Australian Prime Minister Scott Morrison and New Zealand Prime Minister Jacinda agreed on the change at their meeting last month. Photo / File
Australian Prime Minister Scott Morrison and New Zealand Prime Minister Jacinda agreed on the change at their meeting last month. Photo / File
Kiwis who have unclaimed superannuation money in Australia could soon find it easier to bring it back home and add it to their KiwiSaver account.
The New Zealand and Australian Governments have reached an agreement allowing law changes to be made in each country so the money can be transferreddirectly from the Australian Tax Office (ATO) into KiwiSaver accounts.
An Inland Revenue spokeswoman said under Australian law, money held by Australian superannuation schemes must be transferred to the ATO when an account becomes inactive and the member cannot be contacted.
An account is considered to be inactive if no money has been received by the superannuation fund for that account within the last 16 months, the account balance is less than A$6000 ($6487), it is not a defined benefit account, there is no insurance on the account and the account is not held in a self-managed super fund.
Australian super funds are required to identify inactive low-balance accounts twice a year, on June 30 and December 31.
Funds must transfer the money to the ATO within four months of that date unless an account holder gives written notice electing for that not to happen, or changes their investment choice or insurance.
The IRD spokeswoman said New Zealanders were currently only able to transfer reclaimed money from the ATO to a complying Australian superannuation scheme.
"This means that, for these savings to be recouped, they must first be transferred to a new Australian superannuation account before then being transferred to a KiwiSaver scheme."
She said legislative amendments had now been made that would enable the transfer of New Zealanders' reclaimed money directly from the ATO to KiwiSaver schemes.
"The Trans-Tasman Retirement Savings Portability Arrangement governs the portability of retirement savings between Australia and New Zealand."
She said officials were now working on the changes needed to the arrangement so the direct transfer of savings from the ATO to KiwiSaver schemes could start.
"IR officials are engaging with the ATO and KiwiSaver scheme providers to develop and establish the operational practices for reuniting New Zealanders with their unclaimed Australian Super.
"All parties are committed to establishing a process that is robust and as easy to use as possible."
But she could say when the new transfer process would kick in.
"It's a work in progress and I don't know a date when it will be operational."
Returning Kiwis could soon find it easier to bring their Australian superannuation money back home. Photo / NZME
New Zealanders have been able to transfer their Australian Superannuation savings to a KiwiSaver account since July 2013, but it took four years to make it to happen.
Former prime minister Sir Bill English signed an agreement with then Australian Treasurer Wayne Swan in July 2009 but it took until September 2010 for legislation to pass in New Zealand's Parliament.
While New Zealanders can transfer their money from an Australian Superannuation fund to KiwiSaver they can't use the money to buy a first home - a situation which has left many returning Kiwis feeling frustrated.
However, money transferred from Australia can be withdrawn when a member turns 60 if they meet the definition of being retired under Australian rules.
Kiwis who save into KiwiSaver while in New Zealand can only withdraw their money for retirement at the age of entitlement to New Zealand Superannuation - currently 65 years old.
