Superannuation community

The payer needs to withhold from a compensation, sickness or accident payment to an individual if it is both:

• Made because of that individual’s or another person’s incapacity for paid work
• And calculated at a periodical rate.

Withholding does not apply if the payment is made by the insurer to the owner of the policy. The owner of the policy would need to declare this income in their return.

Scenario 1: The life insured was assessed disabled and the payment was supposed to be released to him but then a court order was issued where the 30% of income protection claim was to be paid to the spouse. Question is, who is liable for tax payment spouse or the life insured and what portion.

If there is withholding it is withheld from the gross amount before the payment is distributed to the spouse. If it is paid to the policy owner then they would need to include the whole amount in their tax return.

Scenario 2: The life insured was assessed disabled and the payment was supposed to be released to him but then a court order was issued where the 30% of income protection claim was to be paid to the child support agency (on behalf of a dependent child). Question is, who is liable for tax payment the life insured and what portion. The child support agency is an entity and hence should not be withhold but is the total amount should be withhold as life insured income?

If there is withholding it is always withheld from the gross amount before the distributed to the child support agency. If it is paid to the policy owner then they would need to include the whole amount in their tax return.

Scenario 3: The life insured was assessed disabled and the payment was supposed to be released to him but he asked the life insurance company to transfer 30% of the claim amount to spouse's account. There was no court order or legal requirement. Question is, who is liable for tax payment spouse or the life insured and what portion.

If there is withholding it is always withheld from the gross amount before the distributed to the spouse. If it is paid to the policy owner then they would need to include the whole amount in their tax return.

This law lapsed due to the 2019 Federal Election as such it will need to be reintroduced to parliament, so SMSF membership limit is still four.

You are correct in noting that there has been a recent law change to the FHSS scheme which comes into effect on 1 July 2019. These changes apply retrospectively to valid FHSS release requests and contracts entered into on or after 1 July 2018.

The requirement to have applied for and received a FHSS determination from us before signing a contract for your first home has not changed. What has changed is that you are now able to sign a contract to purchase or construct your home up to 14 days before you make a valid request to release your FHSS amounts.

The LCR 2018/5 has not been updated because the requirement to have a determination before signing a contract has not changed. When a person requests a determination they are asked whether they currently hold an interest in real property.

Subsections 138‑10(2A) and (2B) of the Taxation Administration Act 1953 (TAA 1953) provides that to be eligible for the FHSS scheme you must have never held a stipulated property in Australia (unless specific financial hardship requirements are met).

Subsection 138‑10(2) of the TAA 1953 is the provision which states that a person is able to apply for a determination if they are eligible under the FHSS scheme. Once the determination has been issued by us, it follows that the release process is the next step.

When you apply for a FHSS determination online using your myGov account linked to the ATO, you will receive confirmation of the maximum releasable amount on the screen immediately after your determination request is submitted. A few days later, you will also receive your FHSS determination (advising the maximum releasable amount) either via your myGov mail box or post.

The assessable FHSS released amount shown on the FHSS payment summary is net of contributions tax. For example, if the original contribution was a concessional contribution e.g. salary sacrifice of $10,000, the assessable FHSS released amount would be $8,500 ($10,000 x 85%) plus associated earnings.

The FHSS payment summary will show the assessable FHSS release amount paid to you. The total tax withheld from these amounts will also be displayed on the payment summary.

Both these amounts must be included in your tax return for the year the FHSS release was requested (this may not be the same financial year in which the FHSS amounts are received).

You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:

• you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
• the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
• your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
• your home is in Australia and is not a caravan, houseboat or other mobile home
• the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
• you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
• you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
• you have not previously made a downsizer contribution to your super from the sale of another home.

The 10-year ownership test

There is no exemption to the 10-year ownership test. You or your spouse, or former spouse, must have held an ownership interest in the home, or ownership interest in the land on which the home is situated at all times during the 10 years prior to the disposal.

This is from the day the ownership interest in the home commenced to the day it ceased. In most cases, this would be from the settlement date of the original purchase to the settlement date of the sale.

You are not required to hold an ownership interest for the entire 10-year period personally, provided that, at all times during this period, an ownership interest has been held by some combination of you, your spouse, and/or your former spouse. This allows for changes in ownership between spouses to account for circumstances such as the death of a spouse and relationship breakdown.

If your spouse who held an ownership interest dies, you can count the period of ownership of your deceased spouse, including the period the dwelling is held by the trustee of the deceased estate, towards the 10-year ownership test.

If there is a period of time when land is vacant, and you hold the ownership interest in the land, this will still count towards the 10-year ownership test. This means that eligibility can be extended to circumstances such as where the dwelling has been knocked down and rebuilt or a vacant block was initially purchased and subsequently built on.

If you are going to rely on having held an ownership interest in the land to satisfy this condition, you or your spouse must generally have held the interest directly, not through another entity, such as a trust or company. In these situations we recommend you seek advice specific to your circumstances prior to making a contribution.

If you are applying to pay for medical treatment expenses you must provide two - separate reports. One must be from a registered medical specialist and the other can be from either a registered medical practitioner or a registered medical specialist or dentist, advising that you require treatment for:

• a life threatening illness or injury
• acute or chronic pain
• an acute or chronic mental illness.

The registered medical specialist must be specialised in the field of treatment.

For more information about eligible and documentation required, go to Early access to your super or you can call us on 131020.

If you are applying for compassionate release of super due to mortgage foreclosure, you will need to provide documented evidence that the bank/lender is planning to sell your home. Without this evidence, we are unable to assess an application.

However, you can submit an application with the evidence that you do have for assessment.

For more information go to Early access to your super or you can call us on 131020 to speak to one of our experience staff who will be able to assist you further.

If you are applying for compassionate release of super due to mortgage foreclosure, you will need to provide documented evidence that the bank/lender is planning to sell your home.

Without this evidence, we are unable to assess an application.

However, you can submit an application with the evidence that you do have for assessment.

For more information go to Early access to your super or you can call us on 131020 to speak to one of our experience staff who will be able to assist you further.

We are unable to use a default notice as evidence unless the notice states that the bank is going to sell your home.  

For more information go to Early access to your super or you can call us on 131020 to speak to one of our experience staff who will be able to assist you.

Before you apply, check with your superannuation fund whether they allow the early release of super.

If your application has been approved, you must contact your super fund to arrange release of your money. You will need to provide the super fund with a copy of the approval letter to process your payment. Your fund can advise how long it will take for the money to be released into your bank account.

Remember, you must pay the expenses with the amount released from the fund and keep your receipts as evidence.

For more information go to Early access to your super or callus on 131020.

The definition of Ordinary Time Earnings (OTE) for Superannuation Guarantee (SG) purposes, is the remuneration paid to the employee as a reward for the employee's services.

Subsection 6(1) of the SGAA defines OTE in relation to an employee to mean:

(a) the total of:

(i) earnings in respect of ordinary hours of work other than earnings consisting of a lump sum payment of any of the following kinds made to the employee on the termination of his or her employment:

(A) a payment in lieu of unused sick leave;

(B) an unused annual leave payment, or unused long service leave payment, within the meaning of the Income Tax Assessment Act 1997;

(ii) earnings consisting of over-award payment, shift loading or commission; or

(b) If the total ascertained in accordance with paragraph (a) would be greater than the maximum contribution base for the quarter – the maximum contribution base.

The Commissioner’s views on OTE generally, including an employee’s ‘ordinary hours of work’ are included in Superannuation Guarantee Ruling SGR 2009/2 Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'.

SGR 2009/2 explains that an employee's ‘ordinary hours of work’ are the hours specified as ordinary hours of work under the relevant award or agreement that governs the employee's conditions of employment. It also highlights that any hours worked in excess of, or outside the span of those specified ordinary hours of work are not part of the employee's ‘ordinary hours of work’.

Accordingly, if the ‘sleepover shift’ hours are not paid at a higher base rate as overtime, then those hours would be considered to be ‘ordinary hours of work’.

If a ‘sleepover shift‘ allowance is paid as an unconditional extra payment, it would also be considered part of OTE for Superannuation Guarantee purposes.

However, if the ‘sleepover shift’ hours are paid at a higher base rate as overtime, then they would not count as OTE.

Question: Thank you for answering our question. Is this a general rule that applies also to Home Care/Aged Care Service Provider?

Answer: Yes. It is a general rule, and does also apply to health care/aged care providers.

There are limited circumstances when you can access your super early. These circumstances are mainly related to specific medical conditions or severe financial hardship. You will need to ensure you meet the eligibility criteria and provide the required evidence.

For severe financial hardship, you will need to apply to DHS. For more information visit Early release of superannuation at DHS.

For compassionate release of superannuation you will need to apply to the ATO. For more information go to Early access to your super or call us on 13 10 20.

You may be eligible to apply for compassionate release of superannuation to pay for mortgage arrears if your mortgage lender is threatening to repossess or sell your home. To be eligible, both the following must apply:

• the property is your principal place of residence
• you are legally responsible for the mortgage repayments and are listed on the written statement from your mortgagee.

You will also need to provide the required evidence with your application. 

You can find more information about the compassionate release of superannuation and how to apply at access on compassionate grounds or by calling 131020.

You can keep track of your superannuation by logging into your myGov account and accessing the ATO Online service.

The following link will provide you with the instructions: keeping track of your super using myGov

Eligibility for the FHSS Scheme is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions and associated earnings to purchase the same property. If any of the parties have previously owned a home, it will not stop those who have not previously owned property being eligible under the Scheme.

To be eligible, your spouse would need to have been making super contributions, that are voluntary concessional (before-tax) and/or non-concessional (after-tax) contributions into her super fund to save for her first home from the 1 July 2017 onwards, be 18 years old or over and also meet the below eligibility criteria:

• have never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that she has suffered a financial hardship)

• have not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.

Additionally, to be eligible to access the FHSS Scheme an individual must enter into a contract to purchase or construct a house within 12 months of the FHSS amount being released. Therefore your spouse’s name would need to be listed on the contract to purchase or construct a home, or on the property title, at the time she notifies the ATO of the purchase made. If your spouse has had FHSS money released and she is not eligible for the FHSS Scheme, penalties may apply for giving false or misleading information and/or the FHSS tax may be applied to the assessable amount released.

Please keep in mind that if you are not an Australian resident for tax purposes you will pay any income tax on the assessable income from the FHSS scheme at the non-resident tax rate (less the 30% tax offset). You should also check whether there are any other limitations to you purchasing residential property, new or established, in Australia.

An individual would not be liable for the FHSS tax after they signed a contract if they meet all of the following conditions:

• did not make a false or misleading statement when requesting the FHSS determination or release

• did not sign the contract before we released the first FHSS amount to you

• signed the contract to purchase or construct a home within 12 months (or an extended period allowed by the Commissioner)

• the contract price is at least equal to the sum of the assessable FHSS released amounts

• have either occupied or intend to occupy the premises as soon as practicable

• intend to occupy the premises for at least 6 of the first 12 months after it is practicable to do so

• notified us that you have entered a contract to purchase or construct a residential premises within 28 days of signing the contract.

If an individual signs a contract to purchase or construct their home, before the FHSS money is released, they will not be required to pay the FHSS tax if they recontribute the required amount to their super fund or they sign another contract.

This question should be directed to APRA as they process applications for:

• elections to become a Public Offer SuperannuationFund

• a Registrable Superannuation Entity (RSE) licence

A public offer superannuation fund is an RSE regulated by APRA and the fund’s trustee must hold an RSE licence issued by APRA.

When your application is finalised, a message will be sent to your myGov inbox with the outcome. If your application is approved, we will also notify your super fund.

As this is a two-step process, you must contact your superfund to arrange release of your money. You will need to provide the superfund with a copy of the approval letter to process your payment.

You are able to sign a contract to purchase or construct your home after we have released the first amount of FHSS money into your bank account. If you sign a contract before your FHSS money is released, then you may be liable to pay FHSS tax.

The release date for FHSS is the date we send your FHSS money to your nominated bank account. It can take 2-3 business days, or longer (depending upon your financial institution) for your FHSS money to reach your account, but provided the money has been released to you, you can sign a contract to purchase or construct your home.

If you have requested a release of your FHSS amount from multiple super funds, it is the date the first amount of FHSS money is released to you that is important. You do not need to wait until we have released all amounts to you to sign your contract.

Dear Sir/Madam,

Thank you for your email. Super Transfer balance account report instructions

Q: This is were the grey area is , under an industrial agreement i cannot directly alter the salary sacrifice payment ,and the ato states that because this is an industrial agreement it is not reportable . Could you please clarify this as mine is reported but on my gross pay , which means double taxation .what does not reportable mean? Regards rob

A: As previously mentioned, the super contributions an employer makes for an employee are not reportable employer super contributions if both of the following apply:

• the employer makes the contributions to meet the terms of an industrial agreement

• the employee did not, or could not, directly influence the terms of the agreement.

Not reportable means that the contributions should not be included on your payment summary at all.

If your employer has provided you with a payment summary that contains incorrect information, you will need to ask your employer to provide you with an amended payment summary. If you have already lodged your tax return with the incorrect information, you may need to lodge an amendment request. Please refer to Incorrect amounts at RESC - Already lodged to determine if you are required to amend your tax return.

Where an employer makes extra super contributions for an employee – for example under a salary sacrifice arrangement – the employer must report those extra contributions on the employee’s annual payment summary if:

• the contributions are more than the employer is required to pay by law, an industrial agreement or the super fund’s governing rules, and
• the employee has the capacity to influence the amount the employer contributed.

The extra super contributions are to be reported at the reportable employer super contributions (RESC) label of the employee’s annual payment summary.

Salary sacrificed super contributions are considered concessional contributions and are taxed in the superannuation fund at a rate of 15%. They are not included in an employee’s assessable income therefore double taxation of these contributions does not occur. We need information about these contributions because they are included in the income tests for some government benefits and obligations.

The super contributions an employer makes for an employee are not reportable employer super contributions if both of the following apply:

• the employer makes the contributions to meet the terms of an industrial agreement
• the employee did not, or could not, directly influence the terms of the agreement.

For more information about contributions made under industrial agreements see Contributions made under industrial agreements.

Note: The ATO does not enforce industrial agreements and cannot provide advice on how they will affect particular situations.

Information and advice about industrial awards can be provided by the Fair Work Ombudsman. The Fair Work Ombudsman can be contacted on 13 13 94.

Q: This is were the grey area is , under an industrial agreement i cannot directly alter the salary sacrifice payment ,and the ato states that because this is an industrial agreement it is not reportable . Could you please clarify this as mine is reported but on my gross pay , which means double taxation .what does not reportable mean?
 
A: As previously mentioned, the super contributions an employer makes for an employee are not reportable employer super contributions if both of the following apply:

• the employer makes the contributions to meet the terms of an industrial agreement
• the employee did not, or could not, directly influence the terms of the agreement.

Not reportable means that the contributions should not be included on your payment summary at all.

If your employer has provided you with a payment summary that contains incorrect information, you will need to ask your employer to provide you with an amended payment summary. If you have already lodged your tax return with the incorrect information, you may need to lodge an amendment request. Please refer to Incorrect amounts at RESC - Already lodged to determine if you are required to amend your tax return.

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If money is deducted from my pay as part of an industrial agreement and meets all the conditions to be not reportable so therefore does not appear on my payment summary. Can you please tell me were my employer has to account for this money as I assume it has to be accounted for somewhere .regards rob
A: Money deducted from salary or wages as part of an industrial agreement, which meets the conditions to be non-reportable, are tracked by the employer, who is required to keep records for five years after they are prepared, obtained, or the transactions are completed, whichever occurs last.

These amounts are not reported to us directly. They may also be reported on the employees payslips, and will be visible on the client’s super fund statements as part of the Superannuation Guarantee amounts paid to the client’s fund.

Note: Please ensure that all questions are submitted via the Q&As section.

When the ATO determines an individual is not eligible to make a Downsizer contribution we send a letter to both the fund and the individual.

In our letter to the fund we provide the member’s name, the contribution details and in some cases the reason the member is not eligible to make a downsizer contribution. We also include information on what the fund needs to do next.

In our letter to the individual we provide the name of the fund(s) who have reported downsizer contributions on their behalf, the contribution amount(s) and the reason the contribution (or any part thereof) can’t be accepted as a downsizer contribution. We also include information on what happens next.

No ATO does not send partial responses. MAAS (and MATS) are ATO services and not SuperStream interactions. The applicable technical documents (in addition to the SPRMBR specs) to reference are on the sbr.gov.au website. Of note, if a batch request contains 1000 or more messages/accounts, then there will be two responses for polling; a validation and business response.

The Departing Australia Superannuation System displays all your super accounts that have been reported to the ATO.

Generally, if it has been six months or more since you left Australia, your visa has ceased to be in effect

and you have not claimed DASP, your super fund will transfer your super money to the ATO.

If you're not sure where your super is, you can search for it by using the DASP online application system

once you've met eligibility requirements and provided your TFN.

Periods prior to 1 July 2018 were reported via MCS, therefore an amended MCS would be required for transactions relating to that period.

Any contributions rolled over, transferred or allotted to a spouse under a contributions splitting arrangement would need to be reported for the applicable year in that years MCS. If it was on or after 1 July 2018, it would be reported via MATS.

Please see legislation quoted below – the amounts we guide providers to report at these labels are concessional contributions. A concessional contribution is defined in Section 291-25 of the Income Tax Assessment Act 1997 (ITAA 1997). In general these are the contributions which are made to a complying super plan in respect of a member and are included in the assessable income of the superannuation provider in relation to the superannuation plan.

Subdivision 295-C of the ITAA 1997 outlines which contributions are considered assessable of a superannuation provider in the following table:

Contributions and payments included in assessable income
Item	Assessable income of this entity:	Includes:
1	CSF N-CSF that is an * Australian superannuation fund for the income year * RSA provider	Contribution to provide * superannuation benefits for someone else (except a contribution that is a * roll-over superannuation benefit)
2	N-CSF that is a * foreign superannuation fund for the income year	Contribution to provide * superannuation benefits for someone else to the extent that it relates to a period when that person was:
		(a) an Australian resident; or
		(b) a foreign resident who * derives * withholding payments covered by subsection 900-12(3)
		(except a contribution that is a * roll-over superannuation benefit)
3	CSF CADF * RSA provider	Payment under section 65 of the Superannuation Guarantee (Administration) Act 1992
4	CSF * RSA provider	Payment under section 61 or 61A of the Small Superannuation Accounts Act 1995

The concessional nature of a contribution does not specifically relate to whether it was taxed at some point prior to being contributed, it relates to whether it is considered assessable income of the complying super provider as per the legislation.

Contributions made to provide a benefit for someone else are assessable contributions unless they fit a specific exception in the law – our protocols encourage you to only put the third party amounts which are not an exception in the legislation into the Other Third Party (including family and friends) field.

Question: Can you please clarify whether 15% needs to be applied and need to be classified as concessional contributions?

Answer: Yes, these are assessable income of the fund and should be treated as such.

The eligibility provisions for the first home super saver scheme do not include any reference or requirement for the individual to be an Australian citizen, Australian resident or an Australian resident for taxation purposes.

An individual is eligible to request a FHSS determination and request a release of their FHSS amounts if they:

• have never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship)
• have not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.
• are 18 years or older

For voluntary employer contributions in respect of the individual or voluntary member contributions made by the individual to be eligible to be released under the FHSS scheme they must be either concessional or non-concessional contributions made within the contributions caps. The definition of concessional and non-concessional contributions includes that they are contributions made in a financial year to a complying superannuation plan. The rules regarding an individual’s eligibility to make contributions to complying superannuation plans in Australia apply equally to residents and non-residents.

Note an individual who is not an Australian resident for tax purposes would pay income tax on the assessable FHSS released amount that would be included in their assessable income under the FHSS scheme, at the non-resident tax rate, however they do not have to pay the Medicare levy.

Also, if an individual intends to apply for release under the FHSS scheme with the intention to use the released amounts to purchase a home in Australia they should also check whether there are any other limitations to them purchasing residential property, new or established in Australia. Information is available on the ato.gov.au website in relation to owning real property in Australia (search QC 33223) and residential real estate application instructions (search QC 47396).

In order for a member to lodge via the ATO online system they need to have an open and active fund. The fund needs to have lodged an MCS for that member within the last two years or they need to lodge a member account form (this will show an open fund but with 0 balance). As long as the fund details are displayed then the member will be able to lodge the CRS application.

As the ATO will be issuing correspondence directly to the funds, we need to have this link between the fund and the member.

It is the member’s responsibility to check that they have enough money in their fund before submitting an application. As long as the account is displayed and the member meets eligibility criteria we will process the application.

We are aware that there are delays in the lodgement of MCS forms, but fund should be lodging Member Account forms promptly after gaining new members.

The fund notice letter sent to the fund via BDE is not an exact replica of the member’s letter. There are a number of differences including:

• the grounds for the approval are not included in the fund letter
• the amount requested from other funds is not included in the fund letter
• the reference numbers and dates may differ as the correspondence is generated in different systems.

Funds should feel confident to approve a release if the amount on the member’s letter matches their fund notice. If the fund receives vastly different information or receives what it believes to be duplicate requests, then please email SuperCRT@ato.gov.au  so we can investigate.

Under the FHSS scheme, individuals can only apply for a release once. Before requesting a release of their savings, individuals should:

• check that they have made all of the voluntary FHSS contributions they want to make
• make sure that they agree with the amounts shown in the FHSS determination. If not, they need to resolve any issues through our standard review processes for determinations before they apply for a release.

Note: Once individuals have requested a release they can't request another one or make any changes to the release request. This applies even if they have requested an amount less than their FHSS maximum release amount.

From 1 July 2018 super funds could start accepting downsizer contributions. So if your super fund does accept these, they are able to receive them now.

There have been some changes to the way super funds report contribution information to us. This means that although your super fund can receive your downsizer contribution now, their reporting to us may be scheduled for a later date such as October or November.

This has no impact on your ability to make  a downsizer contribution now to a fund that can accept them.

There are also circumstances where an extension of time may be required however in this situation it should not be necessary.

The ATO will be providing further information to super funds to assure them that they can accept downsizer contributions now.

Compulsory repayments against a study or training support loan (HELP loan) commence when an individual’s repayment income exceeds the minimum HELP loan repayment threshold. Compulsory repayments are made through the tax return.

If an individual has a HELP loan when they lodge their tax return and the repayment income is above the minimum repayment threshold, we will work out the compulsory repayment and include it on the income tax notice of assessment. If an individual does not pay this notice of assessment by the due date, any FHSS released amounts could be used to offset the outstanding income tax debt (which in this case would include the compulsory repayment of part of your HELP loan). Your FHSS released amount would not be offset against any portion of the loan that does not form part of an income tax assessment.

When an individual provides information to the ATO as part of their FHSS determination request, this is on the basis of self-assessment. This means that the information provided by the individual is initially accepted as being true and correct, however, this information may be subject to review in the future. Where it is found that an individual has intentionally provided incorrect information in their determination request, they may be subject to a penalty for providing a false or misleading statement.  An individual’s FHSS determination is currently based on the information provided by the individual, when MCS reporting is available, an individual will have the ability to modify/supplement the data reported to the ATO by their super fund(s).

The rules that govern the early release of super under medical grounds have not changed following the transition of the function from DHS to the ATO. As such, the evidence requirements and supporting documentation remain unchanged, with all applications being assessed following the eligibility criteria and medical evidence provided.

You do not meet the eligibility criteria for compassionate release of superannuation.  However, you may be eligible for other support. Go to severe financial hardship.

An individual cannot request a FHSS determination and therefore cannot request a release of FHSS amounts if they have previously requested a release authority under Division 131 in relation to a first home super saver determination. As a result, if the individual has recontributed the FHSS release amount they will not be able to request a further FHSS release.

An individual is required to notify the ATO within specified timeframes if they have either:

• entered a contract to purchase or construct a residential premises or
• recontribute the required amount into one or more of their superannuation funds

A person who is 65 years of age should be able to access their superannuation by contacting their fund. Further information about accessing superannuation can be found using this LINK.

(https://www.ato.gov.au/individuals/super/in-detail/withdrawing-and-paying-tax/withdrawing-your-super-and-paying-tax/#Whenyoucanaccessyoursuper)

A person with a HELP debt whose taxable income is over the minimum repayment threshold is liable to a compulsory repayment amount (equivalent to the amount of their total HELP debt) that doesn’t exceed the HELP repayment percentage for that income year. This debt is assessed and recovered as if it were an income tax liability and is assessed as part of the person’s assessment of income tax. If an individual fails to pay their taxation liability, the individual’s FHSS amount may be offset against this amount.

The Know Your Customer (KYC) requirements and any exemption for these requirements is a matter for AUSTRAC who administer the anti-money laundering laws. ATO confirms that funds are required to respond to a FHSS release authority within 10 days from the date of issue.

You may be eligible to apply for compassionate release of superannuation on behalf of a dependant. You will need to ensure you meet the eligibility criteria and provide the required evidence.  You can find more information about the compassionate release of superannuation and how to apply at Early access to your super or by calling 131020.

The amount in the ATO approval letter (and the associated notice to funds) to be released to the individual is the NET amount.

If the approval amount is $10,000 on the letter, the member will receive $10,000 and tax is taken out of the member’s fund balance i.e. $10,000 + tax.

The downsizer contribution into superannuation form is now available at ato.gov.au. Click on the hyperlink below to download the Downsizer contribution into superannuation form.

Downsizer contribution into superannuation form

The downsizer contribution into superannuation form is now available at ato.gov.au. Click on the hyperlink below to download the Downsizer contribution into superannuation form.

Downsizer contribution into superannuation form

The downsizer contribution into superannuation form is now available at ato.gov.au. Click on the hyperlink below to download the Downsizer contribution into superannuation form.

Downsizer contribution into superannuation form

Once we notify you that a member’s downsizer contribution, or a part of a member’s downsizer contribution has been identified as ineligible you will need to assess whether the contribution can be accepted as another contribution type under 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 (SISR 1994) and 5.03(1) of the Retirement Savings Accounts Regulations 1997.

Where the member was able to meet the age and work test you will need to take the following action:

• cancel or amend the original downsizer contribution to $0
• re-report the contribution, or that part of the contribution that is ineligible as a Personal contribution.
• This applies even if the member has left the fund or is in pension phase.

Where the member was unable to meet the age and work test you will need to take the following action:

• cancel or amend the downsizer contribution to $0
• return the amount to the member.
• We are still awaiting advice from our technical area in relation to the steps the fund should take if the member has left the fund.

Re-reporting in-eligible downsizer contributions as a personal contribution may result in some members exceeding their non-concessional contributions cap.

Once we notify you that a member’s downsizer contribution, or a part of a member’s downsizer contribution has been identified as ineligible you will need to assess whether the contribution can be accepted as another contribution type under 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 (SISR 1994) and 5.03(1) of the Retirement Savings Accounts Regulations 1997.

Where the member was able to meet the age and work test you will need to take the following action:

• cancel or amend the original downsizer contribution to $0
• re-report the contribution, or that part of the contribution that is ineligible as a Personal contribution.
• This applies even if the member has left the fund or is in pension phase.

Where the member was unable to meet the age and work test you will need to take the following action:

• cancel or amend the downsizer contribution to $0
• return the amount to the member.
• We are still awaiting advice from our technical area in relation to the steps the fund should take if the member has left the fund.

Re-reporting in-eligible downsizer contributions as a personal contribution may result in some members exceeding their non-concessional contributions cap.

Once we notify you that a member’s downsizer contribution, or a part of a member’s downsizer contribution has been identified as ineligible you will need to assess whether the contribution can be accepted as another contribution type under 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 (SISR 1994) and 5.03(1) of the Retirement Savings Accounts Regulations 1997.

Where the member was able to meet the age and work test you will need to take the following action:

• cancel or amend the original downsizer contribution to $0
• re-report the contribution, or that part of the contribution that is ineligible as a Personal contribution.
• This applies even if the member has left the fund or is in pension phase.

Where the member was unable to meet the age and work test you will need to take the following action:

• cancel or amend the downsizer contribution to $0
• return the amount to the member.
• We are still awaiting advice from our technical area in relation to the steps the fund should take if the member has left the fund.

Re-reporting in-eligible downsizer contributions as a personal contribution may result in some members exceeding their non-concessional contributions cap.

The design of our process and notifications for ineligible Downsizer contributions are fully automated. This ensures:

• They issue in a timely manner
• Where we can, we notify the individual in the first instance
• We only notify funds when a contribution is determined to be ineligible

Unfortunately we are not able to give you a yes or no answer because the ten year ownership test is just one of the eligibility requirements you need to meet to make a downsizer contribution.

You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following

• you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
• the amount you are contributing is from the proceeds of selling your home where the contract of sale was exchanged on or after 1 July 2018
• your home was owned by you or your spouse for 10 years or more prior to the sale - the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
• your home is in Australia and is not a caravan, houseboat or other mobile home
• the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
• you have provided your super fund with the downsizer contribution form either before or at the time of making your downsizer contribution
• you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually the date of settlement
• you have not previously made a downsizer contribution to your super from the sale of another home.

However, we can provide the following information and example which should help answer your question.

Ten year ownership test: Interest in the land

The 10 year ownership requirement can relate to land on which the house is situated which allows for cases where a house is knocked down and another is built in its place or where a dwelling is built on a vacant block.

In these circumstances and individual must have owned the land at least 10 years prior to the disposal of the house. All other requirements, including that the disposal must relate to a house and that the main residence requirement is satisfied continue to apply.

Example

Akira purchased a vacant block of land in 2010 when she was aged 58. In 2017 she built a dwelling on the property and resided in that property for four years, treating that property as her main residence for CGT purposes.

In 2021 Akira sold the dwelling and is able to partially disregard the resulting capital gain made upon this disposal. Akira is able to make a downsizer contribution as she satisfies the 10 year ownership test even though at the time she purchased the property it did not have a dwelling on it.

If an individual’s home is accidentally destroyed and only the land is sold, the sale of a vacant block of land would not satisfy section 292-102(1)(b) Income Tax Assessment Act 1997.

To be eligible to make a downsizer contribution, an individual or their spouse must have 'disposed' of an 'ownership interest' in a 'dwelling' which is located in Australia.

  292-102 Downsizer contributions

  Criteria for a downsizer contribution 

  (1) A contribution is covered under this section if:

(b) the contribution is an amount equal to all or part of the capital proceeds  received from the disposal of an ownership interest in a dwelling; …

From 1 July 2018, your members will be able to apply directly via myGov. Members can find more information on eligibility, evidence required and the application process on https://www.ato.gov.au/individuals/super/accessing-your-super/early-access-to-your-super/#Compassionategrounds or by phoning 13 10 20 between 8am and 6pm, Monday to Friday. The compassionate release application portal link will be activated on 1 July 2018.

The bank/mortgagee can contact the ATO 131020, however, no information can be provided regarding the clients application, unless they have been identified as an authorised contact.

From 1 July 2018, funds will receive a simultaneous electronic copy of the approval notice when we approve a compassionate release application. You will receive these ATO compassionate release notices via the BDE service. In order for funds to use the BDE service, they will need access to AUSkey.

Listed below is some key information for you about this service:

• you will receive compassionate release email notifications via your existing registered email addresses within the BDE Portal
• you need to ensure that the appropriate permissions are in place for staff to view these files. This can be set in Access Manager by the funds’ AUSkey administrator.
• if you (individual fund or administrator) need to change your email address for the BDE Portal or obtain access to the Portal, you can request this by emailing

We have issued Super CRT Alert 058/2018 which will provide you with more information on this process.

Super guarantee contributions from employers are due quarterly on the 28^th day after the end of the relevant quarter. The best source of information on when you last made a payment would be your own business records and bank statements. If these are not available and you pay through a clearing house, they may be able to assist, alternatively you would need to check with your employee’s super fund to which you sent the payment. The ATO does not currently hold this information (in an audit we would require you to provide evidence of payments made).

The ATO understands that postal delays and other issues may lead to delays in funds receiving and actioning Release Authorities. This is especially the case for FHSS Release Authorities which have a 10 business day requirement. In these types of circumstances where they are outside the control of the funds, the ATO recognises that funds will take the appropriate steps to action these Release Authorities as soon as they are received, which in some cases may be after the due date.

In the event that during the transition period, the fund receives a fund notice from the ATO, but the fund has already paid the same amount under a DHS approval, funds should not action the approval release from the ATO. Funds should email the CRT mailbox that is currently used for fund enquiries, and include a copy of the DHS approval letter supplied to them by the member.

There is no change to the eligibility criteria for the compassionate release grounds as a result of this transition from DHS to the ATO. As such, the evidence (supporting documentation, quotes and invoices) requirements will be unchanged.

The ATO online application process and paper application forms have been streamlined to make it easier for individuals.

The ATO web-content will have detailed information on eligibility, evidence required and application process and will be available prior to 1 July 2018. This web-content will also contain the link for individuals to apply to the ATO’s superannuation portal within myGov. If individuals have any questions, they will be able to call the ATO on 131020 from 1 July 2018.

An individual’s FHSS determination will include their eligible voluntary contributions made to all of their super funds. Individuals will be able to submit a determination request and a release request using ATO online. Individuals can only request a release once and this request can relate to multiple super funds i.e. a separate determination or release form is not required for each fund.

The FHSS determination will state their:

• Maximum release amount; and
• The amount of each of the components that make up their FHSS maximum release amount which includes their voluntary;
  • Concessional contributions
  • Non-concessional contributions; and
  • Associated earnings.

When requesting a FHSS determination, the individual will need to provide the contribution details from their super funds so that we can calculate the maximum release amount.

The individual can request a release of their FHSS amount from either one or more of their super funds. They need to be aware that they can only request a release once, this request will result in a release authority being issued to one or more super funds. In addition, there is nothing preventing an individual asking for release under the FHSS scheme from a different fund than the fund to which the contributions were originally made, for example, the individual may have rolled over their interest in a fund or have multiple funds.

if Temporary Residents use ATO-online they will be directed to use the DASP online system (as Visa details will be checked against information held by the Dept of Home Affairs)

The link to Departing Australia superannuation payment essentials is: Super for temporary residents leaving Australia

From 1 July 2018, members will be able to apply via the ATO linked service in myGov. Applicants are encouraged to read the ATO web content prior to applying. This content will also include a link to the online application service. For members that do not have access to digital services, they can request a paper application form by contacting 13 10 20.

If an individual does not to enter into a contract to purchase or construct a residential premises, then they may recontribute an amount into superannuation during the same period they had to enter into the contract. This amount must be at least equal to their assessable FHSS released amount (which is concessional contributions plus earnings on all released concessional and non-concessional contributions) less any amounts withheld by the Commissioner and notify the ATO in the approved form.  The amounts required to be re-contributed can be made as single or multiple non-concessional contributions to one or more super funds.

Super funds will need to accept the FHSS recontributed amounts as non-concessional contributions for the year in which the re-contribution is made and report these re-contributed amounts through the existing reporting processes to the ATO.  There is not an ATO specific form that a member is required to provide to funds when making a recontribution. Once made, these contributions are no different to other non-concessional contributions and therefore, there is no specific distinct reporting required by the super funds.

We refer to your question asking if it is necessary to issue a payment summary to a member aged 60 or over when there is zero tax payable.

This guidance is general in nature and is not binding on the Commissioner.

In the past, where you were required to issue payment summaries to your members, you will continue to do so in exactly the same manner.  In addition, you will now also be required to issue a payment summary to a member:

·  aged over 60 who has a capped defined benefit income stream, and

·  to a member aged under 60 and receiving a reversionary capped defined benefit income stream where the deceased died at 60 years or over.

Payment summaries need to be provided even where the withholding amount is nil.  Where a member turns 60 during the year and only receives an account based income stream, you are not required to provide a payment summary for the income paid to them after their birthday.

We hope this clarifies the situation for you.

Further information on Payment Summaries may be found on our ato.gov.au web site by searching Quick Code QC19550.

No – The fund can use the notice sent by the ATO via BDE for the purpose of validation when/if the member presents their approval letter to the fund. Under the existing DHS administered scheme, funds wait for the member to bring their approval letter to the fund before they start processing this release. This transition of this program to the ATO (including the provision of a fund notice) does NOT change this practice.

The fund can make their own decision in relation to the evidence that is required for compassionate release of superannuation. This notice is purely a record for the fund to store for the purpose of validation when/if the member presents their approval letter to the fund. Under the existing DHS administered scheme, funds wait for the member to bring their approval letter to the fund before they start processing this release. This transition of this program to the ATO (including the provision of a fund notice) does NOT change this practice.

Yes – Members’ will still receive an approval letter to provide to the Trustee.
The fund notice sent via BDE is purely a record for the fund to store for the purpose of validation when/if the member presents their approval letter to the fund. Under the existing DHS administered scheme, funds wait for the member to bring their approval letter to the fund before they start processing this release. This transition of this program to the ATO (including the provision of a fund notice) does NOT change this practice.

Eligibility to the First Home Super Saver (FHSS) scheme for ‘off the plan’ purchases varies, subject to the state the property is located in and the terms of the contract. We will need additional information in order to provide an answer tailored to the particular circumstances of your case.

Please send your request, including a copy of the contract and the location of the property, to:

Australian Taxation Office
PO Box 3100
PENRITH NSW 2740

Hi, Thank you for your question but unfortunately the information provided on the web page is comprehensive; that a single A4 one page consolidated view is simply not possible.

However, the key topics can easily be accessed on the left of the screen and there are also a number of links on the home page that the you can choose from.

Furthermore, there are two options on the top right of the webpage where a client can choose to either save the entire web content as a 56 page PDF or they can choose to print the entire content. If they choose the latter, then they can scroll down the entire webpage on screen.

Below are some printing or saving options:

From 1 July 2018, Superannuation funds will receive the ATO compassionate release approval notices via the Bulk Data Exchange (BDE) service used by superannuation funds to receive Electronic Portability Form (EPF) requests from the ATO. Superannuation funds should automatically receive compassionate release email notifications. You will need to go to the File Status page of this service to view and download the compassionate release PDF notice files. Superannuation funds will need to ensure that the appropriate permissions are in place for staff to view these files. This can be set in Access Manager by the superannuation fund’s AUSkey administrator. The email notification will include the details of the approval notice provided to the member in a PDF attachment.

You should receive notifications for any services that you have subscribed to in Access Manager.

When a member’s compassionate release application is approved by the ATO, funds will receive an electronic copy of the approval notice at the same time as the member. From 1 July 2018, Superannuation funds will receive the ATO compassionate release approval notices via the Bulk Data Exchange (BDE) service used by superannuation funds to receive Electronic Portability Form (EPF) requests from the ATO. Superannuation funds should automatically receive compassionate release email notifications. You will need to go to the File Status page of this service to view and download the compassionate release PDF notice files. Superannuation funds will need to ensure that the appropriate permissions are in place for staff to view these files. This can be set in Access Manager by the superannuation fund’s AUSkey administrator. The email notification will include the details of the approval notice provided to the member in a PDF attachment.

FHSS - Further to the following Q&A's regarding re-contributing FHSS, please clarify in which circumstances the contribution needs to be reported by the Fund as ‘other non-concessional contribution' and when it needs to be reported as standard 'non-concessional contribution':

An amount that is a recontributed FHSS amount should always be reported as a personal non-concessional contribution by the fund.

DHS will have responsibility for processing applications it receives up to and including 30 June 2018. The ATO will then commence processing any applications it receives from 1 July 2018 onwards. As a result, DHS will continue for some time post 1 July 2018, to finalise any processing backlogs of applications they have received prior to 30 June 2018. DHS will also action any review of decision cases that are received post 1 July 2018 for applications processed prior to 1 July 2018. So there is likely to be a period of time where the fund may receive letters from both DHS and the ATO. Both departments will be providing regular updates to funds, including when the ATO takes over responsibility for the program, and DHS stop processing all pre 30 June 2018 applications.

The ATO does not request and pass on member bank details as:-

• Some funds have advised that they have their own process for getting this information from the member.
• For privacy reasons, the ATO cannot collect and pass on this information.

The ATO will send a separate fund notice to each fund the member is requesting to access money from.

There is no expiry date on the ATO fund notice. The process and timing for dealing with releases under this scheme are no different to the current DHS process.

Funds should email the CRT mailbox that is currently used for fund enquiries, and include a copy of the approval letter supplied to them by the member.

Funds should email the CRT mailbox that is currently used for fund enquiries.

The mechanism for funds to receive these ATO compassionate release notices will be via the BDE service that was previously used by funds to receive Electronic Portability Form (EPF) requests from the ATO. From 1 July 2018, funds should automatically receive compassionate release email notifications. Funds will need to go to the File Status page of this service to view and download the compassionate release PDF notice files. Funds will need to ensure that the appropriate permissions are in place for staff to view these files. This can be set in Access Manager by the funds’ AUSkey administrator.

Both the application and the ATO web content instruct the member to go to the fund prior to applying to ensure they have enough super to cover the expense. The ATO also displays the members fund accounts details via ATO Online based on the last contributions reporting by funds. It is a decision for the fund trustee to determine whether they will allow a release for less than what the ATO has approved.

For the foreclosure (forced sale of home) category, the law does not allow the ATO to release less than what is required to stop the foreclosure or forced sale of home. If a member applies under this category and their super balance does not cover the requested amount, their application will need to demonstrate how they will pay for the remaining balance.

The fund notice instructs funds to release the total amount specified on this fund approval notice (as per the existing DHS practice). There is no change to the existing compassionate release obligations for the fund to separately take out tax and any additional fees from the members account over and above the approved release amount.

We instruct members in both the web content and application form to not include release fees and tax in their application as the fund will automatically deduct these separately from the super balance.

Yes the specific amount in the fund notice is the amount approved by the ATO for release to the member.

The proposed Regulations do not mandate any obligation on the provider to release funds based on this new fund notice. Some funds may want to proactively adopt this process, and if so, this is a question for the funds internal compliance areas to pursue. In their administration of this program, DHS have indicated that members circumstances sometimes change and they may decide not to pursue a release after an approval has been made.

No – This notice is purely a record for the fund to store for the purpose of validation when/if the member presents their approval letter to the fund. Under the existing DHS administered scheme, funds wait for the member to bring their approval letter to the fund before they start processing this release. This transition of this program to the ATO (including the provision of a fund notice) does NOT change this practice.

Question 1:
Are the LISTO threshold ranges changing in this financial year (i.e. from 1 July 2018)

Answer 1:
There is no change to eligibility or thresholds for LISTO.

The LISTO eligibility and payment amounts remain as;

Eligibility

• The individual has an adjusted taxable income of $37,000 or less
• The individual did not hold a temporary residence visa at any time during the income year (there is an exception New Zealand citizens in Australia)
• For individuals who lodge a tax return 10% or more of their total income must come from business and/ or employment income OR for individuals who are not required to lodge a tax return, 10% of total income must come from employment income only.

Payment amounts
The LISTO is calculated on 15% of the concessional (before tax) super contributions you or your employer pays into your super fund.
Note: If you do not have any concessional contributions in the relevant year, you will not be eligible for a LISTO.

The maximum payment you can receive for a financial year is $500, and the minimum is $10. If you're eligible for less than $10, we will round this up to $10.

Question 2:
Exactly what date do you refresh the 18/19 PAYG tables (and other PAYG witholding rates) e.g. on this page: https://www.ato.gov.au/Rates/Individual-income-tax-rates/ ? Do you release this in advance, or are you awaiting federal government formal approval first? I know the big changes here are next FY, but every year we need to click daily on your site until the new rates appear- is there a better way to know exactly when the new tables are formally released?

Answer 2:
There is uncertainty about two announced government policies that would affect the withholding schedules if the law is passed:

1. The increase in one income threshold from $87,000 to $87,000, and
2. Changes to higher education loan repayment rates and thresholds

At this stage there is insufficient certainty that either measure will be passed into law to allow us to finalise the withholding schedules for 2018-19. As a service to developers of payment software, we have published the formulas that would apply if no. 1 above is passed into law here: https://softwaredevelopers.ato.gov.au/PAYGWTaxtables

1. Will the ATO be advising individuals and the super fund that the downsizer contribution is not eligible? How will this be done - in writing?
Yes. We will send a letter to an individual where we are seeking additional information about the downsizer contribution they have made. We will also send letters to both the individual and the super fund where we determine that a downsizer contribution is not eligible. So, it is important that individuals ensure that they provide the ATO and the fund with their new address details.

2. Will the ATO rely on the MCS reporting from super funds?
No. Downsizer contributions will be reported by super funds using the Member Account Transaction Service (MATS).

This is correct. The Total Super Balance is only calculated at the end of the financial year, so both the non-concessional contribution and downsizer contribution could be made in the same year. To avoid any unintended consequences it would be preferable to make the non-concessional contribution first in case the financial year ends in between contributions.

The relevant test is that the capital gain or loss relating to the disposal of the old interest must be wholly or partially disregarded because the property has been treated as their main residence.

This requirement will be satisfied where the capital gain or loss made by an individual is effectively exempted under the main residence provisions. In this case, it will only be a partial exemption with respect to the two years in which it was treated as a main residence and the next six years where 118-145 of ITAA1997 is applied to continue to treat the dwelling as a main residence. This partial exemption is enough to satisfy this main residence requirement.

We are unable to provide a generalised answer for this situation due to the complexities of these arrangements. Individuals or Trustees of Self-Managed Superannuation Funds may need to seek financial advice and / or request Administrative Binding Advice from the ATO.

The downsizer contribution would form part of the member’s tax free component held in the fund. The component of a death benefit made up of the tax free component is Non-assessable, non-exempt (302-140 of the ITAA1997) so no tax would be paid by adult child on these amounts.

Yes, As a general rule, individuals must have disposed of their ownership interest in a dwelling in order to make a downsizer contribution. The only exception to this is where only one spouse holds an ownership interest in the dwelling but the other spouse does not. In these circumstances it is sufficient that one spouse held the ownership interest, as long as the spouse who does not hold an ownership interest continues to meet the other requirements for the contribution to be a downsizer contribution. [Schedule 2, item 4, paragraph 292-102(1)(c)]

Also of note:
In certain cases, there may have been a change in ownership between two spouses over the 10 year period that preceded the sale of dwelling, for example relationship breakdown or death of a spouse. Provided that either of the spouses held an ownership interest in the dwelling at all times during the period, downsizer contributions can be made in respect of the person who held the ownership interest just before disposal and in respect of another person who is their spouse at that time. [Schedule 2, item 4, subsection 292-102(2)]

Your spouse includes another person (of any sex) who: you were in a relationship with that was registered under a prescribed state or territory law. Although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

Any debt outstanding on a mortgage arrangement is not considered for the purposes of determining the capital proceeds even though, in net terms, the individual may not actually hold the full sale contract amount. Section 103-10 of the ITAA 1997 clarified what is meant by "the money you have received, or are entitled to receive".

Downsizer contributions are able to be counted as an eligible contribution. From the Act, ‘Superannuation (Government Co-Contribution For Low Income Earners) Act 2003’ sections 6 and 7, there is nothing that would exclude a downsizer contribution from being eligible for a co-contribution. Note the individual must, amongst other criterion, be aged under 71 at the end of the financial year and satisfy a 10% eligible income test as per the usual co-cons requirements.

Funds can contact the "Super CRT" mailbox if they are having difficulties in meeting Release Authorities.

For the for the first 4 months (up to MCS lodgements) the individuals would self-input contributions from July 2017 until MCS on the ATO online screen and ATO will assess on the basis of that information. If MCS then provides different contribution information, the ATO can follow this up with the individual.

Yes. The FHSS release authorities will be posted in the same way as other ATO release authorities are issued.

Treasury have estimated that up to 25,000 individuals will participate in this scheme each year.

Yes – the existing ATO web-content currently outlines that it will take us approximately 12 business days to process the release request. We do not specify the timeframes between the determination and the release request, as the individual may not act on the determination immediately or at all (e.g., if they choose to continue to save more). However, if an individual that receives a determination requests the release at the same time, then this will automatically and immediately trigger the release authority to the relevant fund(s).

When an individual requests an on-line determination, this display is provided immediately. For individuals that do not have access to on-line services, they can request a determination by calling 131020, and a paper determination and accompanying release request will be issued via mail.

Any recontributed FHSSS amounts should be reported via the MATS for the period in which the recontribution is made. For clarity, these recontributed amounts do not count towards the member’s non-concessional cap.

Where the member has advised you a contribution is a recontributed FHSSS amount, this should be reported as an ‘other non-concessional contribution’. If the member has not advised you of this, any FHSSS re-contribution amounts will – in the fund’s eyes – be indistinguishable from personal contributions, and should be reported as such.

Once an individual receives their FHSS amount from the super fund(s) they will have 12 months (or extended period as allowed by the Commissioner) to sign a contract to purchase or construct a residential premises and notify the ATO in the approved form.

If the individual decides not to enter into a contract to purchase or construct a residential premises, then they may recontribute an amount into superannuation during the same period they had to enter into the contract. This amount must be at least equal to their assessable FHSS released amount (which is concessional contributions plus earnings on all released concessional and non-concessional contributions) less any amounts withheld by the Commissioner and notify the ATO in the approved form. The amounts required to be re-contributed can be made as single or multiple non-concessional contributions.

Super funds will need to accept the FHSS recontributed amounts as non-concessional contributions for the year in which the re-contribution is made and report these re-contributed amounts through the existing reporting processes to the ATO. Once made, these contributions are no different to other non-concessional contribution and therefore, there is no specific distinct reporting required by the super funds.

An individual that does not enter into a contract to purchase or construct a residential premises within twelve months of their FHSS released amounts being released to them from the ATO has the following options available to them:

1. Apply for an extension of time up to a maximum of a further twelve months;


2. Recontribute the FHSS assessable released amount less withholding tax to their fund; or


3. Retain the released amount and be subject to the first home super saver tax.

The recontributed amount must be at least equal to the individual’s assessable FHSS released amount (concessional contributions and associated earnings) less any amounts that were withheld by the Commissioner.

The recontributed amounts must be made during the same period the individual had to enter in a contract (including any extension to this time frame) to purchase or construct a residential premises. The amounts required to be recontributed can be made as single or multiple non-concessional contributions and are treated as new non-concessional contributions to the fund so that:

• they count towards the non-concessional caps in the year they are made; and
• the individual is not able to claim a deduction in respect of the recontributed amounts.

This is important for a client of ours as they have DB accounts which allow for additional Salary Sacrifice and Personal Contributions to be made. If they draw down from the Personal Contribution component then it renders them ineligible for a benefit under the rules of the product. As such they would likely only want to draw from the Salary Sacrifice contributions so as not to lose their benefit.

The ATO will apply the ordering rules only to determine the FHSS maximum release amount and the components of the contributions are not relevant when the amount is released from the fund. How the fund gives effect to the release in complying with the receipt of a release authority is for the fund to determine in accordance with its rules and any instruction from its members.

Once released, the amount will be subject to tax (as a component of assessable income). Any non-concessional amount forming part of the released amount is not subject to tax as it will have been taxed at the contribution stage.

The individual has the choice to ask for a release of an amount from a fund or funds up to the FHSS maximum release amount. They can request the full amount or a lessor amount depending on their circumstances. They can ask for release from one fund or multiple funds, it does not have to be the fund that they made the contributions to.

Note that contributions made in respect of a defined benefit interest are not eligible to be counted as eligible contributions to be released under the FHSS scheme. However, an individual could have a superannuation interest with a provider that is a defined benefit interest, and a separate interest that is not. In such cases, the limitation for eligible contributions only applies to those contributions that are made in respect of the defined benefit interest.

The ATO will count the contributions in the order received and the FHSSS will be $10k from concessional and $5k from non-concessional (excluding earnings for ease).

Does this imply that the fund must make the payment with $10k from the taxable component and $5k from tax free component? Will the components be specified on the release authority? We note the draft release authority statement (circulated on 14. 03.2018) does not specify the components, which then also raises the question how the ATO can determine and deduct the correct tax later from the FHSSS release amount, e.g. if the fund takes the FHSSS amount from the total available salary sacrifice contributions first (see below)?

The FHSS Scheme will use the standard release authority rules in Division 131 of Schedule 1 to the TAA to facilitate the release of amounts from superannuation. In complying with a release authority the fund is not required to release the funds in accordance with either the components or the proportioning rule (s131-75 of the TAA) set out in section 307-125 of ITAA 97.

The payment of an amount in relation to a release authority is a super benefit – however, as mentioned above the proportioning rule does not apply so a super fund is not required to calculate or reduce either the tax-free component or the taxable component of the super benefit when the amount is released.

The cashing order for benefits paid to satisfy a release authority, including those of the FHSS scheme is:

1. to unrestricted non-preserved benefits


2. to restricted non-preserved benefits


3. to preserved benefits.

For the purpose of paying an amount in response to receipt of a relevant release authority a fund must pay the ATO the lessor of:

• the amount stated on the release authority and
• the sum of the maximum available release amount (being the total amount of all the super lump sums that could be payable from the interest/s at that time) for each super interest the fund holds for the individual

How the fund accounts internally for the total amount is not relevant to the ATO and it does not affect the individual’s tax position (see below).

Note that, a fund is not required to comply with an authority that is issued in respect of a defined benefit interest (in these cases compliance can be provided voluntarily if the fund rules provide for release of amounts).

As explained above the release authority and/or statement does not need to and will not specify components.

The legislation states the contributions must be counted in the order in which they were contributed and if multiple contributions are received at the same time that non-concessional will be counted first.

The order in which contributions will be counted is only relevant for the purposes of determining eligible contributions that are able to be included in the FHSS maximum release amount. It is not relevant for the superannuation interests from which amounts are actually released under the FHSS Scheme. There is no requirement that the contributions and earnings that are identified in a FHSS determination be traced and released from the same superannuation interests that the contributions were made to.

When an individual applies to the ATO for FHSS determination, the ATO will apply these ordering rules and determine the FHSS maximum release amount. Neither the individual nor the fund needs to do these calculations.

The law in relation to release authorities allows the maximum FHSS release amount to be released from either the taxable or tax-free component. It is not necessary to proportion the amount between the components. The FHSS release authority will not specify from which component the amount is to be released.

The proportioning rule in section 307-125 of the Income Tax Assessment Act 1997 does not apply to a payment that is required or permitted under Division 131 of the Tax Administration Act 1953. The proposed FHSS release authorities form part of this Division along with all other types of release authorities, and as such this rule is consistent for all release types of superannuation contribution amounts covered by release authorities. This is also outlined in paragraphs 1.156 and 1.28 of the Explanatory Memorandum for the FHSSS measure.

From 1 July 2017 an individual can make voluntary concessional and non-concessional contributions into their superannuation fund to save for their first home. From 1 July 2018, an individual can apply for the release of these voluntary concessional and/or non-concessional contributions.

Voluntary concessional contributions commonly include salary sacrificed contributions and personal contributions for which a member has claimed a tax deduction.

The claiming of a tax deduction in relation to the contribution does not exclude that amount from being included in the individual’s FHSS maximum release amount. The FHSS maximum release amount will be affected by, amongst other things, the order in which the contributions were made to the fund and whether they are concessional or non-concessional. An individual can withdraw 100% of their concessional contributions and 85% of their concessional contributions.

Can you confirm if this has been done or if you are intending to do that. If so funds would like to receive a copy as funds produce their own version of the form and need to update theirs in line with ATO updates.

We are not updating the NOI form as such. The accompanying instructions will be updated.

We have also updated our web content regarding personal superannuation contribution deductions under the following sections:

“What you can’t claim”.

• Voluntary super contributions released to you under the First Home super saver (FHSS) scheme
• FHSS amounts that you have recontributed to your super fund(s)

“How to make a claim”
You can give a valid notice to your fund if all of the following apply.

• You have not yet requested a release of FHSS amounts
• The notice does not include all or part of an FHSS amount that you have recontributed to your super fund(s)

A link to this web content is provided below:
Earning income as an employee

Yes. We will provide a copy of this form over the coming weeks.

The approved form will cover both

• Purchase or construction
• Recontribution

Note: the total recontributed amount must at least be equal to the total assessable released amount less withholding tax. It can be made to one or more funds. A partial recontribution will result in the FHSS tax being applied to the total FHSS assessable released amount.

Naturally, if the member has fully exited the fund the fund would have to reject the release authority, as the fund would not hold the money to pay the ATO.

If the member balance has been reduced (say for instance by a partial rollover) would the fund still process the release authority if it held enough money or would the fund reject the release authority?

The fund is required to action all release authorities issued by the ATO to the fund.
For release authorities issued from 1 July 2018, a fund must pay the ATO the lessor of:

• The amount stated on the release authority, and
• The sum of the ‘maximum available release amounts’ (being the total amount that can be paid out of the superannuation interest) for each superannuation interest held by the fund for the individual.

The ‘maximum available release amount’ is the total amount of all the superannuation lump sums that could be payable from the interest/s at that time.

If the member’s account has an insufficient balance to release the amount listed on the release authority, the fund will be required to release the maximum amount available in the member’s account. The fund will be required to send a release authority statement to the ATO showing the amount that was released and state the reason why the full amount shown on the release authority could not be released.

Where the member has a nil account balance, the fund will be required to return the release authority statement to the ATO stating the reason the fund could not release the required amount.

Note there is nothing preventing an individual asking for release under the FHSS scheme from a different fund than the fund to which the contributions were originally made. E.g. the individual may have rolled over their interest in a fund or have multiple funds. They can choose the fund to release from (taking into account the voluntary nature of releasing for defined benefit interests).

The rules for funds to comply with a FHSS release authority are exactly the same as all other release authorities. If a fund is unable to release the amount stated on the release authority, then the fund will return the release authority statement (RAS) stating the reason the amount cannot be released.

A release authority which identifies a member’s defined benefit account number cannot be applied to the member’s corresponding accumulation account.

A fund has 10 days to respond to FHSS Scheme release authorities. This is confirmed in CRT Alert 009/2018.

The release authority letter contains the payment options available.

We note that amounts that are included in this field include employer paid insurance premiums or employer contributions that are required under an award or employment agreement.

The law and EM clearly state that to be a voluntary contribution under the FHSS a member contribution must be made ‘by you’ – that is, by an individual to their own superannuation interest.

This means that in order for member contributions to count they must be made by the individual, not by their friend, family member or spouse. They must also meet the other conditions of the scheme. Contributions by an individual via their employer are also eligible to be released in that they are not mandated employer contributions. As such, salary sacrifice amounts are also eligible contributions for the purposes of the Scheme.

Therefore, amounts reported as ‘employer voluntary’ will not be included in the maximum releasable amount.

The current expected publication date of the draft for public consultation is the week commencing 7 May 2018.

Treasury are still progressing the financial hardship regulations and are expecting that they will be available prior to 1 July 2018.