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Q.        My wife and I have come to New Zealand from Europe and we have both found good jobs in the Bay.  We have work permits to mid 2014 and we are applying for permanent residence.  We would like to join KiwiSaver - how do we do that?

 

A.       Congratulations on finding work here.  Unfortunately you will not be eligible to join KiwiSaver until you have been granted permanent residence. 

 

It is the responsibility of employers to enrol all eligible employees in KiwiSaver when they start their job.  Eligible employees are those living (or normally living) in New Zealand, and either a New Zealand citizen or entitled, under the Immigration Act 1987, to be in New Zealand indefinitely.  New Zealand citizens, Australian citizens, and people who hold either a New Zealand or Australian residence permit can join KiwiSaver.

 

I contacted Inland Revenue to find out if they are responsible for checking the eligibility of all new applicants when they are received.  It appears they are not.  A spokesman told me “It is the employer’s responsibility to determine if the employee meets the auto enrolment rules and the provider checks when the employee is default allocated. It is also the provider’s responsibility to check on eligibility when the member enrols directly with the provider.”

 

As some KiwiSaver applications do not specifically ask for an applicant’s residence status, this puts quite a responsibility on the shoulders of employers and providers.

 

I asked one of the larger employers in Hawkes Bay how they screened eligibility for KiwiSaver.  They told me “We determine eligibility viat the information an applicant provides us within their job appliation and this is verified at interview."

 

I then checked with one of our largest providers, ASB, to find out what they did to screen applications. Blair Turnbull, Executive General Manager Wealth and Insurance, told me “ASB sends every ASB KiwiSaver Scheme member a welcome letter and for auto-enrolled members we request that they complete and send back an additional information form. We use the information in this form to assess whether the member is eligible to join KiwiSaver.” 

 

What about people who come to New Zealand on working holidays.  Most have an IRD number, a New Zealand address and bank account details.  Could they join KiwiSaver directly? 

 

According to Blair Turnbull “All members that opt into the ASB KiwiSaver Scheme provide additional information as part of the application process which enables ASB to make eligibility assessments. Should ASB become aware that a member is not eligible to be a KiwiSaver member, the investor’s funds are returned to Inland Revenue.” 

 

As you’ve probably realised, KiwiSaver has attractive benefits, including the Government top ups and employer contributions.  Once you’ve got your permanent residence then you will be able to start building your KiwiSaver nest egg.

 

 

 

Shelley Hanna is an Authorised Financial Adviser FSP12241.  Her disclosure statement is available on request and free of charge by calling 8703838.  The information contained in this article is of a general nature and is not intended to provide personalised advice.  If readers have any KiwiSaver questions they would like answered please go to www.peak.net.nz or email shelley.hanna@peak.net.nz.

As published in the Hawkes Bay Today Tuesday 18 September 2012