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How much can I save for a home with the new super scheme?

I refer to the new first-home super saver scheme. Are the contributions subject to the cap on concessional contributions that will drop to $25,000 a year from July 1? I have been told that they are counted within the cap, but that does not seem logical.
Nanjing Night Net

Yes, they do count within the concessional cap and I agree that this does not seem logical. After all, the purpose of the caps on contributions is to prevent people building up large sums in the low-tax superannuation environment, while the stated aim of the new scheme is to encourage first-home buyers to save money that can be withdrawn as soon as practicable for a deposit on their home. Furthermore, the total contributions that can be made to the scheme are $30,000 and they are subject to a 15 per cent tax on entry and earnings, while withdrawals are taxed at the individual’s marginal rate with a rebate of 30 percentage points (ie. someone on a 37 per cent marginal rate would pay 7 per cent on withdrawal). Maybe the purpose of making the contributions count for the cap is to reduce eligibility for higher income earners.

Recently you stated that withdrawals from superannuation are not taxable nor are they treated as income for Centrelink purposes. My understanding was that Centrelink does regard lump sum withdrawals from superannuation as income for the purpose of age pensions. I am 66 and on an age pension. I have both an accumulation fund and a transition to retirement fund with Unisuper and wish to withdraw a significant amount from both to pay credit card and mortgage debt but have been reluctant to do so due to anecdotal advice that my pension would be affected.

Capital withdrawals from superannuation are not income for Centrelink purposes. But, the capital withdrawal may affect a person’s income support payments depending on how they use the withdrawn capital. For example, using the capital withdrawal to pay off a credit card would reduce assessable assets and may result in greater pension payments. If the capital withdrawal is from a grandfathered account-based income stream the withdrawal would reduce the deductible amount, as well as the value of the assessable asset.

I am 60 and have not been in paid employment for many years. Over the last 10 years, since all my income is from investments, I have been able to make tax-deductible super contributions to my self-managed super fund. I am wondering, given my long term non-employment status, how I can satisfy a condition of release to access my super without returning to the workforce? Or do I just have to wait until I’m 65?

Once a person has reached 60 they can satisfy a condition of release by resigning from a job, it need not be their main job, or by advising their fund that they have retired permanently. In your case the second option would be the appropriate one.

Much is talked about regarding superannuation as you get older but my question is, should teenagers who work part-time start contributing to a superannuation fund straight away or wait until they have finished university or have their first full-time job?

Given it will be at least 40 years before a teenager can access their superannuation, and many more rule changes are highly likely, it is my recommendation that teenagers invest outside the superannuation system, and focus their attention on developing good money management skills. If they do this, they should accumulate enough wealth in their lifetime that any employer superannuation is a bonus.

I am almost 16 and earn $210 per week on average as a casual retail worker, being paid superannuation as well. Would it be worth salary sacrificing $500 a year into my super?

The problem is that salary sacrificed contributions lose 15 per cent contributions tax, whereas your income loses zero. Therefore, if you wish to contribute to superannuation a better option would be to simply make a $500 non-concessional contribution. This will also make you eligible for a government co-contribution of $250. The result is that you would have $750 working for you instead of $500 less 15 per cent.

My son has left Australia for overseas and has taken up permanent residence abroad. We don’t ever expect to see him back in Australia. He has a superannuation account here from his former working days. Although he is nowhere near retirement age, can he close the account and take his money overseas? Otherwise, it will just sit and waste away in an account here over the years.

The current regulations prevent him taking his money out but there is no need to let it “waste away”. Talk to a good adviser about a superannuation fund that has a good choice of assets, and fits his goals and his risk profile. If he is young it should be growth oriented.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: [email protected]南京夜网419论坛.

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