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What you need to know about the Australian COVID Vaccination Policy as an expat in Australia

Making safe and effective COVID-19 vaccines available to all Australians is a key priority of the Australian, State and Territory governments. But what does this mean to expats staying in Australia?

The Australian COVID-19 Vaccination Policy (Policy) outlines the approach to providing COVID-19 vaccines in Australia. It sets out key principles, such as that COVID-19 vaccines will be made available for free to all Australian citizens, permanent residents, and most visa-holders. Further, it outlines how COVID-19 vaccines will be accessible on a rolling basis, dependent on vaccine delivery schedules and the identification of groups for most urgent vaccination.

Who is covered by this policy?

The COVID-19 vaccination will be free for all Medicare-eligible Australians and all visa-holders excluding the following:

  • excluding visa sub-classes 771 (Transit)
  • 600 (Tourist stream)
  • 651 (eVisitor)
  • 601 (Electronic Travel Authority).

In terms of preliminary priority population groups, the Australian Technical Advisory Group on Immunisation (ATAGI) identified the top three priority for the vaccination which are:

  • Those who are at increased risk of exposure and hence being infected with and transmitting SARS-CoV-2 to others at risk of severe disease or are in a setting with high transmission potential. This includes health and aged care workers; other care workers, including disability support workers; and people in other settings where the risk of virus transmission is increased, which may include quarantine workers.
  • Those who have an increased risk, relative to others, of developing severe disease or outcomes from COVID-19 including Aboriginal and Torres Strait Islander people, older people and people with underlying select medical conditions.
  • Those working in services critical to societal functioning including select essential services personnel and other key occupations required for societal functioning.

For further information about the Australian COVID-19 Vaccination Policy, you may download the Australian Government Policy here.

APRA has implemented significant changes to Income Protection Policies in Australia. How are you affected?

Income protection has been available in Australia for over 30 years and grown into a multi-billion dollar industry. Over time, due to the competitive nature of the industry, the features and benefits of income protection policies have grown to a point where claims paid are consistently exceeding premiums received making the industry unsustainable. In fact, income protection departments of Australian Life Insurers have lost approximately 4.3 billion dollars over the last 5 years.

The Australian and Prudential Regulatory Authority (APRA) has stepped in to address the situation and regulate the market to ensure it is sustainable.  The measures imposed by APRA will significantly affect income protection policies entered into after the 1st of October 2021.

Importantly, there is no requirement for legislation to pass to implement these changes. APRA already has the power to impose them. APRA has confirmed the start date of 1 October 2021for the specific changes to be implemented.

What are the changes to income protection policies in Australia?

By the 1st of October 2021, Life Insurers in Australia will offer significantly less generous income protection policies to consumers.

The key changes are:

1. The discontinuing of agreed value policies. (effective 31 March 2020)

Previously, consumers could lock away an agreed value of the monthly benefit paid at the signing of the policy. If the policyholder’s income changed down the track, they would still receive the agreed amount even though their income may have decreased. Moving forward, the monthly benefit will be based on the policyholder’s actual income at the time of claim (or, for some insurers, the best year of earnings in any three years prior) as an agreed value is no longer available.

2. They are ceasing the ability to offer guaranteed renewable policies for the life of the policy with a maximum contract period of 5 years.

From 1 October 2021, Income Protection Policies can only be for a maximum of 5 years.  After the 5 year period, a new policy must be entered into that reflects the current market terms and conditions. If a policyholder enters a new contract after the initial 5 years, medical underwriting is not required but any changes to the policyholder’s occupation, financial circumstances and dangerous occupations or pursuits or pastimes must be updated and reflected in the new policy.   Insurers are also unable to extend a current policy even if the circumstances are the same.  A new policy agreement must be entered into.

3. Limitation on the income replacement ratio available.

APRA is concerned that current excessive income replacement ratios and certain product features and benefits (particularly partial disability benefit formulas) can leave claimants in a better position financially than if they returned to full time work. Not only does this undermine the incentive for the person to return to full time work, but it may also lead to the individual paying additional premiums for cover that isn’t required.

Some examples of these policy terms and product features include:

  • excessive indexation of the income level covered
  • non-offset of income received from continued work, and
  • additional non-income related benefits, such as rehabilitation benefits and transportation benefits.

APRA has announced changes to policy contract terms which mean that from 1 October 2021:

  • benefits are capped at 90% of earnings at the time of claim for six months, and 70% after the 6 month period.
  • indexation at the level of CPI is permitted.
  • where income at risk excludes superannuation, SGC can be paid in addition to the 90%/70% cap otherwise the cap applies to income inclusive of SGC super.
  • there is no cap on monthly benefits.

4. Limiting the way in which ‘income at the time of claim’ is defined

Previously, for agreed value policies, the monthly benefit was based on the agreed value at the time of policy commencement. Moving forward, income at the time of claim will be based on your actual earnings, not agreed earnings.

For policyholders with stable incomes, pre-disability income is to be based upon income at risk at the time of claim or within the last 12 months.   For those with variable incomes, income risk is to be based on average annual earnings over a period of time appropriate for the occupation of the policyholder and reflective of future earnings lost as a result of the disability.  It seems that the flexibility would cover people on maternity or unpaid parental leave.

5. The risk associated with long-term benefit periods (such as to age 65) is effectively managed and controlled by insurers.

For policies with long benefit periods, APRA requires stricter disability definitions.  Previously, this was defined as being unable to perform your ‘normal job’.  The expectation from 1 October 2021is that a more explicit definition of disability is established as some policyholders may be able to return to employment even though it may not come under the definition of your ‘normal job’. APRA aims to reduce the number of claimants who may be able to return to some paid employment but are not as they qualify for a monthly benefit under their agreed policy. This also presents some concern that policyholders could be forced to return to work before they are ready under stricter disability definitions.

What does this mean for existing and prospective policyholders?

Existing Policyholders are not impacted by these changes. The terms of their current policies will stay as agreed at the signing of the policy.

Prospective Policyholders should consider putting income protection in place prior to 1 October 2021 to ensure their policy falls under the current (more generous) arrangements.

What’s next?

As a result of these changes, we recommend that anyone considering putting income protection insurance in place consider getting appropriate cover sooner rather than later.  The key benefits include:

  • Protection of your most valuable asset, your ability to earn an income.
  • Income protection cover is tax-deductible, which will effectively reduce the total cost of protection.
  • Your policy can also provide benefits if you are injured and unable to work for short periods providing upfront payments for injuries such as broken bones or if you are diagnosed with a disease or cancer.

The Moving Expat in a Pandemic: What changes to expect when you move to Toronto

Just as the whole world does, relocations companies in Toronto continue to adapt, innovate and work harder than ever to provide assistance to expats during the pandemic. A lot has changed, everyone has had to adjust and bid farewell to the traditional process of moving from one city to another. And moving in and out of Toronto during this pandemic is different from what the usual norm for relocation has been pre-Covid19 times.

Nitin Badhwar of Welcomehome Relocations Inc., our relocation and shipping E-team member in Toronto explains what expats moving to Canada, and specifically Toronto, should expect. 

So what has changed?

Strict implementation and compliance to health protocols have been paramount to making sure that service providers and expats alike are kept safe from the global pandemic. Information dissemination and aiding expats is now done virtually. If you are an expat who is planning to move to Toronto any time soon, expect these changes: 

1. Virtual assistance

If you are planning to move to Toronto, expect that most communication will be done through online platforms like Skype and Zoom. You will most likely meet your service providers virtually. Meetings and deals will be done through your mobile and computer screens to reduce the risk brought upon by the Covid-19 virus.

The positive in this is that it is more convenient to reach and engage with service providers before you move. Similar technologies like FaceTime and Whats App are now more commonly used in the flow of communication.

2. Online tours and viewing

Looking for property has become virtual too. No need to worry about personally traveling to Toronto to look for a house or an apartment to move into. Relocation service providers now offer neighbourhood tours and orientations via video calls. Tours of rental accommodations and available properties are now done virtually which can be convenient.

3. Destination services apps

Destination services apps have been proven to be a very useful tool in advising and informing moving expats. The need for information, especially in these difficult and stressful times, has never been more crucial. Mobility managers can now easily give you information such as the movement on housing rates and other costs of living factors, country-wide and regional protocols in place to combat this pandemic, as well as continual and timely updates on changes to the protocols as they occur. With these service apps, you can now get real-time updates.

At the time of writing this article, Quebec has already instituted a curfew, and within days the province of Ontario is expected to implement something similar. With the service apps, this information can be communicated to travelling expats immediately so that you are properly informed and can make the right decisions. 

4. Contactless grocery and shopping

If you are moving into Toronto or any part of Canada, you will be required to strictly quarantine for 14 days upon your arrival. So in addition to the aforementioned video tours and viewings, grocery shopping and delivery are now done virtually as well. This is to make sure that expats entering the country can avoid face to face interaction.

With all these adjustments, service providers continue to welcome traveling expats as they enter Canada, and ensure that you are properly and safely serviced throughout your transition. As the pandemic progresses service providers will continue to learn and come up with new and improved ways of doing things. You can expect that some of these changes will remain the norm even after the need for isolation is no longer required as they have already been proven efficient and effective. 

 

Bilanz and Le Temps Names a&o kreston As A Top Accounting & Tax Firms of Switzerland

Our Tax & Accounting  E-Team member a&o kreston has been named as one of the top accounting & tax firms of Switzerland by the renowned business journals of Bilanz and Le Temps.

Statista, an independent market research institute in Switzerland, went to great lengths to find out the country’s best accounting and tax advisors. Several thousand members of the industry and customers in the field of accounting and tax services took part in Statista’s research with a&o kreston coming on top. 

“We are very pleased to be recognised by these renowned business journals,” commented Rouven Williman of a&o Kreston, Group Leader of our Zurich E-Team, “especially in a year like this with so much uncertainty, providing surety to our clients with their tax affairs gives them peace of mind.”

 

Propertybuyer Wins Buyers’ Agency of the Year 2020 Award

Our Property E-team member from our Sydney E-Team , Propertybuyer, was named as the Buyers’ Agency of the Year 2020 in this year’s REINSW Awards for Excellence.

“We are very proud to have won this award,” stated Rich Harvey, CEO & Founder of Propertybuyer.

Propertybuyer stood out among this year’s finalists as a provider to best represent property investors in purchasing residential and commercial real estate.

“Buyers’ Agents are rapidly growing in popularity as more buyers realise the benefits of independent and professional representation,” Rich said.

Alongside the Buyers’ Agency of the Year category, Propertybuyer was also a finalist for the Operational Support of the Year 2020.

Having a buyer’s agent on your side who can guide you throughout the entire buying process is what Propertybuyer does best. They offer quality advice on a property purchase to a range of clients including professional executives, first time home buyers, experienced investors, commercial buyers or even developers.

“It gives our clients the reassurance that they are making the right choice when looking for a property,” commented Rich.

Clients have praised Propertybuyer for the work they do and the services they offer. Buyers have commended how Rich and his team have helped them with their best interest at heart and their genuine interest in finding the most suitable property.

Update on Australia’s Travel Restrictions

The global pandemic has affected workers from all over the world. Australia, like other nations, have implemented strict regulations on the travel of foreign nationals into their country. 

Exemptions on Australia’s Travel Ban 

In the latest amendment in Australia’s travel ban, the Border Force Commissioner has been given authority to approve travel in compelling and compassionate situations. 

If your work involves critical infrastructure projects, and health and essential services, then there is a chance that you would be approved to travel to Australia. 

If you have a split family or if you’re a temporary visa holder with a prior established residence in Australia and was caught offshore by the travel restrictions You may be included in the travel ban exemptions.

The list of exemptions has been gradually expanded since the initial lockdown in March. The current list of exemptions includes:

  • travelling at the invitation of the Australian Government or a state or territory government authority for the purpose of assisting in the COVID-19 response
  • providing critical or specialist medical services, including air ambulance, medical evacuations, and delivering critical medical supplies
  • person with critical skills or working in a critical sector in Australia
  • person sponsored by an employer to work in Australia in an occupation on the Priority Migration Skilled Occupation List (PMSOL).  
  • entry would otherwise be in the national interest, supported by the Australian Government or a state or territory government authority
  • military personnel, including those who form part of the Status of Forces Agreement, Commonwealth Armed Forces, Asia Pacific Forces and Status of Armed Forces Agreement
  • a student completing year 11 and 12, with support from the relevant Australian State or Territory government health authority and education department
  • travelling for compassionate and compelling reasons.

Priority Migration Skilled Occupation List

The Priority Migration Skilled Occupation List categorizes the 17 occupations that provide the critical skills needed to help the recovery of Australia’s economy from the COVID-19 impact. Here are the occupations included in the PMSOL list:

  • Chief Executive or Managing Director 
  • Construction Project Manager 
  • Mechanical Engineer 
  •  General Practitioner
  •  Resident Medical Officer 
  • Psychiatrist 
  •  Medical Practitioner nec 
  • Midwife
  • Registered Nurse
  • Developer Programmer 
  • Software Engineer 
  • Maintenance Planner

Visa applications for other occupations will still be processed but those that fall under the PMSOL list will be given priority. Under continuous monitoring of the labour market and the development of required skill to recover from the COVID-19 impact, the Government and National Skills Commission may change and update the list.

What is a critical skill?

If your skillset covers the following, then it is considered as a critical skill:

  • travelling at the invitation of the Australian Government or a state or territory government authority for the purpose of assisting in the COVID-19 response
  • providing critical or specialist medical services, including air ambulance, medical evacuations, and delivering critical medical supplies
  • with critical skills required to maintain the supply of essential goods and services (such as in medical technology, critical infrastructure, telecommunications, engineering and mining, supply chain logistics, aged care, agriculture, primary industry, food production, and the maritime industry)
  • delivering services in sectors critical to Australia’s economic recovery (such as financial technology, large scale manufacturing, film, media and television production and emerging technology), where no Australian worker is available
  • providing critical skills in religious or theology fields
  • sponsored by your employer to work in Australia in an occupation on the PMSOL
  • whose entry would otherwise be in Australia’s national interest, supported by the Australian Government or a state or territory government authority.

You can request for an exemption through the Commissioner’s Discretion – your request must be accompanied by the following:

  • Passenger details: name, DOB, visa type and number, passport number, Australian residential address, Australian telephone number)
  • Case information: why this case should be considered for Commissioner discretion/exemption
  • Supporting statement: the request should be accompanied by a statement and evidence of how you meet one of the grounds for an exemption or excise of the Commissioner’s discretion listed above.

One important thing that you should take note of is that all travellers are required to provide evidence to immigration that you meet one of the exemptions mentioned before travelling. 

How businesses are affected by the travel ban

If you are running a business in Australia and want to employ an expat, they must have a valid Australian visa and an approved waiver of the travel ban. But there is no guarantee that the application to travel will be approved as the decision is subjective and there are approximately 20,000-25,000 applications each week. The chances of approval are very minimal so it is advisable to seek out a person who can work remotely rather than having to apply to travel to Australia. 

Why Expats Should Invest in Australian Property Now

Earlier this month, Westpac, St George, and Macquarie banks reduced the serviceability floor rate for home loans from 5.35% p.a. to 5.05% p.a., meaning an increase of borrowing capacity and an opportunity for expat investors and home buyers.

The decrease to serviceability floor rates comes off the back of announcements made by Philip Lowe of the Royal Bank of Australia (RBA) in May this year and an ongoing trend toward reduction amid growing recession and pandemic woes.

In Gareth Hutchens’ article, published on 28 May, by ABC news online, Lowe claimed that interest rates would likely remain at 0.25 percent for years – until the unemployment rate was back to around 4.5 percent.

‘We’re not going to be raising interest rates until full employment is in, and we’re sustainably within the 2-3 percent target range for inflation,’ he said. ‘I think it’s reasonable to expect that that will not be for some years.’

By dropping their floor rate to 5.05%, the Westpac group reflects the low rate environment we are currently in and proves to customers that they want their business, so they borrow more.

Thus, the other big banks will likely follow this trend (Westpac’s new 5.05% rate comes in below ANZ’s 5.25%, CBA’s 5.40%, and NAB’s 5.50%), and if they do, borderline customers across major lenders will have more chance of loan approval and help the economic downturn shift back.

What this means for expat investors

Reductions to rates are good for Australian-based home buyers but are even better for international purchases and the expat community.

When you apply for a home loan, the lender assesses all your loans, new and existing, at rates much higher than the actual rate you pay. Government regulator, Australian Prudential Regulation Authority (APRA), requires banks to ensure their customers can repay loans at 2.5% more than current interest rates, or the ‘floor’ rate set by the bank, whichever is higher. They call this the earthquake test, and it is there to ensure that if interest rates rise, you can still service your loans.

Over the last few years, interest rates have decreased, but the serviceability floor rate had not moved. Given the pandemic and unexpected recession-era we are now facing, rates will not increase soon. The government wants people to borrow money to buy properties and help prop up the economy.  Last year, floor rates dropped to 7%, meaning customers could borrow more based on cashflow and mortgage repayments; however, they couldn’t borrow more money on paper even though their real-life affordability had improved.

Because expats have additional borrowing capacity restrictions, banks will assess 60% to 80% of actual income to account for foreign exchange risk. The benefits of investing now in a recession-like market are paramount, as the decrease to 5.05% means for some Australian expats (permanent residents living overseas), the borrowing capacity increases by up to 15-20%.

And if you are only borrowing 60% of the property value, some banks will give you a very low-interest rate; for example, Macquarie Bank’s current variable investor rate is 2.69% p.a.

While we expect this trend to last some time, the rate reduction is excellent news for Australians living overseas who’d like to invest now. As the Expatland mortgage partner, Stoneturn is well placed to assist you with enquiries about the changes.

If you are an Australian expat who would like to review a current loan or explore new mortgage options, please get in touch with Stoneturn today.

Key Things You Need To Know When Doing Business In The UK

There are many things you need to consider when doing business in the UK, may it be starting a new company or expanding your current business.

Some of the things you have to consider include:

  • Visa & Immigration – options available to you in obtaining a visa for yourself and any employees you may want to relocate to the UK
  • Relocations – what you need to consider when relocating yourself and/or your employees
  • Tax Planning – to understand the UK tax system and what you need to do before and after you commence doing business in the UK.

Join industry experts from our London E-team in this webinar where they explain the important points you must consider when doing business in the UK.

Watch the recording of the webinar now.

 

What You Need To Consider Before Returning Home To The UK

Due to the current international state of affairs, with economic uncertainty and increased travel restrictions, many expats living abroad are considering a return home to the UK.

We recently hosted a webinar during which our London E-Team provided valuable insights into how a UK expat should navigate this return home.

Topics covered in this webinar included:

  • relocating,
  • property and education considerations,
  • tax matters,
  • financial planning,
  • pet relocation.

With presentations from our hosts Phil Oakey from Gerson Relocations, Charlotte Firth from James Cowper Kreston, Sasan Lohrsab from Frontier Wealth Management and Nick Foden-Ellis from Starwood Animal Transport, you’ll feel equipped to make the move back home well informed and free from concern.

Watch the recording of the webinar now.

 

Covid-19 impact on the UK: an expat perspective

It’s become clear for some time now, that as well as the short-term impacts that Covid-19 has had on countries worldwide, there will be many long-lasting impacts, the likes of which we have yet to fully understand.

The devastating effects that this virus has had on people’s health has been felt the world over, however each country has been impacted in different ways when it comes to the economic and social consequences of this global pandemic.

In this article, our E-Team Group Leaders in London, Phil Oakley from Gerson Relocation and Ian Miles from James Cowper Kreston, have given us some insights into what they believe are the short, medium and long term effects that Covid-19 will have or has had on the UK.

Short Term

“The UK has seen a dramatic fall in its GDP since the start of the lockdown with the travel and financial markets adversely affected,” Phil Oakley tells us, which has already created adverse short-term effects.

Most importantly, the drop in economic output has meant that “there has also been a large rise in unemployment due to businesses either looking to cut costs or not being able to sustain business,” explains Phil.

Ian Miles gives us an insight into some of the main industries that are struggling in the UK right now, mainly “the travel and hospitality industries, pubs and restaurants, and of course, the Arts.” For the people working in these industries, there is an uncertainty in regard to how long Government support will last, and what they are going to do when it ends. This unemployment that has been on the rise is set to remain high, as many businesses have been forced to close down permanently or downsize.

The UK’s expat community is not immune to this rise in unemployment. Phil tells us that during this pandemic, many expats living and working in the UK have had to return back to their home countries, which has led to a rise in cancelled assignments. The UK’s economic downturn has also meant that there has been a drop in the number of global assignments available in the financial services sector.

One sector of the UK economy which has led to a rise in both “recruitment and mobility”, according to Phil, is the Pharmaceutical industry, due to an increase in Research and Development. However, this is one of a very few industries that is not struggling to ensure job security.

In addition to the clear economic ramifications that Covid-19 has been having in the short term, it has also had an impact on many people’s family lives. While some people have embraced the ‘Work from Home’ philosophy, others are struggling to multitask working from home, with home-schooling their children.
Furthermore, with schools trying to re-open safely, it is difficult when expats need to continue travelling for work. Ian poses the questions, “If an employee goes on a short-term foreign business trip, will the individual be able to get back? If they can, will they then need to self-isolate together with their family for 14 days?” The concern here is whether this self-isolation could prejudice children trying to return to school.

Medium Term/Long Term

In the medium to long term, people will start to adjust to the restrictive environment even when the rules are removed. The most evident area we will see this is in the workplace.

As people in the UK begin to adjust to working with restrictions in place, Ian predicts that there will be an increased reliance on technology, in particular the use of video calling and meetings. “Meetings seem to take half the time that face to face meetings take,” he observes. These new adjustments will include a decrease in travelling for work, as businesses adapt to the “new normal”, with travel restrictions still heavily enforced in the UK.

In terms of the long-term success of the UK economy, both Ian and Phil agree that it’s almost impossible to predict how long the recovery process will take. This recovery is dependent on the length of time social distancing is going to be in place for, as well as potential spikes in Covid-19 outbreaks leading to the need for future lockdowns.