First home buyers benefit from amended Super Saver Scheme
In brief
- Applies from 1 July 2022
- The cap on the amount of contributions which can participate in the First Home Super Saver Scheme (FHSS Scheme) will be $50,000 (currently the cap is $30,000)
- Contributions eligible to participate in the FHSS Scheme are voluntary concessional and non-concessional contributions made on or after 1 July 2017
- Current limit of $15,000 of eligible contributions per year continues to apply
- Will benefit individuals who are able to make additional voluntary super contributions
- $50,000 cap on contributions eligible to participate only applies to an individual if they have made no withdrawals under the FHSS Scheme before 1 July 2022.
- ATO determines the maximum releasable amount which is equal to the sum of:
- 85% of eligible deductible contributions;
- 100% eligible non-deductible contributions; and
- associated earnings on those contributions
Now the details
Currently, the FHSS Scheme operates on the basis that the total amount of contributions eligible to participate in the Scheme is $30,000. Further only eligible contributions made on or after 1 July 2017 can participate in the Scheme. In general, eligible contributions are personal contributions (whether deductible or non-deductible) an individual has made.
For this purpose salary sacrifice contributions are considered to be personal deductible contributions. Generally employer (other than salary sacrifice) and third-party contributions are not eligible to participate in the Scheme.
Only the first $15,000 of eligible contributions in a financial year are counted for the purposes of the Scheme.
While an individual can, from time to time (subject to some limits) request the ATO to issue a determination as to the current value of the maximum releasable amount, once the individual requested the ATO to authorise the release of funds pursuant to the determination, no further determinations or releases can be made.
Now the nerdy stuff
The change will be effected by amending paragraph 139-35(1)(a) in Schedule 1 of the Taxation Administration Act 1953 by substituting $50,000 for $30,000. The change is achieved by Schedule 2 to the Amendment Act.
For further information, please call Townsends Business & Corporate Lawyers on 02 8296 6222 or email info@townsendslaw.com.au