Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Josh Frydenberg MP)Chapter 2 First home super saver scheme maximum releasable amount
Outline of chapter
2.1 Schedule 2 to the Bill amends the TAA 1953 to increase the limit on the maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme from $30,000 to $50,000.
2.2 The amendment ensures that the First Home Super Saver Scheme continues to help first home buyers save more quickly for the purpose of purchasing or constructing their first home.
Context of amendments
2.3 The First Home Super Saver Scheme is one of several measures announced in the 2017-18 Budget as part of the Government's package of reforms to reduce pressure on housing affordability.
2.4 The First Home Super Saver Scheme helps Australians boost their savings for their first home by allowing them to make voluntary concessional and non-concessional contributions into the superannuation system and withdraw those eligible contributions and an amount of associated earnings for the purpose of purchasing or constructing their first home. Concessional tax treatment applies to the amount that is withdrawn and used for this purpose.
2.5 As part of the 2021-22 Budget measures, the Government announced on 8 May 2021 that it would increase the limit on the maximum amount of voluntary contributions made over multiple financial years from 1 July 2017 that are eligible to be released under the First Home Super Saver Scheme from $30,000 to $50,000.
2.6 This change will help first home buyers save more quickly compared to other forms of savings for their first home with the concessional tax treatment of superannuation.
Summary of new law
2.7 Schedule 2 to the Bill amends the TAA 1953 to increase the limit on the maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme from $30,000 to $50,000.
Detailed explanation of new law
2.8 Schedule 2 to the Bill amends the TAA 1953 to increase the total limit on the maximum amount of voluntary concessional and non- concessional contributions made from 1 July 2017 that are eligible to be released and used under the First Home Super Saver Scheme from $30,000 to $50,000. [Schedule 2, item 1, paragraph 138-35(1)(a) of Schedule 1 to the TAA 1953]
2.9 This amendment does not alter the limit on the amount of voluntary contributions from any one financial year that are eligible to be released (being $15,000).
2.10 The maximum amount of voluntary contributions that are eligible to be released are $15,000 per financial year and $50,000 in total. Contributions that exceed those limits are not eligible to be released. Eligible concessional contributions are discounted by 15 per cent to account for the tax that is paid by a superannuation provider as a result of receiving the contribution [Section 138-35 of Schedule 1 to the TAA 1953].
Application and transitional provisions
2.11 The amendment commences on the day after it receives Royal Assent. [Clause 2]
2.12 The amendment applies to requests made on or after 1 July 2022 for the Commissioner to make a First Home Super Saver Scheme determination. [Schedule 2, item 2, sections 138-35(1) of Schedule 1 to the TAA 1953]