Top ups stay behind if leaving NZ
QTowards the end of 2019 I emigrated from New Zealand to the Netherlands with my family. I was born in the Netherlands and I am a New Zealand permanent resident. Our intention was to emigrate permanently. We have now been living in the Netherlands for 18 months, much of which has been in a lockdown situation. We would like to withdraw our KiwiSaver funds to help us get by, as the situation here is grim with limited job prospects. What consequences will withdrawal of my KiwiSaver have to moving back to New Zealand if we wish to do so in the future?
AWith one exception, a KiwiSaver member who leaves New Zealand permanently can apply to withdraw most of their KiwiSaver funds once they have been living abroad for at least one year. The exception is Australia — KiwiSaver members can apply to transfer their savings to a qualifying Aussie Super fund but they can’t withdraw their money.
You have two options. The first is to make a Permanent Emigration Withdrawal, as you have left New Zealand for the Netherlands and do not intend returning. But be aware that you won’t get all your money — you are not paid out any government contributions (except for the $1000 kickstart if you received that).
Your second option is to make an application for withdrawal based on Serious Financial Hardship. The bar is set quite high, and you would be required to show evidence of serious hardship, such as inability to meet rent or mortgage payments. The trustee of your KiwiSaver scheme decides if and how much you can withdraw in this situation. This would leave the rest of your KiwiSaver intact for the long term.
Clause 14(1) of Schedule 1 of the act allows a KiwiSaver member to withdraw funds if the member has permanently emigrated from New Zealand. Clause 14(3) requires the member to submit an application to the trustee of their KiwiSaver scheme, including, a statutory declaration that the member has permanently emigrated from New Zealand and proof that the member has departed from New Zealand, which may be travel arrangements, passport evidence and evidence of necessary visas and proof the member has lived at an overseas address for some time in the year following the member’s departure from New Zealand.
The application form requires that you declare under oath that you have left New Zealand permanently. You have returned to the Netherlands with the intention of living there permanently, so you can make that declaration in all honesty.
Your KiwiSaver provider must comply with the KiwiSaver Act 2006 when processing all withdrawal applications — but they have no interest in your residency status and do not have any power to alter or cancel it.
If your plans change and at you decide to return to New Zealand at some time in the future, you will be able to open a new KiwiSaver account.
is a Financial Adviser with Peak Portfolio Management Ltd which holds a licence FSP702451 issued by the Financial Markets Authority to provide financial advice services. Disclosure information at www.peak.net.nz or call 06 8703838. The information provided in this article is of a general nature and should not be relied on as a recommendation to invest in a financial product. Send your KiwiSaver questions to shelley. hanna@peak.net.nz