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Helen Twose: Who's in KiwiSaver line when death strikes?

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When deceased doesn't leave a will a number of people can apply for payment of the balance of the account.

Photo / Thinkstock
Photo / Thinkstock

Can you please advise who is entitled to the KiwiSaver fund when the person paying into it dies without leaving a will?

The person in question was my brother who wasn't married and has a 37-year-old son who was 'whangai' when he was 5-months-old. (He was our sister's baby).

There are 13 surviving siblings; both our parents are deceased also.

One of the siblings has applied and received his money (less than $10,000).

I would like to know if this is the correct procedure and do KiwiSaver providers recognise whangai (Maori adoption) children?

Where a person has less than a prescribed amount (currently $15,000) in their KiwiSaver scheme account when they die, certain persons can apply for payment of the balance of the account without obtaining letters of administration (where the KiwiSaver scheme member dies without a will).

The persons who can apply for payment of the balance of the account under this provision are:

•The widow, widower, surviving civil union partner, or children of the deceased person.

•A surviving de facto partner of the deceased person.

•The persons beneficially entitled to the estate of the deceased person under the will or on the intestacy of that person.

•Any person appearing to be entitled to obtain administration of the estate of the deceased person in New Zealand.

•Any person related by blood or marriage or civil union to the deceased person who undertakes to maintain the children of that person who are minors or any of them.

•Any person who has and is exercising the role of providing day-to-day care for any of the children of the deceased person who are minors.

The person receiving payment of the balance is liable to apply the money in administering the deceased person's estate and the KiwiSaver scheme provider can require the person receiving the payment to give undertakings that the money paid will be applied for that purpose.

The adoption law is not very clear as to whether or not whangai children are recognised for adoption purposes, but such persons may fall within the above category of "appearing to be entitled to obtain administration of the estate of the deceased person" and therefore be able to request payment from the KiwiSaver scheme provider.

Irrespective of that, the sister is also able to request payment under that same category.

Whoever the recipient of the money is, he or she is required to apply the money in administering the deceased person's estate.

It is worthwhile noting that all KiwiSaver scheme providers are bound by this law and cannot implement their own requirements in this regard.

•Emma Harding, Chapman Tripp senior solicitor.

Q: Is it a good idea for a 43-year-old person on the unemployment benefit (trying to get work) to join KiwiSaver and save $21 per week (or whatever it is to qualify for the tax rebate each year)?

KiwiSaver offers some generous benefits - whether you're working or not working.

For a start, the Government will deposit $1000 into your KiwiSaver account just for joining.

It will also pay a 'member tax credit' of 50c for every dollar you contribute, up to a maximum of $521 each year.

This is actually an annual cash payment into your KiwiSaver account rather than a tax rebate.

But whether or not it's a good idea for you to join depends on your personal circumstances.

While you're unemployed, you agree the amount you want to contribute with your KiwiSaver scheme provider.

Some providers have minimum contribution requirements, others will let you contribute as little as you want.

However, as you point out, you would need to contribute $1042 a year or around $20 a week to get the maximum amount of member tax credits. (The member tax year runs from July 1 to June 30).

Once you start employment the minimum contribution rate is 2 per cent of your before-tax salary, rising to 3 per cent from April 1, 2013.

Your savings are also locked in until age 65 and can only be accessed earlier in exceptional circumstances or if you are eligible to make a first home withdrawal.

•Joe Bishop, Kiwibank head of wealth products.

Q: I have been with KiwiSaver for around five years now and have a good amount saved.

My plan is to use it towards a deposit on a house in Auckland where I am now living.

In 2010 my partner at the time put me on her house as a joint owner, I am still on the title of the house today.

I paid no deposit towards this.

My question to you is, is it possible to use my KiwiSaver money that I have built as a deposit even though I am on her title as a half-owner of her house?

Because you are registered as part owner of a property already, you no longer satisfy the general criteria under the KiwiSaver first home withdrawal provisions to qualify as a first home buyer.

However, if your financial position is what would be expected of a person that has never owned property you may still be able to withdraw your contributions to assist with a property purchase.

To withdraw your contributions, you will need to satisfy additional criteria as determined and assessed by Housing New Zealand.

If Housing New Zealand confirms your eligibility they will provide a notice which must be produced as part of your application to your KiwiSaver provider.

We recommend you first visit the Housing New Zealand website at www.hnzc.co.nz/kiwisaver for a checklist.

If you still have questions you can either email your query to kiwisaver.firsthome@hnzc.co.nz or call the Housing New Zealand Helpline on 0508 935 266.•Martin Lewington, head of Mercer New Zealand.

•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.

- NZ Herald

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