Super Over the Ditch
I have quite a few Kiwi friends over the years who have travelled over the ditch to Australia. Whether it’s to escape the weather, find employment, or start a new life. Since the year 2000, the number of Kiwis migrating to Australia has doubled which is interesting but not nearly as interesting that NZ has seven times as many sheep and three times as many cows as people!
When it comes to super in Australia
I find that my friends and Kiwi clients have no idea how our super works and what to do with their KiwiSaver account if they have one. The first thing I tell them is don’t worry, most of us Aussies don’t understand how our super works either! However, that’s changing as the industry slowly educates everyone. Most people don’t enjoy rules and there are many rules around super which can make it complicated. In a nutshell, the main idea of super is to help us with our long-term savings for retirement. What a lot of us don’t know is that it can also be a cost-effective way of holding personal insurance and a tax effective way of saving and investing.
Kiwi’s will find out soon enough that it is compulsory here in Australia for employers to pay their employees (who are eligible) currently 9.5% of their salary into a complying superfund. Whereas back home KiwiSaver is completely optional. If you want to transfer your KiwiSaver you must transfer your whole balance and any annual member tax credits you received while residing here will be returned to the NZ Government. Currently there are only about 5 superfunds in Australia that will accept KiwiSaver money and once it’s rolled over, it can only be accessed via a condition of release and it cannot be rolled over to another super fund in Australia that doesn’t accept KiwiSaver. So, what do you do?
Personal insurance in Australia
Generally, most Aussies are protected somewhat through group cover in their super for insurance which I believe isn’t the best but at least it’s some cover whereas Kiwi’s don’t have this privilege through KiwiSaver as insurance is not attached. Therefore, most kiwis migrating into Australia don’t have insurance cover and probably won’t be exposed to it until they start a new job, a business, have a significant event in their life such as buying a house, getting married or having a baby. But what if you’re not exposed at all? The fear is should an unplanned event happen, you could potentially struggle financially, lose your job, your house and more. Can Kiwi’s hold insurance if they are not permanent residents of Australia? Can kiwi’s get a disability payment from Government? How do you set up insurance and what suits your needs? Where do you start?
Retirement in Australia
Retirement is said to be one of the most stressful milestones in life. Now imagine you’re retiring in another country! There’s always so many questions, so many things to think about and right at the time when you’re meant to be enjoying life, you’re stressing about whether you have made the right decisions. Are you sure of where you want to retire? What if I transfer my kiwi saver over and then change my mind can I transfer it back? How much can I transfer over? Will my money last? What are the rules here in retirement? Do I own property back home? Will I have to pay tax? What if I need aged care? Can I get any help from the Australian Government? How can I get answers?
There is a point to this blog! You don’t have to try and work any of this out for yourself. If you are planning on travelling across the Tasman to the land down under or are already here, I urge you to seek a financial planner to help understand your options.
Points of reference
Kiwi Saver http://www.kiwisaver.govt.nz/
ASIC’s Money Smart: https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works