Q I am a Canadian working here in IT on a one year working holiday visa. If I sign up to KiwiSaver while I am here, what will happen to the money when I go back to Canada?

A

As a foreign national on a working holiday visa you are not eligible to join KiwiSaver.

The eligibility rules to join KiwiSaver state that a person must be living or normally living in New Zealand, or employed overseas under the State Sector Act, and be a New Zealand citizen or entitled to remain in NZ indefinitely. They must also be under the age of 65. Any person not meeting these criteria cannot join.

KiwiSaver is a Government subsidised retirement savings scheme for New Zealanders. As such, it is not designed for people like you who are likely to be here for just a short period of time.

If at some stage you are granted permanent residence in New Zealand, then you will be able to join. I would like to think that this would be a positive experience for you and you would live here "happily ever after". However, if you later decided to return to Canada you would be eligible for early access to your KiwiSaver funds.

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There is a mandatory 12-month stand-down and you are required to provide proof that you have left (for example a stamp in your passport), and evidence of your address on arrival and evidence of your address after 12 months.

All documents must be certified and you must sign the form as a statutory declaration in front of a JP or similar person. Once you have met all the criteria you are permitted to withdraw all your savings, any returns, and the $1000 kick-start. However you are not entitled to the Member Tax Credits of up to $521 per year. These funds are returned to the Government.

If you moved to Australia rather than back to Canada you would not get early access to your KiwiSaver. The Permanent Emigration Withdrawal is no longer available for KiwiSaver members who have emigrated to Australia, as this is now governed by the Trans-Tasman Portability (TTP) Regime that came into effect from July 1, 2013. Under this, your savings would be locked up until 65. It would be up to you to decide which side of the Tasman you want to keep your funds, you would not be obliged to relocate them to Australia.

One of the questions on a KiwiSaver application form is: "Are you a NZ citizen or do you have NZ residency?" and this provides guidance to those prospective new members enrolling through a fund manager. However, many new members are opted in by their employer when they start a new job and in that situation it is up to the employer to check that the person is eligible. If someone slips through the net, then it is up to the scheme provider to check their eligibility. Anyone who has been signed up in error will have their contributions refunded to them, and their account closed.

• Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 870 3838 or go to www.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.