The Trans-Tasman retirement savings portability scheme allows Australians and New Zealanders to transfer their superannuation savings between the two countries. Introduced in 2013, this scheme provides greater flexibility for individuals who migrate between Australia and New Zealand, allowing them to consolidate their super in their country of residence.
Key Features of the Portability Scheme
- The scheme is voluntary for both individuals and superannuation providers.
- Applies only to APRA-regulated super funds and New Zealand KiwiSaver schemes.
- Self-Managed Super Funds (SMSFs) and defined benefit schemes are not eligible for transfers.
- Transferred funds are generally subject to the superannuation and taxation rules of the receiving country.
Transferring Super from Australia to New Zealand
Australians who permanently migrate to New Zealand may transfer their superannuation to a KiwiSaver scheme, subject to certain conditions.
Requirements for Transfer:
- Proof of permanent emigration to New Zealand (e.g., statutory declaration, proof of residence).
- The full super balance must be transferred – partial transfers are not permitted.
- The receiving KiwiSaver scheme must accept Australian-sourced super funds.
Tax Implications:
- Transfers from Australian super funds are not taxed in Australia or New Zealand.
- Earnings within the KiwiSaver scheme will be taxed under NZ rules.
Access to Funds:
- Transferred funds cannot be used for a first home purchase.
- Funds can only be accessed at age 60, if retired, despite KiwiSaver’s usual access age of 65.
Transferring Super from New Zealand to Australia
New Zealanders who move to Australia can transfer their KiwiSaver balance into an Australian superannuation fund, provided the receiving fund accepts KiwiSaver transfers.
Requirements for Transfer:
- The entire KiwiSaver balance must be transferred – partial transfers are not allowed.
- Transferred funds must be separately identified within the Australian super fund.
Tax Implications:
- No tax applies on the transfer.
- The transferred balance is treated as a non-concessional contribution and forms part of the tax-free component.
Access to Funds:
- Funds cannot be transferred to an SMSF or a third country.
- KiwiSaver-sourced amounts cannot be accessed until age 65, even if the Australian preservation age is 60.
Financial Planning Considerations
Before transferring super, consider:
- Tax treatment and investment returns in the new country.
- Access rules for retirement savings (e.g., age restrictions differ).
- Potential exchange rate risks affecting the value of transferred super.
- Availability of insurance within the fund (KiwiSaver does not include life or disability insurance).
Final Thoughts
The Trans-Tasman portability scheme provides flexibility for individuals moving between Australia and New Zealand, but it is essential to understand the rules, tax implications, and access conditions before making a transfer. Consulting a financial adviser can help determine the best approach based on individual circumstances.