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$15000 limit clarification

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Which of the below scenario is correct? ATO's website should make this clear with examples. I think I just ended up making excess contribution.

Scenario A:

1. FY 18/19 - Salary Sacrifice = $18000

85% of concessional (pre-tax) for FHSS purpose= $18000 x 85% = $15,300

$15,300 limited to the FHSS maximum release amount = $15000

 

2. FY 19/20 - Salary Sacrifice = $16000

85% of concessional (pre-tax) for FHSS purpose= $16000 x 85% = $13,600 (i.e within $15,000 annual limit)

 

3. Total release before adding associated earnings = $28,900

 

Scenario B:

1. FY 18/19 - Salary Sacrifice = $18000

$18,000 limited to the FHSS maximum release amount = $15000

85% of concessional (pre-tax) for FHSS purpose= $15000 x 85% = $12,750

 

2. FY 19/20 - Salary Sacrifice = $16000

$16,000 limited to the FHSS maximum release amount = $15000

85% of concessional (pre-tax) for FHSS purpose= $15000 x 85% = $12,750

 

3. Total release before adding associated earnings = $25,500

 

Question:

A. Which scenario is correct because when I did a FHSS determination, it showed the total as $25,500 under Scenario B?

B. If scenario B is correct, which means I have made an excess contribution of $4000 ($3000 in FY 18/19 and $1000 is FY 19/20):

i) Can I withdraw this excess $4000 from my super fund? If yes, how?

ii) What are the tax implications? All contrubutions made are within my contributions cap limit and hence fully deducted from my taxable income assuming I am in the 32.5% tax bracket and pay medicare tax 2%.

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Hi @P-32

 

Thanks for your post.

 

The short answer to your first question is that scenario B is correct.

 

While you are more than welcome to contribute more, the maximum voluntary contributions you can apply for under the FHSS scheme is $30,000 with a $15,000 contribution limit per financial year.

 

It is important to note that the maximum amount you can apply for is 100% of your non-concessional contributions and 85% of your concessional contributions. This is called the FHSS maximum release amount.

 

The reason why you can't withdraw 100% of your concessional contributions is because of the 15% tax that your super fund is required to pay on those contributions.

 

You can find out more about how this works by checking out the first home super saver scheme page on our website. If you would like to see some examples, scroll to the bottom of the page and click on the GN 2018/1 link.

 

You won't be able to withdraw the other $4,000 via the FHSS scheme. To be able to access more of your super, generally you will need to meet a condition of release which you can read about on our website.

 

While you can only withdraw after-tax contributions of $25,500 (before-tax $30,000), you are still able to take advantage of the 15% concessional contributions tax on all of the salary sacrificed contributions.

 

What this means is that all of your 2018-19 ($18,000) and 2019-20 ($16,000) salary sacrificed contributions will be taxed at 15%. Being unable to withdraw $4,000 of those contributions (via the FHSS scheme) is irrelevant.

 

Hope this helps.

 

Thanks,

 

ChrisR

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ATO Certified

Community Support

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Hi @P-32

 

Thanks for your post.

 

The short answer to your first question is that scenario B is correct.

 

While you are more than welcome to contribute more, the maximum voluntary contributions you can apply for under the FHSS scheme is $30,000 with a $15,000 contribution limit per financial year.

 

It is important to note that the maximum amount you can apply for is 100% of your non-concessional contributions and 85% of your concessional contributions. This is called the FHSS maximum release amount.

 

The reason why you can't withdraw 100% of your concessional contributions is because of the 15% tax that your super fund is required to pay on those contributions.

 

You can find out more about how this works by checking out the first home super saver scheme page on our website. If you would like to see some examples, scroll to the bottom of the page and click on the GN 2018/1 link.

 

You won't be able to withdraw the other $4,000 via the FHSS scheme. To be able to access more of your super, generally you will need to meet a condition of release which you can read about on our website.

 

While you can only withdraw after-tax contributions of $25,500 (before-tax $30,000), you are still able to take advantage of the 15% concessional contributions tax on all of the salary sacrificed contributions.

 

What this means is that all of your 2018-19 ($18,000) and 2019-20 ($16,000) salary sacrificed contributions will be taxed at 15%. Being unable to withdraw $4,000 of those contributions (via the FHSS scheme) is irrelevant.

 

Hope this helps.

 

Thanks,

 

ChrisR