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My question is around KiwiSaver. Our situation is I’m self-employed and the wife is in full-time employment. Currently I don’t contribute to my own KiwiSaver other than to get the government bonus, as otherwise we feel I’m kind of paying myself for my own KiwiSaver being self employed, but what we have done is set the wife’s KiwiSaver to 8 percent voluntary contribution.
Our theory is hers will now grow faster, therefore getting the end balance up faster than us both at 4 percent due to higher investment and the interest working better for us on a higher investment value.
Are we looking at this correct or have we missed the boat completely?
This seems like a reasonable strategy to me. KiwiSaver is generally relationship property, so even if you separated you would probably have a claim to the investment.
There really aren’t many incentives for self-employed people to be in KiwiSaver these days, except for the $260 a year from the government. Some people value the fact your money is locked away to a greater extent than it would be if you were in a standard managed fund. Others see this as a drawback.
I think it’s just important that, if you are self-employed and choose not to save for your retirement with KiwiSaver, that you do something else instead. It sounds like you’ve thought about that and have a plan.
It might be that in future there are incentives brought in that make KiwiSaver make sense and you could reassess at that point.
I would just urge you to check in regularly to make sure you’re on track to have enough for your retirement, and make adjustments as required if not.
When does the new FIF [Foreign investment funds] rule come into effect? Is it immediately?
Lots of investors have been pleased to hear the government’s plan to push up the foreign investment funds threshold to $100,000 from $50,000.
Deloitte tax expert Robyn Walker told me that although the change is intended to apply from this April, we’re unlikely to have the legislation passed for it before the election.
I read an answer you gave on the RNZ website to a correspondent about NZ Super, which I don’t think fully answered the question. And I see this issue of NZ Super and time overseas keeps coming up, so I suspect that it is a huge area of interest where the level of overall knowledge is really poor … The correspondent had lived in Australia for most of their working life. They were also currently doing some part-time work, and were living with their mum. Your answer picked up the part-time work and living arrangements aspects, but didn’t touch on their time overseas.
I think I am right in saying that being born in 1962, they need 12 years of NZ residence between 20 and 65 to qualify. The question seemed to suggest that they would have 9 when they turned 65 in 2027: from 20 to 24 (since they left NZ in 1986) and from 60 to 65 (since they returned to NZ in 2022).
Now they would also be able to rely on their years of residence in Australia to qualify. However, my understanding is that they can only do that once they turn 67 (the pension age in Australia). So I think a key part of the answer to them is that they are likely to need to wait until 67 to be able to claim NZ Super.
Yes this is correct – if you’re relying on time spent living in Australia to meet the New Zealand Super residency requirements, then you might find you have to wait until the Australian age of eligibility to qualify.
My apologies, I have fielded lots of questions about moving in either direction and have sometimes left out various aspects. You can see more on the residency requirement here.
I am Australian by birth, but a Kiwi by loyalty. I have been living and working in Australia and sending funds to NZ to grow my investments for many years. Those investments have been paying tax since 2003 every year. I finally moved to NZ to live in 2022 after the Covid restrictions were lifted. Am I eligible to receive NZ Superannuation without having to apply to Centrelink in Australia first?
You can apply for NZ Super but as above, you might have to wait till you’re 67 if you’re relying on time in Australia to meet the residency requirement.
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