Making housing more affordable for first home buyers took a step forward with the introduction of legislation into parliament for the First Home Super Saver Scheme (FHSSS), Member for Wannon Dan Tehan says.
But Industry Super Australia, which represents 15 industry superannuation funds, said the scheme would put retirement savings at risk and could drive up housing demand.
Mr Tehan said the scheme, announced in this year’s federal budget, would give first home savers the ability to accelerate their savings by at least 30 per cent.
First home buyers will be able to save for a house deposit within their superannuation by making voluntary contributions of up to $15,000 per year and $30,000 in total into their superannuation account.
These contributions, which are taxed at the discounted rate of 15 per cent, along with deemed earnings, can be withdrawn for a deposit from July 1 next year.
Withdrawals will be taxed at marginal tax rates less a 30 per cent offset.
“For most people, the First Home Super Saver Scheme will allow them to save for a deposit 30 per cent faster than saving through a standard deposit account,” Mr Tehan said.
But Industry Super Australia said in times of low or negative returns, the FHSSS could force super funds to dip into members’ super guarantee balances to cover the difference between guaranteed and actual returns.
It said its analysis showed that if the scheme had been in operation over the last decade, more than half of savers would have had their compulsory super assets eroded due to its design.