Once funds are in KiwiSaver they will be ring-fenced because slightly different rules apply to Aussie money.

If I were to transfer my entire superannuation from Australia and at a later date, for argument's sake, I fell into financial hardship for health reasons, would I be able to withdraw my funds with KiwiSaver including funds I have transferred from Australia early?

I have read up on the rules in regards to transferring super to KiwiSaver, but it does not seem to spell out any rules regarding the financial hardship category.

I inquired with KiwiSaver and was advised when your super is transferred from Australia and you fall into hardship they will be bound by the KiwiSaver rules on hardship. Please confirm if what KiwiSaver says is true.

New rules around transferring superannuation savings between Australia and New Zealand came into effect mid-way through last year.

The upshot is that complying Australian superannuation funds will now be able to be transferred into a KiwiSaver fund here and vice-versa.

KiwiSaver providers are under no obligation to take Australian super funds but it seems most of the main players here in New Zealand have geared themselves up to accept the transfers.

Going the other way, that is, taking KiwiSaver funds to Australia, seems to be problematic with no Australian superannuation provider yet taking KiwiSaver funds but I'll focus just on Australia to New Zealand transfers here.


I spoke to Stephen Jonas, head of client services at Craigs Investment Partners, about how Australian superannuation savings are treated once it is part of your KiwiSaver funds.

"Generally any funds transferred from an Australian superannuation scheme will be recorded separately from your New Zealand KiwiSaver contributions," says Jonas. "Providers do this as the rules around accessing these Australian balances are different, so providers need to be able to identify where your funds have come from.

"The basic rules around accessing balances transferred from Australian superannuation schemes are:

Funds are available for withdrawal from the age of 60, if you meet the retirement criteria.

Funds are available to be withdrawn under the KiwiSaver rules relating to hardship and serious illness.

Funds are not available to be withdrawn under the KiwiSaver rules relating to first-home purchase."

When you bring your Australian funds to New Zealand the whole balance needs to be transferred rather than bringing it over in dribs and drabs.

As Jonas mentioned, once the funds are in KiwiSaver they will be ring-fenced because slightly different rules apply to the Australian money.

You may be able to tap those funds before retirement age if you fall on hard times.

The KiwiSaver scheme's trustees will make a call about whether you meet the criteria for financial hardship, although they may accept some advice from the KiwiSaver provider.

The hardship withdrawal has a fairly high threshold for acceptance - falling behind on credit card payments won't cut it.

Generally you can access some of your KiwiSaver funds, including any Australian-sourced funds, if you can't meet basic living expenses, including mortgage repayments; need to modify your home if you or a family member becomes disabled; need to pay for medical treatment or suffer from a serious illness; or you need help paying for a funeral.

In cases of financial hardship you can't withdraw the $1000 KiwiSaver kickstart or any member tax credits.

If you become seriously or terminally ill, or suffer a permanent disability that affects your ability to work you can apply to withdraw everything in your account.

If you have made your move to New Zealand permanent and want to bring your Aussie super savings with you then here are the steps the Australian Tax Office says you will need to go through:

• You will need to sign a statutory declaration stating that the move is permanent and provide proof of residence at an address in New Zealand.

• You need to contact your Australian super fund and request the whole balance of your super savings be transferred to a KiwiSaver scheme.

• You need to have a KiwiSaver scheme ready to receive the transferred funds and ensured the KiwiSaver scheme is going to accept your Australian transfer.

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.