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FHSS legislation passes to address scheme’s pain points
The government has passed legislation improving the efficiency of the First Home Super Saver Scheme (FHSS).
The scheme allows first home buyers to make voluntary contributions to their super and release these savings, with associated earnings, for a home deposit.
Under the Treasury Laws Amendment (2023 Measures No.3) Bill, schedule 4 of the bill, which passed both houses last week, will bring about changes to the FHSS to ensure it works better for first home buyers.
According to the Australian Taxation Office, some $415 million has been accessed since the scheme’s implementation.
Minister for Financial Services, Stephen Jones, said: “We are giving young Australians more time to access funds to compete their house purchase by extending the time frame to request a release of savings (after entering into a contract) from 14 days to 90 days.
“Under the former government’s scheme, Australians were promised support to buy a home but were left stranded and disappointed. For around 4,000 Australians, this has left them unable to buy a home through the FHSSS.
“The changes will also apply to eligible individuals who applied from 1 July 2018, which will help Australians who engaged in the scheme in good faith, finally access the money they saved to purchase their first home.”
Proposed changes included:
- Increasing the discretion of the Commissioner of Taxation to amend and revoke applications to have funds released under the First Home Super Saver Scheme
- Allowing individuals to do the same without being prevented from reapplying in the future
- Allowing up to 90 days, instead of 14 currently, for individuals to request a release authority after they enter into a contract to purchase or construct a home
- Allowing the Commissioner of Taxation to return any FHSS Scheme amounts to superannuation funds, provided the amount has not yet been released to the individual
- Clarifying that FHSS Scheme amounts returned by the Commissioner of Taxation to superannuation funds are treated as funds’ non-assessable non-exempt income and do not count towards individuals’ contribution caps
- Special transitional provisions that extend the flexibility to eligible users who had previously applied unsuccessfully and had since started holding a relevant interest in real property or land.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
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