Downsizer announcement creating confusion for members
A proposal announced before the election has led to some confusion around what the age limit is for downsizer contributions.
In a recent update, the ATO reminded super funds and their members that from 1 July 2022, individuals aged 60 years and over will be eligible to make downsizer contributions of up to $300,000 per person or $600,000 per couple from the sale proceeds of their home into their super.
In the lead up to the 2022 Federal Election, the government announced that it would support a further reduction to the downsizer eligibility age to 55 years.
While this was only an announcement and is not yet law, the ATO said this has caused some confusion for super funds and their members.
The ATO has recommended large APRA-regulated funds to advise their members that any contributions made from members who are 55 to 59 years old will be ineligible for treatment as downsizer contributions.
“These contributions, if they can otherwise be accepted, will need to be reported as personal contributions which may result in members exceeding their non-concessional contributions cap.”
The ATO noted that where an individual is eligible for downsizer contributions, these contributions will not impact or count towards their concessional or non-concessional super contribution caps.
It also reminded super funds that they will need to receive a downsizer contribution form from the member — either when they make the contribution or before.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
