In today's Q&A: under 18s and KiwiSaver; early access of KiwiSaver dollars and first quarter performance preview with Craig Simpson

In today's Q&A: under 18s and KiwiSaver; early access of KiwiSaver dollars and first quarter performance preview with Craig Simpson

Q) My 16-year-old daughter has just got her first part-time Saturday job. She has been enrolled in KiwiSaver since she was 13 and will make contributions through her new job. Will she be eligible for the member tax credits in addition to employer contributions?

A) At this time, government contributions in the form of member tax credits are not distributed to under 18s, even if they are already in the workforce.  Here's a link for her to bookmark for when she does turn 18. It explains how the tax credits are applied and when they take effect, which is on her birthday effectively.

Q) I am currently residing in Australia and was just wondering whether it is possible to withdraw my KiwiSaver in cash rather than transfer to my super which I currently have. I know New Zealand has signed off on legislation to this effect by Australia has not.

A) Yes, you are quite right. Australia has not yet signed off on the TransTasman Portability agreement which would allow you to transfer your KiwiSaver money into your Aussie super. (See an earlier Q&A plus video on this issue here).

The deal was supposed to have been concluded some time ago so surely it can't be much longer. No matter, if you have been living in Australia for a minimum of 12 months now and can proove your status there as a migrant, you are free to access your KiwiSaver money. You'll receive your kick-start, your contributions, employer contributions and all the returns, less whatever member tax credits Government has paid in. Depending on how long you've been in KiwiSaver, your patience (on waiting for the TransTasman agreement to go through) could be rewarded. That's beccause you'll get to keep the lot. 

To see how much you'll lose in member tax credits check out the My KiwiSaver website.

For more general information on tracking your contributions and Governments see the IRD's official explainer here.

To begin the process of withdrawing your KiwiSaver funds you'll need to contact your provider. You should be prepared to include a statutory declaration stating you have permanently emigrated from New Zealand. It needs to be supported by passport records, proof of residency in Australia. See the KiwiSaver website here for the full details on the rules around early access related to permanent migration. 

You're free to do with the money as you see fit however it it's earmarked for your retirement savings you could roll it into your super in Australia in the form of a lumpsum deposit or establish another long-term savings vehicle. 

1st quarter performance data

The numbers are starting to trickle in however early indications looks like those funds with heavier exposure to equities (shares) have recovered somewhat from the hammering they took in the previous quarter and in 2011.

Interest.co.nz senior analyst Craig Simpson said performance among some selective growth and aggressive funds over the last three years has been "well above 10% on an adjusted basis.'' 

Conversely, fixed interest funds, which last year fared well, have begun to retreat from 2011 highs. Some of the Fixed Interest funds (which are generally considered less risky) have had negative returns for the three months ending 31 March 2012. 

"It's a combination of things fees, tax, yields moving upwards (lowering returns on fixed-income),'' said Simpson.

Depending on timeframe for assessment, performance is a "mixed bag,'' he said.

"Over the year and two year data, it's really mixed. Some solid and negative results."

In general terms performance is best evaluated over a longer period of time because KiwiSaver is a long-term savings vehicle. Performance patterns start to emerge around the five year mark. 

Do you have  question about KiwiSaver? Check out our extensive list of reader generated questions (and our answers) here. 

If you can't find what you're looking form send us an email and we'll do our best to get you an answer.

Cheers,

Amanda

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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2 Comments

Our son was 18 at the beginning of December which means he will be eligible for 7/12 of the maximum tax credit as the year goes to 30 June 2012.
 
Questions.
Is the tax credit still $20/ week for this year or is it already $10?
How much does he have to contribute to get 7/12 of the maximum? He has some part time work while studying and we will top up his account so he gets the most he can.   Is it 7/12 of $1040?

Hi Waripori, I have posted a reply in our Q&A section to this. Cheers.
Amanda