Don't bet house on Aussie Super

Last year my partner and I transferred our Australian Super funds into our respective KiwiSaver accounts, only to find out that we cannot put this money toward buying our first home. Can you please explain the legislation and whether there is any way around it? Neither our fund manager nor IRD could explain this to me. Secondly, my partner has already owned and sold a home before, before joining KiwiSaver. Is he eligible as a First Home buyer to access his KiwiSaver?

Answering your second question first, anyone who has owned freehold property (including a section), even if they are not current owners, is treated as a second-chance buyer.

They may still be able to access their KiwiSaver funds (and even qualify for a HomeStart grant) as a second-chance buyer but need to apply to Housing New Zealand to find out if they are eligible.

This option is only available to those in a similar position to a first-home buyer with limited assets.

Your partner should contact Housing NZ for more information. Some good news for you - from July 1, the Government is scrapping the income limits for second-chance KiwiSaver home buyers.

Do fund managers check that First Home applicants have not owned property before, when they apply to withdraw their funds?

I asked ANZ and a spokesperson responded: "Anyone applying for a First Home Withdrawal from their KiwiSaver account needs to complete a statutory declaration contained in the application form.

This form requires the member to declare under oath that they have not held an estate in land before - whether alone or jointly with another person.

It is a punishable offence to provide a false statement ... we don't do a title search as the statutory declaration covers the point."

So on to your other question - why can't you access your Aussie Super?

When living in Australia, you were not allowed to use your Super to buy a home there.

When Aussie Super is transferred to KiwiSaver that restriction remains in place.

I asked Nicola Rawnsley, an associate with Willis Toomey Robinson Scannell Hardy lawyers in Napier, to provide a legal explanation.

She replied: "The Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 introduced the portability of funds held in superannuation schemes between New Zealand and Australia and in particular, the ability for members of a complying Australian Superannuation Scheme to transfer their funds to a New Zealand KiwiSaver Scheme if they permanently move or return to New Zealand to live.

However, that portability does not go as far as allowing those funds to be withdrawn in accordance with the withdrawal provisions of the KiwiSaver Act 2006.

"Section 8 of Schedule 1 of the KiwiSaver Act 2006 provides for members to withdraw some of their funds to purchase the member's first home (or in limited circumstances as a second chance purchaser if a member has previously owned property).

Subsection (4) provides that a member may not make a withdrawal of more than an amount equal to the member's accumulation, at the time of the withdrawal, less the sum of $1000 and the amount that was transferred from an Australian complying superannuation scheme.

Therefore, funds transferred from Australia are not available for the first-home purchase."

Fund managers are keen to see their clients top up their KiwiSaver with any Australian Super they may have.

Investors should weigh up all the pros and cons before making a decision.

- Shelley Hanna is an Authorised Financial Adviser FSP12241. Her free disclosure statement is available on request by calling 06 870 3838 or go to www.peak.net.nz. The information in this article is general and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz