Aussie rules apply to funds
Different rules for transferred Aussie Super funds, writes SHELLEY HANNA
It is up to the trustees of your KiwiSaver scheme to decide whether or not to pay out any money to you, and how much.
Ihave transferred my Aussie Super over to my ASB KiwiSaver. Am I able to withdraw my funds that were transferred from Aussie Super into my KiwiSaver under financial hardship? I have read nothing to say I can’t, only that I cannot use the Aussie Super to buy a first home.
It is relatively easy to shift money in Aussie Super across to a KiwiSaver account, but the money that comes across is not treated quite the same as money that has been generated in New Zealand.
The reason for this is Aussie Super has different rules, and those rules continue to apply once the money has travelled from one side of the Tasman to the other.
I asked Steve Matson, head of advice for Fisher Funds Management, to comment on your situation.
“One of the features of the TransTasman portability of retirement savings arrangement is that the Australian sourced retirement savings will be subject to certain Australian scheme rules. For example, any savings transferred to KiwiSaver from an Australian Super scheme cannot be withdrawn to purchase a first home — as this is consistent with the Aussie Super scheme rules. In saying that, Aussie Super does have a specific rule relating to financial hardship and Aussie Super savings transferred to KiwiSaver are subject to New Zealand rules regarding hardship access. If you have Aussie Super that has been transferred and you find yourself in the unfortunate situation of applying to make a Significant Financial Hardship withdrawal, contact your provider who will assist you with the application process and confirm the maximum balance available to you under hardship.”
I am sure you will be pleased to hear this. Making a Significant Financial Hardship (SFH) application is not a walk in the park — there are strict criteria, and it is not an easy process.
Each KiwiSaver manager has their own lengthy SFH application form and they ask that you provide a great deal of background information. You may like to get help from a budget adviser — they are familiar with the process.
The most common reason for an SFH application is when a person is ‘unable to meet minimum living expenses’. Other problems that may be covered are falling behind in your mortgage repayments, having to modify your home through disability, or paying for a funeral or medical treatment.
The trustees will need a clear explanation of what brought about the situation — it can’t be through your own negligence. They will scrutinise your bank statements and other evidence that you provide, to make sure you have not been spending irresponsibly.
Once you have filled out the form and gathered all the information (either on your own or with the help of a budget adviser) you then need to sign the form as a Statutory Declaration in front of an authorised person such as a JP or solicitor.
Part of the declaration is that you have ‘explored and exhausted all reasonable alternatives of funding’ and that you are not an undischarged bankrupt or incapable of managing your financial affairs.
It is up to the trustees of your KiwiSaver scheme to decide whether or not to pay out any money to you, and how much.
Some withdrawal forms allow for payment directly to third parties such as a landlord or energy company. This may increase the chance of success, as the trustees will know that the money will go where you said it was needed.
is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 06 870 3838 or go to 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