KiwiSaver funds for 'Aussies' locked
A former Southland couple's dream of owning a home in Australia has been put on hold because they cannot access their KiwiSaver funds because of new trans-Tasman rules being introduced.
The couple fear other New Zealanders who have permanently emigrated to Australia may also have been caught out.
Australia and New Zealand have reached an agreement to allow transfers of retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver funds.
But the rules also mean that, from July 1, New Zealanders who have permanently moved to Australia will not be able to withdraw their KiwiSaver funds early. They will have to wait until they are 65.
Former Southland woman Sarah Lamont said she and her partner, Chance Morris, who live in Melbourne, planned to buy a home with the help of $10,000 Morris had in his KiwiSaver account.
Morris, when telling his KiwiSaver provider ASB he wanted to withdraw his $10,000, was made aware the application should be in by June 14 because it could take up to 10 working days to process.
However, he got the application in late, on June 18, and was told the cutoff date for new applications had passed. This means he now has to wait until he is 65 to withdraw the money.
"We are really fed up and upset," Lamont, said.
Morris has laid complaints with the KiwiSaver team and ASB customer care, but said he was not holding his breath.
He contacted ASB and was told he should have received an email with a deadline. Morris said he did not receive the email and ASB could not source it.
An ASB spokeswoman said the withdrawal applications needed to be done well before July 1 because of the requirement to collect member tax credits from the Inland Revenue Department before the final payment.
"We recognise the pending change regarding cash payment to emigrants in Australia may have snuck up on people given the short lead-in time before the change. We apologise for any confusion and we will be contacting customers directly to discuss the situation."
Morris and Lamont said they would now have to wait until they had saved enough to put a deposit down on a house, which could take three or four years.
A Banking Ombudsman spokeswoman said the office became aware of the issue last week when it received two online complaints from bank customers.
The bank informed the ombudsman it was aware of the concerns and was looking into the complaints as a matter of urgency.
‘"Under our terms of reference, bank customers must first go through a bank's internal dispute resolution process before we are able to formally investigate," the spokeswoman said, adding it was monitoring the issue.
An Inland Revenue spokeswoman said the department was unable to comment on a KiwiSaver provider's decisions or internal processes.
The Southland Times