HESTA’s 44% downsizer contributions increase

Industry fund HESTA has revealed the degree to which it has leveraged the Federal Government’s downsizer contribution as part of its retirement incomes advice to members.

The fund has announced that it saw downsizer contributions increase by 44% from 2023 to 2024.

HESTA chief executive, Debby Blakey said the fund was seeing more members strategically using the downsizer contribution to strengthen their financial position in retirement.

Her comments came as the fund said it is forecasting a record spring for downsizer contributions following a surge in activity earlier this year.

The fund said that the spring selling season usually delivered the highest volume of contributions each year.

Blakey said the surge in downsizer contributions reflected the evolving approaches to retirement planning. Since the policy was introduced in July 2018, the fund has seen down sizer contributions grow from $29.1 million in its first full year in 2019 to $89.5 million in 2024.

“We’re seeing more members strategically using the downsizer contribution to strengthen their financial position in retirement,” Blakey said.

“As we head into what is traditionally the most active period in the property market, we expect the momentum to build.

“The strong Autumn results suggest many Australians are recognising this as an opportunity to simultaneously unlock housing equity and boost their super in a tax-effective way. In doing so, it can help improve the flow of much-needed housing stock, particularly of family homes.

“While there is potentially great opportunity through the policy, we do recommend members seek advice before making any decisions as there are a number of considerations that can impact outcomes.”

“It’s never too early or too late to start planning for retirement, and I encourage all our members to take advantage of the guidance and financial advice available to them as part of their HESTA membership. Small changes today can make a meaningful difference to retirement outcomes.”

Under the policy, eligible individuals aged 55 and over can contribute up to $300,000 from their home sale into superannuation, with couples able to contribute up to $600,000 combined. These contributions can be made regardless of retirement status or existing super balance, and don’t impact contribution caps .

Through the policy members can contribute even if they’re retired or have a high balance, making it possibly the last opportunity for some to make a significant super contribution.

However, there are several considerations to weigh as the decision can impact various aspects of retirement planning, including Age Pension, Centrelink benefits and future housing needs.