In the Federal Budget (11 May 2021), the Government announced that it would reduce the eligibility age (from 65 to 60 on 1 July 2022) for downsizer contributions (a one off, post-tax contribution for each member of a couple following the sale of their main residence that at least one of them has owned for more than 10 years) into superannuation. As downsizer contributions are required to be made within 90 days of receiving the proceeds of sale, the complainant contacted the ATO to discuss whether she would be able to obtain an extension of 35 days following the 90 day period of receiving the proceeds of sale of her property as her settlement date was more than 90 days before 1 July 2022. 

The complainant explained that she had initially contacted the ATO and was advised that she would not have any difficulties obtaining an extension. The complainant proceeded to sell her property and contacted the ATO to request the necessary extension. However, the ATO advised her that she was not eligible for an extension. The complainant explained that she is financially disadvantaged as a result of acting on incorrect information she had received from the ATO.  

The ATO initially advised that it was not able to locate the telephone recording where the initial advice had been given. Following the IGTO’s investigation, a copy of the telephone call recording was located and the ATO acknowledged that it had provided incorrect advice to the complainant.  

The complainant subsequently advised that she was able to defer settlement of her property so that she would be able to make a downsizer contribution in the first week of 1 July 2022 (i.e., within 90 days of settlement).  

The IGTO advised the ATO of the new settlement date and requested the ATO confirm whether the complainant would be eligible to make a downsizer contribution. The ATO advised that the settlement date of the sale of the property is required to be on or after 1 July 2022. In the complainant’s circumstances, she would not be eligible to make a downsizer contribution as her settlement date is prior to 1 July 2022.  

As part of our investigation, the IGTO drew the ATO’s attention to information on its website which does not include any requirement that the settlement date be on or after 1 July 2022. The ATO reconsidered its position and subsequently confirmed that the complainant would be eligible to make a downsizer contribution.