Confirmed: Miniscule numbers accessing FHSSS

Fewer than 3% of superannuation fund members have sought to access the First Home Super Savers Scheme which is likely to be in jeopardy under the Government’s proposed Objective of Superannuation arrangements.

As the Government and the Federal Opposition prepare to battle it out over both the early release of superannuation and the use of superannuation for home ownership, superannuation fund executives have confirmed to Financial Newswire that nearly a year after it was introduced, the FHSSS the level of interest from members has been relatively modest.

And the relatively modest uptake comes despite the fact that virtually all the major superannuation funds have actively promoted the availability of the FHSSS which came into effect as of 1 July, last year.

Definitive figures around take-up of the scheme will be included in the May Federal Budget.

Under the scheme, introduced by the former Morrison Coalition Government, superannuation fund members are eligible to access up to $50,000 from their voluntary contributions on the basis of having contributed up to $15,000 a year and $50,000 in total.

Superannuation funds such as Aware Super have promoted the scheme to members on the basis that the “good part is that because you’re saving through super, you pay less than if you were saving outside of super, which means you could build a bigger deposit more quickly”.

“To start saving for your deposit, all you have to do is make additional contributions (either by making a salary sacrifice before-tax contribution or voluntary after-tax contribution) into your super each year, within the annual contribution limits,” the superannuation fund said.

For its part, retail industry fund, REST Super has promoted the scheme to members on the basis that it will allow them to save faster.

“First home buyers may be able to use their super as a tax-effective way to save for part of their home deposit. The concessional tax treatment of super may help first home buyers save faster,” it said.

However, superannuation fund chief executives and consultants told Financial Newswire that, at most, they had seen less than two dozen member applications relating to the scheme.

“The numbers are not even high enough to warrant serious inclusion on the fund trustee board papers,” one consultant said.

The level of interest in the scheme appeared to depend on membership demographics, with funds with higher numbers of younger, trades-oriented members reporting higher take-up than those with older, white collar members.