HIT A $300K (OR $600K) HOME RUN

While everyone was partying on January 1, eligibility for the downsizer contribution was further reduced to age 55, giving more people the ability to top up their super from the proceeds of the sale of the family home.

You can contribute up to $300,000, or $600,000 per couple, providing you’ve owned the family home for at least 10 years. The contribution cannot exceed the sale price and must be made within 90 days of change of ownership.

Downsizer contributions don’t count towards your concessional or nonconcessional contribution caps and there’s no age limit and no requirement to meet the work test.

“People 55 and over may not have had the super guarantee their entire working life,” says planner Marisa Broome. “They’re the forgotten generation the government is trying to help. They can’t access the age pension until 67 and they don’t have enough super to live on. It’s trying to help those people be more self-sufficient in retirement.”

“If a couple own a $3 million house and decided to downsize, they could contribute $300,000 each, plus $330,000 each under the bring-forward rule.

“If have access to a large sum of money – sold your home, or business, or inherited money – you can bring forward three years’ worth of non-concessional contributions provided that you are under 75.

“The downsizer is a very powerful way for anyone with a low super balance to boost it. You don’t even have to buy a cheaper home,” says Broome.

O’Halloran says anyone considering making a downsizer contribution should seek independent financial advice first as there may be far-reaching implications.

For more information see ato.gov.au/Individuals/Super/In-detail/Growing-your-super/ Downsizer-contributions-for-individuals.

Vita Palestrant was editor of the Money section of the Sydney Morning Herald and the Age. She has worked on major newspapers overseas.