First Home Super Saver scheme explained

. 2 min read

Australians are entering the housing market later in life than previous generations. With high house prices, difficulties in saving for a deposit have become a key barrier to getting into the property market. In this article, we look at the newly announced First Home Super Saver scheme by the Federal Government.

What is the first home super saver scheme?

Proposed in the 2017 federal budget by treasurer Scott Morrison on Tuesday 9th May the initiative will soon allow workers saving for their first home to boost their superannuation contributions by up to $15,000 a year and $30,000 in total on top of the regular 9.5% super contribution also known as Super Guarantee.

How will the first home super account work?

Contributions could be made from the 1st of July 2017 and withdrawals can be made from the 1st of July 2018.

For couples, both individuals can take advantage of the scheme. Which means that a couple could save up to $60,000 through the First Home Super Saver Scheme.

Will the First Home Super Account help?

Saving for a deposit is tough especially for first home buyers. This scheme which will cost the federal government over $250 million will provide a helping hand for entry level buyers. This is better than no scheme or support.

What is the real dollar value of the First Home Super Account?

We did some extensive research and even got in touch with the Department of Treasury to get some estimated numbers.

The following numbers were gathered from https://budget.gov.au/estimator/

For an individual earning an annual income of $50K

Annual total sacrifice amount Reduction in your take home pay Available withdrawal amount when you reach the $30K cap in contributions The dollar amount gained compared to having this in a standard savings account
$15,000 $9900 $25,429 $5375
$10,000 $6400 $25,608 $6089
$5000 $3200 $27,639 $7795

For an individual earning an annual income of $65K

Annual total sacrifice amount Reduction in your take home pay Available withdrawal amount when you reach the $30K cap in contributions The dollar amount gained compared to having this in a standard savings account
$15,000 $9600 $25,280 $5834
$10,000 $6400 $25,833 $6314
$5000 $3200 $27,754 $7910

For an individual earning an annual income of $80K

Annual total sacrifice amount Reduction in your take home pay Available withdrawal amount when you reach the $30K cap in contributions The dollar amount gained compared to having this in a standard savings account
$15,000 $9800 $25,292 $5432
$10,000 $6550 $25,542 $5555
$5000 $3275 $27,179 $6849

For an individual earning an annual income of $95K

Annual total sacrifice amount Reduction in your take home pay Available withdrawal amount when you reach the $30K cap in contributions The dollar amount gained compared to having this in a standard savings account
$15,000 $9465 $24,642 $5481
$10,000 $6190 $24,864 $6006
$5000 $3050 $26,639 $7764

Things to consider

There is no clarity as to whether the scheme would allow contributors to withdraw funds for anything other than to purchase a live-in property.

We have contacted the department so watch this space for more about the First Home Super Saver Scheme.

If you are saving for a house deposit also consider reading: How to turbocharge your home deposit savings plan