Helen Twose: Bankrupt and starting again? There are options

The HomeStart grant provides an extra boost - up to $20,000 depending on your circumstances - on top of any money saved through KiwiSaver.

Q: My wife and I have been made bankrupt and in about a year will be wanting to buy a home, having owned before. We want to apply for a HomeStart grant once our bankruptcy period is over. Once we can start saving, we are keen to funnel our money into KiwiSaver, but would hate to have our application declined, or find we can't use our funds and were better off putting our savings in the bank. Can we get accepted into the scheme, subject to providing the necessary savings history?

A: Since the beginning of July income caps have been removed for previous home owners wanting to withdraw savings to get back into the housing market. It's only available to second-chance house hunters who can show Housing New Zealand, who assess applications on behalf of KiwiSaver providers, they are in the same financial position as a first-home buyer.

The idea is to give mid-life, middle-income New Zealanders who have been through a relationship break-up or business failure the opportunity to use KiwiSaver to buy a home again.

Those applying to access KiwiSaver funds - you can now withdraw everything except the last $1000 - may also be eligible for the HomeStart grant, which is managed by Housing New Zealand.

The HomeStart grant provides an extra boost - up to $20,000 depending on your circumstances - on top of any money saved through KiwiSaver.

The rules for the HomeStart grant are a lot more stringent, though.

You need to have been regularly saving a minimum amount into your fund for at least three years and there are price caps to ensure you're buying or building a modest home, and those income caps still apply.

Housing New Zealand confirms no changes are being made to the eligibility for the KiwiSaver HomeStart grant. "In order to qualify for the grant, all applicants must meet the income cap criteria, whether you are a previous home owner or a first-time home buyer.

"These caps are currently up to $80,000 in the last 12 months for a single purchaser or up to $120,000 in the last 12 months for two or more buyers," it says.

It is possible to get pre-approval for the HomeStart grant, valid for 180 days, if you have begun hunting but haven't found a property yet.

If you do not find a home or land to buy before the pre-approval expires you will need to complete a new application.

Because of the different criteria for previous home-owner KiwiSaver withdrawals and HomeStart grants I recommend contacting Housing NZ to ensure you are eligible before making a savings decision: kiwisaver-homestart.co.nz.