New data shows that 1,449 requests to the Australian Taxation Office (ATO) were made between 1 July and 6 August by first home buyers (FHBs) looking to find out how much of their superannuation they can withdraw under the First Home Super Saver Scheme (FHSSS), which came into effect at the start of the 2018–19 financial year.
The scheme, which was legislated in December 2017, allows FHBs to contribute up to $30,000 (but no more than $15,000 per financial year) to their superannuation account, with FHB couples eligible to contribute up to $60,000. They can then access their tax-exempt voluntary superannuation contributions to cover their deposit for a new home, starting with contributions made during the 2017–18 financial year onwards.
The aim of the scheme is to “accelerate” deposit saving by up to 30 per cent.
Of the 1,449 requests made to the tax office, 592 individuals went on to apply for superannuation funds to be released, though the ATO authorised 498.
It has revealed that these release authorities to super funds totalled $5,341,856, equating to an average requested release amount of about $10,727.
Special counsel at SUPERCentral Michael Hallinan described the uptake of the scheme “surprising”, explaining that “there would seem to have been too little time for a material amount of eligible contributions to have been made and only one year’s worth of earnings accrued to make a release worthwhile”.
He was also surprised because the FHSSS can only be accessed once.
“While an individual can make any number of requests for FHSSS determinations (these are simply a determination by the ATO of how much an individual can access), they can only make one request for a FHSSS release authority,” Mr Hallinan said.
“If the authority is issued, then the individual can no longer request another release authority even if they continue to make voluntary super contributions or did not use the released amount.”
A study earlier this year by Gateway Bank that involved a survey of 1,000 Australians found that 56 per cent were unaware of the initiative, and of the respondents that were aware of the FHSSS, only 1 per cent could directly identify its components.
Baby Boomers were found to be most aware of the scheme (36 per cent), followed by Millennials (34 per cent) and Generation X (30 per cent).
Gateway Bank CEO Paul Thomas suggested in May that the government needs to better educate the public about the FHSSS.
“The scheme is a good idea in principle, but in order to make a real impact, the government and [the] industry need to take action to ensure the public is not only aware of the scheme but are also educated on how they can take practical steps to take advantage of the initiative,” the CEO said at the time.
“It’s imperative to take an early intervention approach to education around the initiative; otherwise, by the time first home buyers look into their first mortgage, it will be too late.”
[Related: Government failing to assist FHBs, says bank]