Kiwis soon able to transfer Australian superannuation to New Zealand

Legislation allowing New Zealanders returning home from Australia to bring their retirement savings with them will be introduced to Parliament in about two weeks, Finance Minister Bill English says.

Providing the necessary law changes are made in Australia, it is envisaged the new arrangements will take effect in the second half of next year.

Currently, Kiwis who work in Australia must contribute to an Australian complying superannuation fund. However, the savings are locked into the Australian scheme until the saver reaches retirement age.

Key facts about the Superannuation changes:

  • The transfer of retirement savings between the two countries will be exempt from entry and exit taxes. Under current tax laws, transferring savings from Australia to New Zealand may be regarded as a taxable dividend. The proposed legislation will ensure this does not happen.
  • KiwiSaver members moving from New Zealand to Australia will be able to retain any member tax credits if they transfer to an Australian scheme.
  • KiwiSaver members will not be able to withdraw money transferred from Australia to help them buy their first home, but they can use the interest earned on those savings for this purpose.
  • Retirement savings transferred from Australia into a New Zealand KiwiSaver scheme can be withdrawn when members reach the age of 60 as long as they have retired – as set out under Australian scheme rules. KiwiSaver savings transferred to Australian schemes can be withdrawn when members reach 65 – as per New Zealand KiwiSaver rules.

Information sourced from Nov 5th media release: http://www.taxpolicy.ird.govt.nz/index.php?view=712

If you’€™re a New Zealander that has previously worked in Australia, you can track down your Superannuation by using the Tax Office Super Seeker service.

Update 8 March 2010::
An official announcement is expected mid 2010 as to when Kiwis will be able to transfer their funds into Kiwisaver. We’€™ll keep you posted as soon as we know the details. Subscribe to our blog for updates.