NZ-based Kiwis can tap A$20,000 from Oz super savings

Kiwis who rushed back from Australia may be able to tap into their Australian superannuation savings. Photo / File

Kiwis who fled back to New Zealand from Australia fearing a lack of financial support are being allowed to tap into their Australian superannuation savings.

But KiwiSaver accounts remain out of bounds unless members meet the same strict financial hardship criteria that was in place ahead of the coronavirus pandemic.

The Australian Government announced in late March that Australian and New Zealand citizens and permanent residents could tap into up to A$20,000 from their Australian superannuation accounts provided they meet certain criteria.

While temporary Australian residents, which is likely to include thousands more Kiwis, are also being allowed to access up to A$10,000 from their Australian super accounts if they are unable to meet immediate living expenses.

Around 650,000 New Zealanders were estimated to live in Australia before the pandemic broke.

So far, more than 1.2 million people had already withdrawn A$10 billion from their Australian superannuation accounts.

On Friday a spokesman for the Australian Tax Office said it was unable to provide any information about how many New Zealanders had accessed the early release scheme.

But he said New Zealand citizens and permanent residents do not need to be physically based in Australia to be eligible to apply for the up to $20,000 release.

Eligible New Zealanders can apply online through the Australian Tax Office and have until June 30 to apply for one-off access to up to $A10,000.

New Zealand citizens and residents can also apply for the second tranche of up to A$10,000 between July 1 and September 24.

To be eligible New Zealand citizens and residents must also either be unemployed or eligible to receive a job-seeker payment or range of other benefits and allowances, or, from January 1, they were made redundant, had their working hours reduced by 20 per cent or more, or were a sole trader whose business was suspended or had a 20 per cent or more reduction in turnover.

"New Zealand citizens and permanent residents do not need to be physically based in Australia to be eligible to apply. However, funds cannot be withdrawn from KiwiSaver accounts directly."

The spokesman urged those applying to carefully review the eligibility criteria and be honest when applying for early access to their superannuation.

"People should be assured that across all of the stimulus measures, where they are trying to do the right thing, we will support them. However, we will be reviewing applications and where we have concerns that the claim was not made genuinely, we may apply penalties.

"The penalties that apply vary based on the facts and circumstances of each case. They can range from monetary penalties through to prosecution in exceptional cases."

The New Zealand Government has deflected calls to make it easier for people to access KiwiSaver during the Covid-19 crisis pointing people towards other support packages like the employer wage subsidy and Jobseeker allowance.

Asked about calls for changes to the financial hardship process in late March a spokesman for Commerce Minister Kris Faafoi told the Herald it urged people to look at the range of government help being offered first before opting to withdraw money from KiwiSaver.

"The Government is acutely aware that Covid-19 is threatening financially difficult and stressful times for many New Zealanders.

"It's why we have put together substantial packages of support in wage subsidies and business relief, along with other assistance, such as a rent freeze, to help people through these difficult times."

Richard Klipin, chief executive of the Financial Services Council which represents KiwiSaver providers, said he believed the Government here had made the right call as the average fund size in New Zealand was very different to Australia.

The average account balance in New Zealand is around $20,000 with about $60 billion invested in the scheme, whereas the Australian superannuation is worth about A$3 trillion and account balances are much higher.

"Pulling out $20,000 not only would be material to current circumstances but the long-term value is huge," he said.