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  • CRT Alert 064/2018

    5 July 2018

    Housing affordability measures update

    This information is about your reporting obligations in relation to ineligible Downsizing contributions, and clarification on the First home super saver (FHSS) processes for release authorities and recontributed amounts.

    What you need to know about ineligible Downsizing contributions

    There will be instances where a member’s downsizer contribution, or a part of a member’s downsizer contribution has been identified by our validation and notification process as ineligible.

    What you need to do

    In these circumstances, you will need to assess whether these contributions could have been accepted as another contribution type under 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 and 5.03(1) of the Retirement Savings Accounts Regulations 1997.

    Clarification on the age work test

    Where the member would have met the age and work test you will need to take the following action:

    • cancel or amend the original downsizer contribution to $0
    • re-report the contribution, or that part of the contribution that is ineligible as a Personal contribution.

    This applies even if the member has left the fund or is in pension phase.

    Where the member would not have met the age and work test you will need to:

    • cancel or amend the downsizer contribution to $0
    • return the amount to the member.

    Re-reporting ineligible downsizer contributions as a personal contribution may result in some members exceeding their non-concessional contributions cap.

    If the member’s contribution information is not re-reported to us within the required timeframe we will notify APRA, and advise you of this in writing.

    See also:

    What you need to know about FHSS processes

    FHSS Release Authorities

    From 1 July, FHSS Release authorities can be received and actioned in the same manner as other Release Authorities with regards to proportioning rules, insufficient balances, exemption of defined benefit interests and Constitutionally Protected Fund accounts.

    However, FHSS Release Authority Statements need to be actioned within 10 business days, rather than the current extended 20 day period for other Release Authorities.

    Correct postal address

    The postal address to return these statements is PO Box 3578 Albury NSW (the same return address used for other Release Authorities).

    We understand that at a recent stakeholder forum, an incorrect address had been quoted. We apologise for this error.

    Recontributed FHSS released amounts

    If a member elects to recontribute FHSS released amounts into a fund, there is no need to identify that the amount represents a re-contribution of the FHSS released amounts. Your members are required by law to notify us if they recontribute the amounts via the approved form.

    Your members can recontribute these amounts as single or multiple amounts, which will be treated as new non-concessional contributions to the fund so that:

    • they count towards the non-concessional caps in the year they are made
    • members are not able to claim deductions in respect of the recontributed amounts.

    See also:

      Last modified: 06 Jul 2018QC 56202