensland if your ex-partner is also the parent of your minor child. In Victoria, the entitlement to make such a claim is dependant on you and your ex-de facto not having finalised a property settlement by the time of your death.

The ACT and South Australia represent the two extremes. In the ACT, any ex-de facto from a relationship exceeding two years could be entitled to extra provision from your estate, regardless of whether or not he or she was dependant on you at the time of your death. However, the Court will take into account the terms of any post-separation property settlement. In South Australia, on the other hand, ex-de facto partners are not entitled to make such a claim at all.

Conclusion

Regardless of where in Australia you live, if you are going through a relationship breakdown, always speak with your family lawyer about what might happen if you or your former partner dies, even after you have completed your property settlement. It is important to review, and if necessary change, the terms of your Will as soon as possible after the ending of any relationship. In addition, in NSW your family lawyer could assist you to apply to the Supreme Court for approval of an agreement between you and your former partner that neither of you will make a claim on the other’s estate after the other’s death.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Employee or Contractor – do you know the difference?

Employee or Contractor – do you know the difference?

It’s important for all businesses to have systems in place to determine whether workers should be classified as employees or independent contractors, as tax, super and other government obligations are different depending on whether the working arrangement is employment or contracting.

Employees generally have PAYG withholding, super and fringe benefits tax paid by the employer. Contractors generally look after their own tax obligations.

 

If you get it wrong and fail to meet your obligations, you risk having to pay penalties and charges.

 

What factors do you need to consider?

 

There are a number of factors which need to be taken into account which help determine whether a worker could be classed as an employee or an independent contractor.

 

It is important to realise that no single factor can determine if a person is an independent contractor or an employee. To correctly determine whether a worker is an employee or contractor, you need to look at the whole working arrangement.

 

A worker isn’t automatically a contractor just because they have an ABN or specialist skills or you only need them during busy periods.

 

Courts will look at the whole relationship between the parties when determining the status of a person’s employment.

 

The Fair Work Ombudsman has produced a table of common indicators that may contribute to determining whether a person is an employee or independent contractor:

Indicator Employee Independent Contractor
Degree of control over how work is performed Performs work, under the direction and control of their employer, on an ongoing basis. Has a high level of control in how the work is done.
Hours of work Generally works standard or set hours (note: a casual employee’s hours may vary from week to week). Under agreement, decides what hours to work to complete the specific task.
Expectation of work Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period). Usually engaged for a specific task.
Risk Bears no financial risk (this is the responsibility of their employer). Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy.
Superannuation Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer. Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions).
Tools and equipment Tools and equipment are generally provided by the employer, or a tool allowance is provided. Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services).
Tax Has income tax deducted by their employer. Pays their own tax and GST to the Australian Taxation Office.
Method of payment Paid regularly (for example, weekly/fortnightly/monthly). Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project.
Leave Entitled to receive paid leave (for example, annual leave, personal/carers’ leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees. Does not receive paid leave.

 

A simple way to help tell the difference

 

The Australian Taxation Office on its website uses the following simple descriptions:

  • Employees work in your business and are part of your business.
  • Contractors run their own business and provide services to your business.

 


 

Why is the distinction important?

 

Employment relationships are regulated by specific labour protection laws and various awards and workplace agreements. These laws generally provide a higher degree of protection to employees than the general commercial laws that regulate contractor relationships.

 

This protection includes minimum conditions and standards of employment for employees including minimum entitlements for leave, public holidays, notice of termination and redundancy pay.

 

Adopt good business processes

 

Business owners need to keep records to support any decision on whether a worker is an employee or contractor and the factors relied on to make that decision.

 

Most of the information needed to support the decision can be found in a service contract for independent contractors or an employment contract for employees, which should accurately reflect the actual conditions of the working arrangement.

 

All contracts should:

  • be in writing
  • specify whether it is a contract for services or an employment contract;
  • set out the period of engagement and the remuneration;
  • include dispute resolution provisions;
  • specify if/how the relationship can be terminated.

 

Penalties

 

It is illegal for an employer to misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement or make a knowingly false statement to persuade or influence an employee to become an independent contractor.

 

Under the Fair Work Act inspectors can:

  • seek the imposition of penalties for contraventions of sham contracting arrangements.
  • apply to the courts to grant an injunction or an interim injunction if an employer seeks (or threatens) to dismiss an employee for the purpose of engaging them as an independent contractor. The purpose of the injunction would be to prevent the dismissal from occurring, or otherwise remedy the effects. Courts can also make other orders to have the employee reinstated or compensated.

 

If you need more information or if you need assistance or advice on how to proceed please call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.