Legislation passes reducing downsizer eligibility age to 55
Legislation reducing the eligibility age to make a downsizer super contribution from 60 to 55 has passed and awaits Royal Assent.
The commencement date is 1 January 2023 if Royal Assent is received prior to this date, otherwise it is likely to be 1 April. We will update you when the commencement date is confirmed.
All other eligibility requirements for downsizer contributions remain unchanged.
Eligible downsizer contributions must be made within 90 days after settlement occurring. This means if the age requirements are met within that 90 day period, the opportunity to make a downsizer contribution exists. Clients aged 55 to 59 should not make downsizer super contributions before the confirmed commencement date, as the contribution will be an invalid downsizer contribution.
For example, let’s assume the:
- commencement date for the legislation is 1 January 2023 and all eligibility criteria is met
- client is aged 58 and sold their home on 3 September 2022, and
- property settled on 15 October 2022.
The contribution must be paid within 90 days from settlement which is by 13 January 2023. For this client, the contribution would need to be made on or after 1 January but before 13 January 2023.
Note that while the ATO has discretion to provide an extension to the 90 day window to make a downsizer contribution, it has stated that an extension will not be provided to enable a person to meet the age requirement.
It is also important to note that a valid notice to treat the contribution as a downsizer contribution must be submitted no later than the time the contribution is received by the fund. It is not possible to retrospectively elect to treat a personal contribution as a downsizer contribution.
Important information: The information has been prepared on behalf of IOOF Investment Services Ltd (IISL) ABN 80 007 350 405, AFSL 230703, based on information that is believed to be accurate and reliable at the time of publication. IISL is a company within Insignia Financial Group (formerly IOOF Holdings) Ltd ABN 49 100 103 722 and its related bodies corporate.