Withdrawing money from scheme and a subsidy can help with buying a house, but benefits come with fishhooks.

Q: My partner and I are saving for our first home and understand we can tap into our KiwiSaver funds for the deposit.

Can you clarify what we can and can't do in relation to getting access to that money?

I know it has to be a "low cost" house not a mansion (ha, if only!) and there is a different upper house-price limit depending on where you live in New Zealand.

We're looking in Auckland but because we both work in South Auckland we're looking to extend our search out as far south as Pukekohe or Waiuku.

What is the maximum house price we can go to and still qualify to withdraw some KiwiSaver money?

The good news is that you may be eligible for two great first-home buyer benefits available through KiwiSaver - a first-home withdrawal and a first-home deposit subsidy.

While these can be a great help to first-home buyers, they do come with some fishhooks.

Firstly, let's look at the first-home savings withdrawal. You need to have been a member of KiwiSaver for three years or more in order to qualify.

Also, you can't withdraw any contributions that were made by the Government, meaning the $1000 kick-start and any member tax credits you may have received.


So, you can only get the money that you (and your employer, if applicable) have put in, plus any gains the fund has made.

The second round of good news is that you can use these funds to put towards a house, or land to build on, of any value: it doesn't have to be a low-cost option - although necessity may dictate otherwise!

The house price caps you mention apply to the second benefit - the first-home deposit subsidy.

Once you have been contributing to your KiwiSaver account for at least three years, this benefit will give you $1000 for each year, up to a maximum of $5000.

Both you and your partner can apply, so that's a possible $10,000 boost to your deposit.

There are a number of conditions that apply to the first-home subsidy benefit, including a cap on how much you can earn in order to qualify (under $100,000 per annum for one or two buyers) as well as caps on the maximum house price (under $400,000 in the areas you are considering), so it's well worth going to the Housing New Zealand website (www.hnzc.co.nz) or calling them on 0800 801 601 to find out the details.

•Sean Butler, Fidelity Life investment specialist

Q: Our son accumulated about $10,000 in KiwiSaver before joining the exodus to Australia, where he is now working and contributing to superannuation.

He is unlikely to return to New Zealand in the near future.

I assume his choices are either to leave the money in KiwiSaver (but probably switch out of his current default fund), or transfer it to Australia. Which choice makes most sense?

If your son intends to return to New Zealand in the future, he can't withdraw his KiwiSaver funds because he hasn't permanently emigrated.

Assuming your son has permanently emigrated to Australia, he has several options:

• Leave his KiwiSaver investment where it is, but review his choice of fund as suggested. However, his KiwiSaver investment will not be eligible to receive member tax credits (MTC) paid by the New Zealand Government while he resides in Australia.

•Withdraw his KiwiSaver funds in cash one year after permanent emigration, assuming his year is up before transtasman portability of retirement savings legislation is passed that will force him to transfer to an Australian superannuation fund.

However, all his MTC previously received will be deducted by the Government.

•Leave it until around July next year when the transtasman portability legislation is likely to come into effect and transfer his KiwiSaver funds to an Australian complying superannuation scheme, regulated by the Australian Prudential Regulation Authority.

If he transfers under the new legislation to an Australian superannuation fund, he can retain his MTC in the transfer.

•Sam Stubbs, Tower Managed Funds chief executive

Q: We moved to Australia in March of this year.

My husband was told he couldn't touch his KiwiSaver until he had been out of the country for a year.

Is this correct and does he get it all?

What do we need to provide as proof that we have been gone for a year?

One year after the date of permanent emigration, your husband can close his KiwiSaver account and receive the cash value of any personal and employer contributions, plus the $1000 kick-start, but not any of his MTC, which the Government retains.

In terms of withdrawal process, your husband will need to apply to his KiwiSaver provider, notifying them of his permanent emigration.

Supporting documentation will be required, for example:

•A statutory declaration witnessed by a Justice of the Peace or similar swearing that he has left the country and won't be returning to live

•Proof of departure from New Zealand (such as passport stamps, airline tickets, and so forth)

• Evidence of residing abroad since departure ( such as utility bills in his name at the overseas address, offer/confirmation of overseas employment, and so forth).

Please note the comments in the previous answer, however, about transtasman portability of retirement savings legislation, because this may impact on your husband's application to close his KiwiSaver account, depending on when he makes it.

His KiwiSaver provider should be able to provide relevant information about this possibility.

•Sam Stubbs, Tower Managed Funds chief executive

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose, helentwose@gmail.com.