Fun facts

Accessing FHSS release increase

Article published on: 19-07-2022

Mary has been making personal deductible contributions of $15,000 per annum over the past five years into her super fund. She applied for and received a First Home Super Saver (FHSS) determination from the ATO in May 2022. She thinks she may have found her ideal home and wants to confirm she is able to have the maximum amount of $50,000 released, as a contract will be signed after 1 July 2022.

Which of the below is correct?

A) Mary is only able to access a maximum of $30,000 as the determination was made in 2021/22, and determinations can only be applied for once under the scheme.

B) Mary needs to apply to the ATO for another determination before requesting a release authority, as the $50,000 limit on eligible contributions only applies to requests for determinations made from 1 July 2022. There is no limit as to how many determinations an individual can apply for.

C) Mary can request the release of a maximum amount of $30,000 based on the first determination received in the 2021/22 year. After that, Mary can submit another determination and request to release the additional $20,000 for 2022/23.

D) Mary must indicate she is wanting to access the maximum releasable amount on the release request. The ATO automatically applies the applicable maximum at the time of request (ie $50,000) if funds are available in her account.

Answer - B

To have eligible funds released under the scheme, the individual needs to:

apply to the ATO for a determination stating the maximum amount that can be withdrawn, and
request a release authority.

It is important to note an individual may request multiple determinations over time but may only make one release request. You can make your release request within 14 days of signing a property contract. However, you must have a FHSS determination before you sign any property contract.

Each of the above steps are explained in more detail below.

Apply for determination

The $50,000 limit on eligible contributions only applies to requests for determinations made from 1 July 2022. The $50,000 limit does not apply to determinations made prior to 1 July 2022. This means Mary must apply for a new determination if she wants to access the $50,000.

A request to the ATO for a determination must be done using the approved form. The ATO then calculates the individual’s eligible voluntary contributions since 1 July 2017, as well as the associated earnings. The total amount eligible for release under the scheme is referred to as the ‘FHSS maximum release amount’.

A person must request and receive a FHSS determination prior to signing a contract to purchase a home. In Mary’s case, she thinks she has found the right property, but would need to ensure she has received a new determination prior to entering the contract. For example, if Mary is successful at the auction and signs the contract that day without receiving an updated determination, she is limited to the maximum amount under the original determination already received (ie $30,000).

Request release authority

Once a determination is received, the individual may request the ATO issue a release authority to their super fund(s) for all or part of the maximum release amount. An individual can only make one request for an amount to be released.

For further information, please refer to our FHSS Scheme article or the ATO.

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