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Re: FHSS Withdrawl

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Newbie

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Replies 4

Hi everyone,

 

What is the maximum withdrawal I can make from the FHSS Scheme in one financial year?

 

For example:

In 2019, I contribute $15,000 (salary-sacrificed, through employer).

In 2020, I contribute $15,000 (salary-sacrificed, through employer).

Now if I am buying a property, say in 2021, can I withdraw the $30,000 at one go, or do I have a maximum limit on how much I can withdraw in one financial year (e.g. maximum I can withdraw in 2021)?

 

Thank you. 

 

           

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Best answer

ATO Certified

Enthusiast Super Specialist

Replies 3

Hi @Badru

 

The FHSS maximum release amount is the sum of your eligible contributions, taking into account the yearly and total limits, and associated earnings.

 

This amount includes:

  • 100% of eligible non-concessional contributions
  • 85% of eligible concessional contributions
  • associated earnings calculated on these contributions using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points (shortfall interest charge rate).

 

The FHSS maximum release amount takes into account the $15,000 limit from any one year and $30,000 total limit to the total contributions across all years when calculating the eligible contributions, before adding the associated earnings.

 

You can request a release of the FHSS maximum release amount provided in your FHSS determination or choose a lower amount.

 

Please keep in mind, once you have requested a release you can't request another one, even if you have requested an amount less than your FHSS maximum release amount.

 

For the steps required to release your funds, please take a look at the ATO’s Applying to release your savings page.

 

Thanks,

Mark

4 REPLIES 4

Best answer

ATO Certified

Enthusiast Super Specialist

Replies 3

Hi @Badru

 

The FHSS maximum release amount is the sum of your eligible contributions, taking into account the yearly and total limits, and associated earnings.

 

This amount includes:

  • 100% of eligible non-concessional contributions
  • 85% of eligible concessional contributions
  • associated earnings calculated on these contributions using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points (shortfall interest charge rate).

 

The FHSS maximum release amount takes into account the $15,000 limit from any one year and $30,000 total limit to the total contributions across all years when calculating the eligible contributions, before adding the associated earnings.

 

You can request a release of the FHSS maximum release amount provided in your FHSS determination or choose a lower amount.

 

Please keep in mind, once you have requested a release you can't request another one, even if you have requested an amount less than your FHSS maximum release amount.

 

For the steps required to release your funds, please take a look at the ATO’s Applying to release your savings page.

 

Thanks,

Mark

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Newbie

Replies 2

Hi Mark,

 

Thank you for your response.

Simply explained, what is the difference between concessional and non-concessional contribution? While I have read the definition of it in several places, I am still quite confused about them. 

Thanks. 

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ATO Certified

Community Support

Replies 1

Hi @Badru

 

Thanks for your reply.

 

There are two types of contributions that you can make towards the FHSS scheme:

  • voluntary concessional contributions – including salary sacrifice amounts or contributions for which a tax deduction has been claimed, these are usually taxed at 15% in your fund
  • voluntary non-concessional contributions that you have made – these are made after tax or if a tax deduction has not been claimed.

 

For more information about the FHSS scheme and how you can save in super, check out our website.

 

The example in your first post outlined a total of $30,000 of voluntary contributions over two financial years:

  • $15,000 in the 2019 income year via a salary sacrifice arrangement
  • $15,000 in the 2020 income year via a salary sacrifice arrangement.

 

When you make a contribution to your super fund via a salary sacrifice arrangement, the amounts are deducted from your gross (before tax) salary. You don't pay personal income tax on these amounts.

 

When your super fund receives the salary sacrificed contributions, they are required to withhold 15% which is a concessional tax rate. In turn, they are considered to be concessional contributions.

 

When you submit your FHSS release request, only 85% of your voluntary concessional contributions will be included in your FHSS maximum release amount. You can't withdraw the other 15% because that is the tax that your super fund has already paid.

 

The reason why you can withdraw 100% of your voluntary non-concessional contributions is because there is no tax withheld from these contributions by your super fund.

 

Hope this helps.

 

Thanks,

 

ChrisR

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Newbie

Replies 0

Hi Chris,

 

This helps heaps! Thanks so much!