Retirement savings can be transferred from Australia but funds cannot be withdrawn to help buy a property.

I recently moved back from Australia and I'm just wondering what the rules are regarding transferring my Australia super to my KiwiSaver fund and whether I can use it towards a deposit on a first home. I've been told it's not possible.
Is this true?

With the housing market running so hot in some parts of New Zealand it's understandable that many first-home buyers want to unlock as much as possible from their KiwiSaver.

An agreement to allow the switching of retirement savings between New Zealand and Australia was hammered out in 2009 - part of the Single Economic Market work programme - with the idea that it helps the flow of people wanting to pursue careers in the other country.

At the time the Australian Tax Office estimated around $18.5 billion of "lost accounts" were sitting in the Australian super system and it's fair to say much of it belonged to New Zealanders.

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The systems are now in place to bring superannuation savings across the Tasman but there is some fine print, particularly for first-home buyers.

Ana-Marie Lockyer, general manager products and marketing at ANZ Wealth, explains: "The New Zealand and Australian governments have recently made it easier to transfer Australian superannuation funds to a New Zealand KiwiSaver scheme.

"You can transfer your Australian retirement savings into your KiwiSaver account if:

*You've permanently left Australia to live in New Zealand.
*Your Australian Funds are complying superannuation funds.
*You're a member of a KiwiSaver scheme that accepts transfers of Australian funds.

"Once the Australian retirement savings are in your KiwiSaver account, the rules that apply to those funds are different to KiwiSaver rules.

"Your Australian retirement balance:

*Will be locked in until you reach age 60 and retire.
*Won't be counted in calculating your annual member tax credits from the New Zealand Government.
*Can't be transferred or withdrawn if you permanently emigrate to another country.

"And, you are correct; your Australian funds cannot be withdrawn to buy a first home in New Zealand.

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"This is because superannuation funds cannot be withdrawn for a first home in Australia and so cannot be used for that purpose here either.

"However the investment returns earned on the Australian funds after being transferred to KiwiSaver can be withdrawn for your first home withdrawal," Lockyer says.

"You can find more details on how to transfer your funds, as well as things you should consider before transferring on the FMA website ," she says.

If you do decide to combine your Australian funds with your KiwiSaver you will need to bring the whole lot back in one go rather than in dribs and drabs.

There is some good news on the KiwiSaver first-home withdrawal despite you not being able to touch the money saved in Australia.

Right now, if you've been a KiwiSaver member for three years you can withdraw your contribution, anything your employer has chipped in and any investment earnings (including any money earned on the Australian-sourced funds).

The government contributions, which include the $1000 kickstart and the member tax credit payments, have to remain in your account.

But from the beginning of April the scheme is being tweaked to allow you to withdraw member tax credits as well, potentially adding several thousand dollars to your home savings kitty.

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 Herald's panel of industry players email Helen Twose, helentwose@gmail.com. Sorry, but Helen cannot answer all questions, correspond directly with readers, or give financial advice.
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