Last Updated: 16th May, 2024

The First Home Super Saver Scheme (FHSSS) is an Australian Government initiative aimed at helping first-home buyers save for their first property purchase. It was introduced in the 2017-18 federal budget. Under the FHSSS, you are using your super either as a deposit or as genuine savings, to help buy your first home. The scheme allows you to make voluntary contributions to your superannuation and use those contributions, plus whatever returns they generate, to help make a deposit on your first home. As of July 2022, each person applying for a home loan can save and withdraw up to $50,000 (plus associated earnings) from their super fund to help buy a home under the FHSSS (meaning couples buying a home together can save and withdraw a total of $100,000, plus associated earnings. In this article, we will cover the eligibility requirements for the First Home Super Saver Scheme (FHSSS), its benefits, how to make contributions, and the process to apply for the scheme. We also highlight how you can get early access to super due to financial hardship and provide alternatives to the FHSSS that first-home buyers can explore.

What Are The Eligibility Criteria For The FHSSS?

To be eligible for the First Home Super Saver Scheme, you must:
  • Be 18 years or older.
  • Be a first-home buyer who has never owned property in Australia.
  • Live in the property you buy for at least six months within the first 12 months you own it.
  • Not have made an FHSSS release request.

Do I Have To Be An Australian Citizen?

No. You don’t have to be an Australian citizen or an Australian resident for tax purposes to use the FHSSS.

Early Access To Super Due To Financial Hardship

You can access your super if you are experiencing severe financial hardship. You will have to talk to your super fund to request early access due to financial hardship. There are no special tax rates. If you are under 60 years old, withdrawals are taxed between 17% and 22%. If you’re over 60 years old, you won’t be taxed unless the lump sum includes an untaxed element.

Who Is Eligible For Early Access To Super Due To Financial Hardship?

  • If you’re under the preservation age plus 39 weeks and:
  • If you’ve reached the preservation age plus 39 weeks:
Note: Your preservation age is the age when you can access your super if you’re retired, or are starting to transition to a retirement income stream.

How To Apply?

You will have to apply directly to your super fund. The ATO will not process any hardship requests. You can call Services Australia to request a letter from them. The letter will outline if you’ve met the requirements for financial hardship and is valid for 21 days. You will need to give the letter to the super fund within 21 days so they can come to a decision on whether you can access your super early.

What Are The Benefits Of The FHSSS?

The First Home Super Saver Scheme (FHSSS) offers several benefits to first-home buyers, including tax concessions and a higher rate of return on savings. Some of the key benefits of the FHSSS are:
  • Tax savings: Contributions made under the FHSSS are taxed at a lower rate than savings outside of super.
  • Joint use: If you’re applying with a partner, the two of you can withdraw a combined total of $100,000 as a deposit towards the same house.
  • Withdrawal flexibility: The amount you can withdraw is not affected by falling markets. As long as there’s enough in your account, you can withdraw.
  • Concessional contributions: As both before-tax and after-tax contributions are allowed, you can save for your first home more effectively.

How To Make Contributions To The FHSSS

There are two ways you can make eligible contributions to the FHSSS:
  • 1. Enter a salary-sacrifice arrangement with your employer to make voluntary concessional contributions.
  • 2. Make voluntary personal contributions, which will be concessional if you claim an income tax deduction.

What Are Ineligible Contributions?

The following contributions are ineligible and cannot be included in the determination of your FHSSS balance:
  • Your employer’s compulsory contributions
  • Contributions required by workplace agreements or unions
  • Voluntary contributions made by others on your behalf
  • Money transferred from another person’s super
  • Government co-contributions
  • Amounts received due to legal settlements
  • Contributions related to capital gains tax concessions
  • Transfers or rollovers of amounts from other superannuation funds are generally not eligible.
  • Contributions that exceed the annual concessional (before-tax) and non-concessional (after-tax) caps

Process For FHSSS Release For Property Purchase

You will need to apply with the ATO to receive your FHSS amounts for property purchase. It’s a two-step process:
  • 1. Apply for an FHSSS determination
  • 2. Apply for a release
You must have an FHSSS determination before you sign a contract to buy property.

Applying For FHSSS Determination

Requesting a Determination

  • If you don’t have a myGov account, create one and link it to the ATO.
  • Log in to myGov and select the Australian Taxation Office.
  • Navigate to Super, then Manage, and finally First Home Saver.

FHSSS Determination Application

  • When applying for an FHSSS determination, your maximum release amount will be provided.
  • Include only eligible contributions in the request.
  • Use the dates your super fund received the contributions.
  • Verify and, if necessary, correct pre-filled contribution details in the online request.
  • If adding non-pre-filled contributions, confirm dates, amounts and types using your super fund statement or transaction list.

Tips When Requesting FHSSS Determination