Getting money into super
Contributions for First Home Super Saver Scheme
Individuals can have voluntary contributions made on or after 1 July 2017 released (subject to limits), along with an amount of associated earnings, for the purpose of buying their first home under the First Home Super Saver (FHSS) Scheme.
The following types of voluntary superannuation contributions qualify to be released under the FHSS Scheme:
- Personal non-concessional contributions
- Personal concessional contributions
- Salary sacrifice arrangements entered into with a person's employer (or other non-mandated employer contributions).
It's important to note that mandated employer contributions (which include superannuation guarantee or contributions required by an industrial award), contributions required by legislation or fund rules, spouse contributions, child contributions, structured settlements and small business CGT contributions do not qualify.
Also, any type of contributions made to a constitutionally protected fund (CPF) or defined benefit interest are not eligible for release under the FHSS Scheme.
Sometimes an employer uses an employee's salary sacrifice contributions to offset their superannuation guarantee obligations.
In this case, salary sacrifice contributions cannot be released under the FHSS scheme as only amounts that do not reduce the employer's SG obligations may be released.
Danny is a member of a super fund that requires members to make a minimum non-concessional contribution of 2 percent of their after-tax salary, which must be matched by their employer. If Danny makes non-concessional contributions over 2 percent, his employer will match the contributions up to a maximum of 5 percent of his after-tax salary.
Danny is on an annual after-tax salary of $100,000 and is contributing 5 percent of his salary ($5,000) as a non-concessional contribution.
Under the FHSS scheme, $2,000 of his non-concessional contributions are not eligible to be released as these contributions are required to be made by the rules of the superannuation fund.
However, voluntary contributions of $3,000 are eligible to be released.
The maximum amount of concessional and non-concessional contributions that may be eligible contributions for the FHSS Scheme is limited to:
- $15,000 of voluntary concessional and non-concessional contributions per financial year (beginning 1 July 2017) and
- $30,000 of voluntary concessional and non-concessional contributions in total.
Contributions made under the FHSS scheme are subject to standard contributions caps (ie $25,000 pa concessional cap and $100,000 pa non-concessional cap).
To avoid double-counting, excess concessional contributions are disregarded in working out an individual's non-concessional contributions for FHSS Scheme purposes.
When making contributions, the individual does not need to notify the superannuation fund or the ATO that contributions are being made for the purpose of the FHSS scheme.
Last modified: Tuesday, July 23, 2019