The First Home Super Saver Scheme contained in Tuesday’s federal budget could create administration problems for superannuation funds, says ASFA.
In Tuesday's federal budget, the government unveiled its First Home Super Saver Scheme, which will allow younger Australians to save money for a house deposit within their superannuation fund.
Under the scheme, individuals will be allowed to make voluntary contributions of up to $15,000 per year and $30,000 in total.
Contributions and earnings will be taxed at 15 per cent, and when the money is withdrawn to pay for a house deposit it will be taxed at the individual's marginal rate less 30 percentage points.
But because the scheme will be administered by the Australian Taxation Office (ATO), superannuation funds will be unaware of how much money is at risk of being withdrawn as part of the scheme, leading to potential problems with liquidity provisioning.
Superannuation consultant Rice Warner said there is not much time to put the scheme in place, given that it will start on 1 July 2017.
"From a fund perspective, the amounts received will distort areas such as reserves and asset allocation. While the amounts will be a relatively small share of all assets, it is another imposition on a fund," said Rice Warner.
"The timing of the payment of the deposit will be interesting. If someone buys at auction and needs a 5 per cent deposit, at what time do they draw the money? Presumably, the ATO will need proof of purchase before releasing the deposit," said Rice Warner.
Association of Superannuation Funds of Australia chief executive Martin Fahy said it was important that the scheme not impose any "significant administrative burden on super funds".
"This would lead to higher costs for all fund members. In light of this, we will need to work with the government to address any administrative issues," Mr Fahy said.
APRA has announced that it will watch super funds more closely and has not ruled out naming and shaming underperforming funds. ...
The head of Australia’s largest industry superfund has warned of the significant changes afoot for those working with other people’s ret...
AMP has reported seeing a spike in queries about early access to super in February. ...