At the beginning of February 2022, the Australian Government passed The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021.
The aim of the Bill is to increase flexibility for individuals preparing for retirement, increase superannuation support for low income earners and provide assistance to first home buyers.
Update to First Home Super Saver Scheme (FHSSS)
The First Home Super Saver Scheme (FHSSS) has been introduced as a way to use additional contributions made to your superannuation fund (over and above standard Employer Superannuation Guarantee Contributions) towards purchasing your first home. The amendment to the scheme will assist first home buyers save faster for the purpose of purchasing or constructing their first home.
Depending on your circumstances, this can provide great opportunities to build up your deposit compared to a standard savings account due to;
- Tax concessions on certain superannuation contributions, along with favourable tax treatment on the subsequent withdrawal of funds.
- FHSSS eligible withdrawable funds will increase based on a notional earnings rate – meaning the balance you can potentially withdraw will continue to grow even if your superannuation investments aren’t.
Currently, an individual can release a maximum amount of $30,000 in eligible voluntary contributions. As of 1 July 2022, this amount will be increasing to $50,000.
There is a lot of complexity around the FHSSS including eligibility criteria, strict conditions around the process and the timing of releasing eligible funds.
The introduction of these changes will present significant planning opportunities to grow your superannuation.
If you wish to discuss further, please speak to your adviser, or arrange a Discovery Meeting with our team to discover if and how you could potentially benefit from the First Home Super Saver Scheme.