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Clarification on withdrawal amount (FHSSS)

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Hi all,

 

Apologies if this question has been answered before, regarding the following statement ·"85% of the eligible concessional contributions" and noting the cap is due to increase to $50,000 as per the 2021-22 Budget Measure. 

 

If i had $50,000 of eligible voluntary (salary sacrifice) contributions, for simplicity (noting interest) i could withdraw $50,000 x 0.85 = $42,500

 

Is it at all possible to withdraw the full $50,000 amount, if i sacrificed 58,823 ($58,823 x 0.85 = 49,999.55) ?

I have gone through the following site, and assume its not possible, but just seeking clarification.

https://www.ato.gov.au/law/view/document?DocID=GDN/GDN20181/NAT/ATO/00001&PiT=99991231235958 

 

Thanks Heaps.

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Most helpful response

ATO Community Support

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Hi @JackBauer,

 

This budget measure has not received royal assent as yet so it is not law. Once passed it should commence from 1 July 2022.

 

You can salary sacrifice up to the current cap amount $25k (increasing to $27,500 form 1 July 2021). If you exceed the cap, which includes your employers SG, you may be subject to excess concessional contributions tax. Your salary sacrifice amounts will be subject to 15% contributions tax which is why you can only release 85% of those contributions.

 

Assuming the proposed FHSS scheme max' release amount increases to $50k, you would only be able to request 85% of concessional contributions or $42,500.
 
A good way to think about it is, the $50k is the limit before your fund withholds tax. So if the $50k is non-concessional, you can release $50k. If the $50k is concessional, you can release $42,500. If it is a combination of both, you can have 100% of the non-concessional contributions and 85% of the concessional contributions, e.g. $25k concessional and $25k non-concessional means $21,250 + $25,000 = $46,250.
 

Please use the links for further assistance, including the current measures under FHSS.

 

All the best.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @JackBauer,

 

This budget measure has not received royal assent as yet so it is not law. Once passed it should commence from 1 July 2022.

 

You can salary sacrifice up to the current cap amount $25k (increasing to $27,500 form 1 July 2021). If you exceed the cap, which includes your employers SG, you may be subject to excess concessional contributions tax. Your salary sacrifice amounts will be subject to 15% contributions tax which is why you can only release 85% of those contributions.

 

Assuming the proposed FHSS scheme max' release amount increases to $50k, you would only be able to request 85% of concessional contributions or $42,500.
 
A good way to think about it is, the $50k is the limit before your fund withholds tax. So if the $50k is non-concessional, you can release $50k. If the $50k is concessional, you can release $42,500. If it is a combination of both, you can have 100% of the non-concessional contributions and 85% of the concessional contributions, e.g. $25k concessional and $25k non-concessional means $21,250 + $25,000 = $46,250.
 

Please use the links for further assistance, including the current measures under FHSS.

 

All the best.