The First Home Super Saver Scheme (FHSSS) measure was passed by both houses this week, after first being introduced into Parliament in September this year.
SuperConcepts general manager technical services and education Peter Burgess said despite vigorous debate in the Senate about the merits of these new measures, the bill was eventually passed by the Senate with the support of the cross benchers.
The government agreed to amend the bill to require an independent review of the operation of these measures 18 months after the bill receives Royal Assent, said Mr Burgess.
It has also agreed to amend the bill to allow individuals who suffer financial hardship to withdraw funds under the First Home Super Saver Scheme even though they may have previously owned a home.
“New regulations will be inserted and will set clear parameters around who is eligible to use the financial hardship rule,” he explained.
“The introduction of the financial hardship rule is a significant departure from the original intent of the First Home Saver Scheme which was to assist individuals to purchase their first home.”
The financial hardship rule, he explained, is designed to assist individuals who have suffered a serious financial setback, for example a relationship breakdown, “to leave the rental market and effectively start over again”.
“It appears the financial hardship rule will have it own eligibility criteria and will operate in addition to the existing severe financial hardship condition of release. Given that you must request a FHSSS determination from the ATO, and the ATO will determine the maximum amount that can be released, presumably this means the ATO will be the ones assessing whether an individual has met the criteria to have funds released under the scheme.”
Also, given that more individuals from 1 July next year will now be eligible to access some of their retirement savings early under this scheme, Mr Burgess said “it’s entirely appropriate that this measure is independently reviewed in 18 months’ time”.
Are you thinking of expanding your offering into SMSFs to grow your client base? Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Earn up to 21 CPD hours! Learn more