Australia markets closed

    +8.90 (+0.11%)

    -0.0011 (-0.16%)
  • ASX 200

    +9.20 (+0.12%)
  • OIL

    -0.25 (-0.33%)
  • GOLD

    -8.80 (-0.43%)
  • Bitcoin AUD

    -786.01 (-1.00%)
  • CMC Crypto 200

    0.00 (0.00%)

Budget 2022: $300k superannuation boost for these Aussies

Budget 2022: A composite image of money and an elderly couple to represent superannuation.
Budget 2022: Older Aussies will be able to boost their superannuation sooner if they sell their family home. (Source: Getty)

Aussies aged over 55 will be able to score a $300,000 boost to their superannuation by downsizing, under a new plan released in the Federal Budget.

Treasurer Jim Chalmers said the plan was aimed at freeing up housing stock for younger families.

The Government has extended the exemption of home sale proceeds from pension asset testing, from 12 months to 24 months.

More Budget news:

This will give pensioners more time to purchase, build or renovate a new home before their pension is affected.

In addition, the Government is expanding access to downsizer superannuation contributions for people aged 55 to 59.

Doing this would mean Aussies over 55 could contribute an extra $300,000 to their superannuation.

Being able to contribute an extra $300,000 to your super can also translate to a much higher balance, come retirement, because of the additional five years of interest on that investment.

For example, a 60-year-old earning $90,000 a year with an average super balance of $359,870 would retire at 67 with $498,368.

But a 60-year-old who sold their family home and contributed the full $300,000 allowed would retire with $851,688 - more than $353,000 more.

To compare, someone who sold the family home to make the extra contribution at 65 years old would retire with $725,887.

Younger Aussies also able to use super for homeownership

The First Home Super Saver Scheme (FHSSS) is designed to help Australians boost their savings for a first home by allowing them to build a deposit inside their superannuation.

Aussies who take advantage of the scheme are also rewarded with a tax cut.

The previous government’s Budget in March this year increased the amount first home buyers could contribute and withdraw from their super to buy a home to $50,000.

From July 1, 2022, the maximum amount of voluntary contributions that could be released under the FHSSS was increased to $50,000 from $30,000 enabling first home buyers to achieve home ownership sooner.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.