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New Zealand and Australia both have retirement schemes called superannuation, but it turns out there are some big differences between the two. If you are planning to move from New Zealand to Australia, it’s worth taking note.
Both countries have retirement schemes called ‘superannuation’ – or ‘super’ for short. But in New Zealand, superannuation usually refers to the retirement scheme provided by the government. (The equivalent government retirement scheme in Australia is called the Age Pension.)
Superannuation in Australia is where employers and employees make contributions to a retirement savings account during their working life. It’s similar to KiwiSaver in New Zealand.
In both countries you can choose which KiwiSaver (New Zealand) or superannuation (Australia) fund you’d like your contributions to go to.
Both countries allow you to use your KiwiSaver or superannuation towards a deposit for your first home. However, there are differences.
> More on KiwiSaver Homestart grant
> More on KiwiSaver and Australian FHSS
Your employer must pay tax on their 3%, so you may receive less than 3% in your account.
Investment earnings in KiwiSaver schemes are taxed at 28%. However, if the KiwiSaver scheme you belong to is a Portfolio Investment Entity (PIE), your investment earnings will be taxed at your Prescribed Investor rates of either 28%, 17.5% or 10.5% depending on individual circumstances.
Are you now living overseas? If you are no longer a New Zealand tax resident, be aware that your KiwiSaver investment earnings will be taxed at 28%. If you move your money to an Australian fund that accepts KiwiSaver transfers, your earnings will be taxed at only 15%.
SG contributions made by your employer are taxed at 15%. Voluntary and salary sacrifice contributions are taxed at the same amount. You may be able to claim a tax deduction for after-tax contributions.
You can withdraw all your KiwiSaver savings when you reach age 65.
If you suffer significant financial hardship, you may be able to withdraw some or all of your and your employer’s contributions.
You may be able to withdraw some, or all of your KiwiSaver funds early if your health permanently affects your ability to work or you could die.
> Read more
Moving to Australia If you permanently move to Australia, you can transfer your KiwiSaver to a KiwiSaver accepting fund such as First Super.
Generally, you can only access your super once you have reached preservation age.
Under extreme circumstances you may be able to access some funds on grounds of financial hardship or compassionate grounds.
> More on KiwiSaver Transfers
Moving to New Zealand If you move to New Zealand, you can transfer your superannuation to a KiwiSaver fund.
> Transfers back to New Zealand
No insurance offered through KiwiSaver.
Most superannuation funds, including First Super, have default insurance cover to provide a safety net for you and your family against life’s unexpected events.
Insurance cover is paid through super and is based on your age, account balance and eligibility.
You can also apply for Income Protection which can help pay bills if you cannot work due to a sudden illness or injury. This too can be paid through your super.
If you’ve moved to Australia from New Zealand, or you’re planning to in future, why not bring your KiwiSaver across the ditch?
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