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First home super saver scheme - Non concessional Contribution

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Hi,

 

I would like to understand how I can make a lump sum contribution of $15000 into my super for the first home super saver?
As the contribution will be from my personal saving which would be after-tax contribution, will I still get tax an additional 15%

by my super?

 

Also, I would like to find out is doing a lump sum contribution the same as the normal route through salary sacrifice?

Will I end up paying more tax by doing a lump sum contribution?

 

Thank you.

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Devotee

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Hi first-home12345

 

Your super fund will have information on how you can make a personal contribution to your account.

 

The default setting is for a personal contribution to be treated as a non-concessional contribution by the fund. In this case the fund won't deduct any tax from the contributions.

 

However, in most cases funds are able to accept deductible personal contributions from members. Members will be able to notify their fund of their intent to claim a deduction for the personal contributions. In this situation the fund changes the nature of the personal contributions from non-concessional to concessional. The 15% tax is then payable on these contributions.

 

If you claim a deduction for the personal contributions you then won't be paying income tax on that amount. This will put you in the same position as if you'd entered into a salary sacrifice arrangement to make the contributions to your super account. The difference is that under a salary sacrifice arrangement the tax saving occurs each payday rather than once the income tax return is processed.

 

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Best answer

ATO Certified

Devotee

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Hi first-home12345

 

Your super fund will have information on how you can make a personal contribution to your account.

 

The default setting is for a personal contribution to be treated as a non-concessional contribution by the fund. In this case the fund won't deduct any tax from the contributions.

 

However, in most cases funds are able to accept deductible personal contributions from members. Members will be able to notify their fund of their intent to claim a deduction for the personal contributions. In this situation the fund changes the nature of the personal contributions from non-concessional to concessional. The 15% tax is then payable on these contributions.

 

If you claim a deduction for the personal contributions you then won't be paying income tax on that amount. This will put you in the same position as if you'd entered into a salary sacrifice arrangement to make the contributions to your super account. The difference is that under a salary sacrifice arrangement the tax saving occurs each payday rather than once the income tax return is processed.

 

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Newbie

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Hi SebReiter,

 

Sorry, I took sometime to do more research into which method of contributing into FHSSS will be the most suitable for my situation.

There seems to be three methods people can make contribution into super fund for FHSSS.

1. Non-concessional contribution which is after tax

2. Concessional contribution from after tax personal contribution (deductibe for tax person)

3. Concessional contribution from salary sacrifice

 

Questions:

1. For the first method from above, is it correct to say non-concessional contribution is not tax deductible? If so, contributing into super
in the form of non-concessional contribution would defeat the tax saving purpose of FHSSS?

 

2. My wife is a stay home mum. Is it possible for me to contribute her part of FHSSS instead?

 

Kind regards

 

Devotee

Replies 0

Hi again

 

Well, it’s up to you if you decide to claim a tax deduction for a non-concessional contribution you make to your super account. Nearly all funds will let you lodge a notice of intent to claim a tax deduction for these contributions. If you do this the contribution will become a concessional contribution.

 

But yes, if you make a non-concessional contribution and you don’t lodge a notice of intent you won’t save any income tax from making the contribution. So it’ll be very similar to placing the money into a bank account rather than a super account.

 

In relation to FHSS savings for your wife - the contributions would need to go into an account in her name. You wouldn’t be able to claim a tax deduction for contributions made to her account. She’d be able to - but then she’d need income to be able to make use of the deduction to get the tax advantage.

 

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