NZ’s $477m in forgotten funds - what happens if it doesn’t get claimed

Senior journalist, NZ Herald·NZ Herald·

2 May, 2024 05:00 PM7 mins to read

Thousands of New Zealanders are owed millions of dollars in unclaimed funds listed with the IRD.

Thousands of New Zealanders are collectively owed more than $477 million in unclaimed funds, most of it easy to claim. And each year, millions of dollars are inherited by the Government because no one has come forward. Jane Phare reports.

The “unclaimed funds” section of the Inland Revenue’s website is verging on addictive for nosy parkers wanting to know who’s owed what. There, listed under names of more than 415,800 Kiwis that anyone can search, is $477.2m just waiting to be claimed.

The millions aren’t tax refunds. It’s forgotten funds from institutions and just about any entity that handles money, debts that most Kiwis listed on the site won’t even know they are owed. Or, if they’ve died, their relatives won’t know they could inherit. If it’s not claimed after 25 years, the money - more than $200m last year - goes to the Crown.

One Auckland man who idly searched under his family name found $650 from his late father’s estate languishing in a forgotten bank account earlier this year. He claimed the debt from the IRD, after providing proof, and split the money with his brother and sister.

“Enough for a nice dinner out,” he told the Herald.

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Many of the unclaimed entries are similarly small amounts - old Bonus Bonds worth a few hundred dollars or, in some cases, a few thousand; amounts owed by utility accounts, credits from companies like Vodafone and Bunnings, unclaimed wages or holiday backpay, royalties, credit card credits, trade accounts, rental refunds, uncashed cheques and investments.

But other amounts - money from solicitors’ trust accounts, bank accounts, inherited money or life insurance payments - are more substantial. The Herald found several larger amounts. Mr Z.W Zhou is owed $230,383 from an ANZ account, and a Mr Zuwu Zhou, possibly the same person, is owed another $55,855 from four different ANZ accounts. An amount of $62,720 is waiting for one woman to claim from South Island chartered accountants Ashton Wheelans Ltd, another is owed $67,655 from an ANZ account, and a man is owed $66,876 by the Financial Markets Authority.

Some of the unclaimed funds will be years, even decades, old, languishing under the Unclaimed Money Act 1971.

The money is generally held for five years by the institution before being transferred to the IRD. It then sits there for another 25 years before being transferred to the Crown. Some forgotten Bonus Bonds, in the case of the writer’s sister and countless other Kiwis, date back to the 1970s, but because the scheme was only wound up in 2020, the amounts show up on the site.

It's worth searching for unclaimed funds on the IRD's website. Photo / Alex Cairns

The oldest debts date back to 1999 and by next year will have been transferred to the Crown. Last year, $206.1m of New Zealanders’ unclaimed dosh was transferred, but the amount fluctuates each year. In June 2021, only $19.3m went to the Government; the following year the amount rose to $59m. So far this year, in the nine months to March 31, $130.9m has gone from the IRD’s site.

No will and no relatives

The Government also eventually inherits from New Zealanders who have died without a will and with no known relatives, although the amounts are relatively small.

Just under half of the adult New Zealand population have a will at any one time, but by the time Kiwis grow old and die, that figure has increased to around 94 per cent.

It’s that 6 per cent of New Zealanders who die intestate that can cause an administrative headache for life insurance companies, banks and other institutions trying to track down who the money should go to. The Public Trust, set up as a Crown entity more than 150 years ago to protect New Zealanders’ legacies, invariably ends up with the task of sorting out the inheritance.

Catherine Simpson, the trust’s head of transformation - retail, says the team goes to great lengths to find who should rightfully inherit, including engaging professional genealogists who trace back family trees, use social media and, in some cases, private investigators.

The hunt will sometimes extend overseas and can, in complex cases, take two years or more, she says.

“We’ve got a pretty exhaustive list of things we will do.”

The trust is currently handling the affairs of a man who died intestate and without obvious family or relatives. After exhaustive inquiries, progress has been made, she says.

“We’ve found 20 cousins and counting.”

Part of Simpson’s job is to encourage Kiwis to finalise their wills. Deciding how funds should be split can be complex, particularly in the now more common blended families.

“There are a whole lot of questions that come into play. For me, I just wouldn’t want to put that in the hands of someone else.”

A stash of cash

Simpson thinks back to the case of a man who died with several hundred thousand dollars in cash stashed under his mattress. Due to mental health issues, the man’s affairs were managed by the Public Trust. He was living in community housing and no family members had been in touch for years. The trust engaged a genealogist who found a brother and sister living overseas.

Public Trust specialist Catherine Simpson says genealogists are engaged to find missing relatives when someone dies without a will. Photo / Jason Oxenham

Simpson says: “I often think about, ‘What did he want? What was his thinking about keeping all that cash under his mattress?’”

She wonders the same about a man who kept valuable gold bars hidden under the floorboards of his home but died without a will.

In another case, an elderly woman who arrived in New Zealand as a refugee decades before died with a large amount of assets and money, but without a will. Using a genealogist, the Public Trust located an aunt and uncle living overseas who inherited the estate between them.

In cases where an estate is worth more than $15,000, an administrator - often the Public Trust - must be appointed through the High Court.

It’s rare for the Public Trust not to find someone to benefit from the estate, Simpson says. Occasionally, the trust will manage to track down relatives but they refuse to take the money due to family dynamics.

When the Public Trust was sorting out the estate of a deceased client, they found gold bars hidden under the floorboards of his house. Photo / Sarah Ivey

Of the 1500 estates the Public Trust processes each year, only three of those would transfer to the Crown because no beneficiaries can be found. Around 15 beneficiaries a year from around nine estates are known but cannot be located. Unclaimed or “ownerless” estate money goes to Treasury, which keeps it for six years before it, too, is handed over to the Crown.

The last handover - of $82,226 - was in 2017; $280,755 was passed to Treasury in 2016, and $212,751 in 2015.

Treasury also administers unclaimed money covered by the Public Finance Act, property such as cryptocurrency, and trust money. Over the past seven years, Treasury has received $21.9m in unclaimed money and returned $3.1m to claimants. Although the balance will be transferred to the Crown after seven years, claimants can still make a claim to Treasury for the funds.

The Māori Trustee also holds money in a common fund for 10 years under the Māori Trustee Act 1953. If no claim has been made in that time, the funds become unclaimed money. The Māori Trustee did not respond to the Herald by the time of publication.

To check the IRD website for unclaimed money click here.

Jane Phare is a senior Auckland-based business, features and investigations journalist, former assistant editor of NZ Herald and former editor of the Weekend Herald and Viva.