Government touts First Home Super Saver Scheme but hasn’t legislated it

The Government is touting it’s First Home Super Saver Scheme, which is meant to apply to contributions from 1 July 2017, despite not passing the required legislation.

Michael Sukkar, the Assistant Minister to the Treasurer, said the Government is continuing to deliver on the housing affordability package from the 2016 Budget – which includes the First Home Super Saver Scheme (FHSSS).

Mr Sukkar said the scheme comes into effect from 1 July. It is meant to apply to contributions from 1 July 2017, with withdrawals allowed from 1 July 2018.

However the legislation to enact the FHSSS has not been passed, or even introduced to the Parliament.

There are also questions over if the FHSSS legislation would pass. Labor has already said it would oppose the measure and representatives of the superannuation industry are advising caution until it is legislated.

Treasurer Scott Morrison reportedly plans to introduce the FHSSS legislation in the Spring sitting of Parliament, which starts on August 8.

“We are implementing a comprehensive plan that will improve outcomes across the housing spectrum – from first home buyers and older Australians looking to downsize, to the homeless and those who depend on social housing,” said Mr Sukkar.

“We are allowing first home buyers to contribute up to $15,000 per year in voluntary contributions, up to $30,000 in total that can be withdrawn for a deposit. Withdrawals will be allowed from 1 July 2018. Couples will be able to both access the scheme and combine savings for a single deposit. Contributions and earnings will be taxed at only 15 per cent rather than marginal tax rates and withdrawals taxed at marginal tax rates less a 30 per cent offset. Contributions must be made from within existing caps.”

Update: The Treasurer was asked in a press conference if he was confident the FHSSS would pass the Parliament, answering “yes”.

Asked if there was a plan B for housing affordability if the measure was blocked, Treasurer Morrison said he was “very confident” the Senate would pass the FHSSS and asked why Labor was doing what the “big union funds” wanted:

Plan A is the one that is going to work because people saving for their first home, we are giving them a tax cut on their savings, which means which means they can accelerate their path to a first home 30 per cent faster. Why would the Labor Party want to vote against that? But they are. I am very confident that the Senate will see the wisdom of this and they won’t want to deny first home buyers out there right now, wanting to save their own money that tax cut. Labor is denying first home savers a tax cut which will get them 30 per cent quicker to owning their own home. That just seems mean and I don’t know why they are allowing the big union funds to pull their chain on this but that is certainly what is happening.

Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?

This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.

Leave a Reply

Your email address will not be published. Required fields are marked *