The federal government has introduced legislation to make a further reduction in the eligibility age to make downsizer contributions from 60 to 55, less than two months after changes reducing the age from 65 to 60 commenced.
The change is included as part of Treasury Laws Amendment (2022 Measures No 2) Bill 2022, which was introduced into the House of Representatives on 3 August by Assistant Treasurer and Minister for Financial Services Stephen Jones.
In the second reading for the bill, Jones said “this modest change in the eligibility age for the downsizer program complements the government’s comprehensive plan on housing to improve access and affordability”.
“This measure will increase the availability of suitable housing for growing Australian families by encouraging more older Australians to downsize to homes that better meet their needs,” he added.
The explanatory memorandum to the bill notes the amendments will also require contribution acceptance rules in the Superannuation Industry (Supervision) Regulations 1994 and Retirement Savings Account Regulations 1997 to ensure downsizer contributions can be accepted by regulated superannuation funds and retirement savings account institutions for individuals aged 55 and over.
“However, as the changes to the contribution acceptance rules require amendments to regulations, they are being progressed separately to the amendments in schedule 5 to the bill,” the explanatory memorandum stated.
The bill is currently in the lower house, but when passed by the Senate the change will start on the first day of the first quarter after the day the bill receives royal assent, and the amendments will apply to downsizer contributions made on or after the commencement date.
The reduction in the eligibility age to 55 was first raised as a policy proposal by the Morrison government in the lead-up to the 2022 federal election and was supported by the Labor opposition, which also added the change to its policy platform.
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