Parliament has given the green light to the amendments to several laws involving superannuation, providing more assistance to first-home buyers and downsizers in the current market conditions.
The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 amends several laws, one of which is the Taxation Administration Act 1953.
During the second reading of the bill late last year, Assistant Treasurer and Housing Minister Michael Sukkar said this amendment will increase the limit on the maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme (FHSSS), from $30,000 to $50,000.
“This increase recognises that deposit requirements have increased with house price growth over recent years and this change will help first home buyers to save a deposit more quickly,” Mr Sukkar said.
The FHSSS allows homebuyers to save money for their first home inside their super fund, taking advantage of the concessional tax treatment of superannuation.
A maximum of $15,000 of voluntary contributions from any one financial year can be included, up to a total of $50,000 across all years.
All earnings related to the contributions will be granted to the eligible applicant.
Another amendment that recently passed Parliament was to the Income Tax Assessment Act 1997, which would enable individuals aged 60 and above to make downsizer contributions to their superannuation plan from the proceeds of selling their home.
“It will improve flexibility for older Australians to contribute to their superannuation savings,” Mr Sukkar said.
“This may encourage more older Australians to downsize to homes that better meet their needs, ultimately increasing the supply of larger homes for young families.”
Meanwhile, the bill also amends the Superannuation Guarantee (Administration) Act 1992, removing the exemption of employers to pay the superannuation guarantee if their employee's earnings are less than $450 in a calendar month.
The exemption was put in place to reduce the administrative burden on employers.
However, Mr Sukkar said significant technological advancements and other superannuation reforms have already diminished the burden.
“The removal of this threshold will improve equity in the superannuation system and increase the retirement savings of around 300,000 low-income workers employed in casual or part-time roles, around two-thirds of which are women,” Mr Sukkar said.
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Photo by @tierramallorca on Unsplash
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