With much controversial discussion surrounding the First Home Super Saver Scheme, understanding exactly what the Scheme entails is necessary.
The scheme was announced in the 2017-18 Federal Budget as a means to reduce the pressure surrounding housing affordability across Australia.
The formalities of the scheme are as follows:
As of 1 July 2017, individuals can make voluntary contributions, both concessional and non-concessional, into their super fund. As of 1 July 2018, individuals can release these contributions, as well as their associated earnings, and use this money to help purchase their first home. Individuals eligible for this scheme are able to use up to $15,000 per financial year, with a total maximum of $30,000 for all years you have earned super.
To be eligible for the First Home Super Saver Scheme, individuals must meet the following criteria:
Must be at least 18 years of age.
Must not have previously owned property in Australia, or have previously released First Home Super Saver funds.
Must have the intend to live in the property you use the funds to purchase as soon as practicable, for at least the first 6 of the 12 months of owning the property.
When it comes to protecting your nest egg, avoid getting caught out by a promoter of an illegal early release super scheme.
Early release super scheme scams will involve a promoter contacting you and offering to help you access your super early. They usually target individuals under significant financial pressure or those who are not knowledgeable about super laws and the repercussions and penalties involved in illegally accessing your super.
You can only access your super when you meet a condition of release.
Generally, when you:
– Are 65 years old (even if you have not yet retired).
– Reach your preservation age and retire.
– Reach your preservation age and begin a transition to retirement income stream while still working.
There are special circumstances where you may be able to access your super early.
These special circumstances include:
– Severe financial hardship
– Temporary or permanent incapacity
– Compassionate grounds
– Temporary residents leaving Australia
– Super death benefits (inheriting super)
– Super less than $200
– Terminal medical condition
To avoid falling for an illegal early super release scam, be wary if the promoter:
– charges high fees and commissions;
– requests identity documents;
– claims you can access your super and put the funds towards whatever you wish;
– and tries to persuade you to transfer or rollover your super from your existing fund to a self-managed super fund (SMSF) in order to access your super before you are legally entitled.
