First Home Saver Account – Tricks for getting more money from the Government

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Introduced last year, the scheme commits the Government to contribute 17 per cent on the first $5000 deposited each year over four years into an approved account, meaning account holders can qualify for up to $3400 of Government contributions.

To qualify, the customer must make personal after-tax contributions of at least $1000 a year over four financial years. Commentators have argued a big drawback is having the money on deposit for four years. Cornelius says the scheme is better than it looks.

"A deposit made on June 30 in year one would be enough to qualify for the Government contribution in that financial year. The deposit would then be maintained for two full years.

"In the fourth year it would be necessary to keep the account open [and make a deposit] for just one day, before withdrawing the funds and closing the account, to qualify for the Government contribution in that year.

"The account needs to be operated for only two years and two days to realise the full benefit of the Government contributions and tax concessions. It is a far more flexible product than most people have allowed and the lead-up to June 30 is the time to take advantage of the scheme."

For more information, visit: http://www.financialspectrum.com.au/Content_Common/pg-fhsa.seo