Scott Pape on the First Home Super Saver Scheme: From 'Yeah' to 'Meh'
WHEN a reader asked Barefoot Investor why her super company didn’t know much about the new first home buyers saver fund, he was compelled to investigate.
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I’M a little ‘dusty’ as I write this. You see, as a card-carrying DIK (Dad I Know), I don’t get many leave passes from my wife ... so when I got an invitation to an EOFY (End of Financial Year) finance shindig, I couldn’t pass it up.
After all, the EOFY is the one time of the year it’s socially acceptable for bean-counters to get on the grog.
You can picture it, can’t you?
Sharon was in the storeroom dishing out Cabcharges like party pills. Craig had a shandy. And late in the night Dennis got loose and moved his superannuation investment option from ‘balanced’ to ‘high growth’.
Boom!
So today I’m a little like a bear with a sore head.
And when I’m hungover, my tonic of choice is to call Treasury and talk tax policy on behalf of a reader.
PAULA’S PROBLEM
I GOT this question from Paula last week:
Hi Scott,
I’ve been reading your newspaper column since I was in primary school (my dad got me into it)! Now I am studying nursing at university, working part-time in aged care, and saving for a home. I am very interested in setting up a new ‘home super saver account’. However, I called up my super fund (HESTA) and they don’t seem to know much about it, and they actually said it won’t come in ’til next year. Can you please clear this up for me?
Paula
My first reaction was “hell, have I been doing it for that long”?
My second reaction was, on Paula’s behalf, to follow up on the progress of the First Home Super Saver Scheme (which, if you remember, I talked about in my column some time ago).
What I found is that it looks about as well planned as my son’s finger-painting, currently stuck on our fridge:
“What do you think of my picture, Daddy?”
“Oh that is beautiful! It’s a ... truck ... right?”
“No! It’s a picture of you and mummy riding a horse.”
“Oh, yes! So it is!”
A quick refresher for those of you in the back row:
The First Home Super Saver Scheme was announced by our Treasurer on Budget night as a $250 million air kiss to housing affordability. As ScoMo crowed on the night, by making voluntary contributions of up to $15,000 per year and $30,000 in total, “most first home savers will be able to accelerate their savings by at least 30 per cent”. For an average earning couple it’s worth an additional $12,000.
BAREFOOT INVESTOR ON FIRST HOME BUYERS SUPERANNUATION POLICY
FROM ‘YEAH!’ TO ‘MEH’
THAT was in May.
The First Home Super Saver Scheme is set to launch today but, like Paula mentioned, none of the super funds I spoke to had the foggiest. And after speaking to Canberra, I worked out why.
The Government has had a bit of legislative constipation — the scheme hasn’t yet been passed into law. A spokesman for the Treasurer said they were adamant it would be tabled in the spring session of Parliament, and that it would be passed.
Fair enough. But, to my mind, there’s a lot of uncertainty around it.
So should you open one up?
Maybe (and, of course, only if it actually makes it into law).
You could consider opening a First Home Super Saver if you’re planning on buying a home in the next few years, and you already have a decent deposit. After all, it could be worth $12,628 extra to an average earning couple, compared to savings in the bank. Not bad.
However, since the Government announced these accounts I’ve had a lot of well-meaning parents and grandparents — not to mention savvy young savers like Paula — write and ask about opening one up for the long term.
My advice?
Don’t touch it.
Quite apart from the fact that the Government is still in need of some legislative laxatives, what happens if the current mob is voted out and the new mob decides to ‘ghost’ the First Home Super Saver Scheme (like you did with that mummy’s boy you dated twice in 2004)?
Well, if the scheme were scrapped, it’s possible your savings could be locked up in your super until you retire.
So, Paula, all I can say right now is: watch this space.
Tread Your Own Path!
Read more Barefoot Investor
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Couples need to share their money if they are going to share a life
Sort debts and savings before looking at the housing market
Originally published as Scott Pape on the First Home Super Saver Scheme: From 'Yeah' to 'Meh'
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