If you have KiwiSaver savings, you can voluntarily transfer them to an Australian super fund under the provisions of a Trans-Tasman Retirement Savings Portability scheme that was introduced on July 1, 2013.
Consolidating your funds in this way can help you to avoid paying multiple fees on your retirement savings. However, it is not compulsory to transfer your KiwiSaver funds, it’s just an option that’s available.
Australians can also voluntarily transfer their super funds to KiwiSaver under this consolidation arrangement. KiwiSaver is a New Zealand savings scheme designed to fund the retirement of New Zealand citizens and permanent residents.
What are the rules about transferring from KiwiSaver accounts to Australian super funds?
If you want to your KiwiSaver retirement savings to an Australian super fund, you must:
- have emigrated to Australia (you will need to sign a statutory declaration confirming this and provide evidence that you have departed New Zealand and are living at an Australian address),
- have an Australian tax file number,
- apply to your KiwiSaver provider,
- transfer your entire KiwiSaver balance to an Australian super fund that is regulated is regulated by the Australian Prudential Regulation Authority (APRA). You cannot do partial transfers, nor transfer KiwiSaver retirement savings to a self-managed super fund (SMSF).
It’s important to understand that if your intended KiwiSaver funds transfer exceeds the Australian non-concessional (after-tax) contributions cap (currently $100,000 per year), you will not be allowed to make the transfer. Transfers under this amount will be treated as contributing to your non-concessional contributions cap.
In addition, if you’re aged over 65, you must satisfy the work test to be able to transfer your KiwiSaver funds to an Australian super fund.
Your Australian super fund will request the following information about your KiwiSaver transfer:
- whether it includes any Australian-sourced amounts (and if so, any tax-free component),
- any restricted non-preserved component,
- any unrestricted non-preserved component.
This information will affect the tax treatment of your future super benefits. Your KiwiSaver provider will be able to supply your Australian super fund with all this information. It must be provided before the Australian super fund will accept the transfer.
Your funds will be transferred tax-free. They are not tax-deductible as a personal super contribution in Australia. KiwiSaver transfers are also not classed as a contribution for the purposes of determining eligibility for a super co-contribution from the Australian government if you’re a low-income earner, nor for the spouse contribution tax offset.
In addition, you may not be able to use any transferred KiwiSaver funds to access Australia’s First Home Super Saver Scheme. Whether or not you can will be a ruling made by the Australian Taxation Office (ATO) based on your individual circumstances.
Once your KiwiSaver funds are transferred to an Australian fund, they will become subject to Australian super legislation, except for when you can access your funds. Any New Zealand-sourced transferred funds cannot be accessed until you reach the New Zealand retirement age, which is currently 65.
Any Australian-sourced funds can be accessed when you meet a condition of release. Except for special “early access” circumstances, you can only access Australian super once you’ve reached your preservation age and met a condition of release (such as retiring or turning 65). Your preservation age in Australia is between 55 and 60, depending on your date of birth.
Which Australian super funds accept super funds from KiwiSaver?
It’s important to understand that it’s not compulsory for Australian super funds to accept KiwiSaver transfers and very few do. Funds that do include:
- WA Super
- Telstra Super
- Energy Super
- QIEC Super (however, they are due to merge with NGS Super by mid 2019 and it’s not yet confirmed if they will allow new KiwiSaver transfers after the merger)
Feel free to contact us if you know of any other funds that do and we’ll add them to this list.
Both KiwiSaver and your chosen Australian super fund may charge fees for the transfer and acceptance of the funds.
Any KiwiSaver transfer will also always be labelled as such in your Australian super fund. The amount will not be able to be rolled over to another Australian super fund unless that fund also accepts KiwiSaver transfers. If you return to live in New Zealand, you can re-join KiwiSaver if you’re under the age of 65 and you’re a New Zealand citizen or a permanent resident.
What should I consider first?
You should consider your potential future requirements and both Australian and New Zealand super legislation before deciding whether to transfer your KiwiSaver retirement savings to an Australian fund. There are different early access eligibility requirements in place in both countries in areas such as:
- buying your first residential home, and
- in cases of severe financial hardship or a serious illness, injury or disability that affects your ability to work (or threatens your life).
We do not claim to be experts on New Zealand superannuation. You should do your own research and seek independent professional advice about whether transferring your KiwiSaver retirement savings to an Australian super fund is appropriate for your individual financial circumstances and goals.
The information contained in this article is general in nature.