First Home Super Saver Scheme – Overview

From

Michael Hallinan

Under the First Home Super Saver Scheme (FHSS Scheme), eligible super members who make voluntary superannuation contributions can subsequently withdraw those contributions (and associated earnings) from the super system in order to acquire their first home.  The withdrawn contributions and associated earnings is the FHSS release amount.

While the FHSS release amount, when paid, will be liable to tax, the net amount can be used to acquire a residential home – either as part of the deposit or as part of the balance due on settlement.  The FHSS release amount cannot be used to furnish the home or for any other purpose such as acquiring an investment property or to repay debt.

The FHSS release amount must be used by the super member to acquire the first home within 12 months (or 24 months, if the ATO permits).  To the extent the FHSS release amount is not used within the required time to acquire the first home, the super member must either repay the unused portion back into super or pay a special tax on the unused amount.

The super member can request the ATO to make a determination of their current FHSS release amount.  This determination simply provides the super member with the dollar value of their FHSS release amount.  The super member need not act upon determination.  The super member acts upon the determination by requesting the ATO to issue a FHSS release authority (i.e. an authority issued by the ATO which permits a trustee of a super fund to pay all or part of the specified amount).

It is important to remember that if a super member acts upon a FHSS determination and the ATO issues a FHSS release authority, the ATO cannot issue a subsequent FHSS release authority.  In short, the system is a once-only use system.

The FHSS Scheme commences on 1 July 2018 (being the date on and from which a FHSS determination can be requested from the ATO).  However, voluntary superannuation contributions made since 1 July 2017 are counted when determining the member’s FHSS release amount.

By Michael Hallinan, Special Counsel Superannuation

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