Downsizer contributions skyrocket

The superannuation industry has reaped an additional $1 billion since the downsizer contribution was introduced one year ago.

More than 4200 individuals have used the downsizer measure, according to Federal Treasury figures.

Older Australians living in New South Wales (31%), Victoria (26%) and Queensland (24%) have been fully embracing the initiative since it was proposed in the 2017-18 Budget as part of the Coalition Government's package of reforms to reduce pressure on housing affordability.

Since commencing on 1 July 2018, 65 year olds and older could sell or downsize their homes and contribute proceeds of up to $300,000 to their superannuation.

Members will have 90 days after settlement to make the contribution, but can seek an extension from the ATO.

It is not a non-concessional contribution and will not count towards the contributions caps. The downsizer contribution can still be made even if the member has a total super balance greater than $1.6 million.

However, it is counted towards the transfer balance cap of $1.6 million, which applies when the member moves their super savings into retirement phase. It is not exempt from the Age Pension means test.

Minister for Housing and Assistant Treasurer Michael Sukkar said: "I am pleased to announce that contributions have reached $1 billion."

Read more: Age PensionMichael SukkarATO
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