Kiwisaver, Shelley Hanna: Non-residents are not eligible

It is up to employers to check the status of their employees before signing them up.

I applied to join KiwiSaver but I have been turned down. The reason given is 'invalid enrolment'. How can I get the employer and government contributions? I am not sure what I can do.

The usual reason for 'invalid enrolment' is that the applicant is not entitled to live in New Zealand indefinitely. Only individuals who are New Zealand citizens or entitled to live in New Zealand indefinitely are eligible to join KiwiSaver. You can't join KiwiSaver if you have a temporary, visitor, work or student visa.

Employers are required to sign up eligible new employees over the age of 18. If the new employee does not wish to be a member, they can opt out between week 2 and week 8. It is up to employers to check the status of their employees before signing them up.

This is not always a simple matter as there are many different types of work visas, such as the "Specific Purpose Work Visa" or the "Post Study Work Visa".

Sometimes a person is enrolled in error, and the invalid enrolment may be picked up by the KiwiSaver provider or by Inland Revenue. If that happens their enrolment is cancelled, and all contributions are returned to them and/or their employer as appropriate.

Many people who are in New Zealand on work permits have the intention and hope of becoming permanent residents, and like you their inability to join KiwiSaver causes some frustration.

As you have realised, you are missing out on employer contributions (worth 3 per cent of your annual salary) as well as the government top-up (up to $521 per year). It also means that you are further away from achieving goals such as buying your own home, which is often helped along by several years of KiwiSaver contributions.

Not only can members access all but $1000 of their account to purchase a first home, they may also qualify for the First Home Grant worth $3000 to $5000 from Housing New Zealand if they have been contributing members for three to five years.

Why exclude non-residents from KiwiSaver membership? Permanent residence and citizenship of any country confers rights not available to those on a temporary work or visitor's visa.

Not just membership of KiwiSaver but also social and health benefits. If those on temporary work visas were permitted to join KiwiSaver and down the track many of them left the country, their providers would be dealing with many applications for withdrawal. As the primary purpose of KiwiSaver is long term retirement savings, this would be very disruptive.

While you can't join KiwiSaver on your current work visa, you can save 3 per cent or more of your salary into a bank account or investment account. Unlike KiwiSaver these savings won't be locked in and can be used for the goals important to you now. If down the track you achieve permanent residence status be sure to let your employer know so that you can join KiwiSaver.

Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 06 870 3838 or go to peak.net.nz. The information contained in this article is of a general nature and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz