Generally, superannuation is money set aside for you by your employer while you work, so you have savings for your first home or when you retire. That’s why the Australian Government has certain conditions you need to meet before you can access it.
In Australia, superannuation is mandatory, and an amount contributed by your employer (usually the equivalent of 9.5% of your wage) is put into a superannuation fund that you choose.
NZRelo has specifically partnered with a super fund that allows KiwiSaver transfers to Australia so that your future Australian earnings will be combined with the amount of KiwiSaver you bring to Australia. Very few super funds allow this transfer to happen.
Unlike in New Zealand, your compulsory superannuation contribution does not come out of your pay – it is paid on top of your salary or wage from your employer automatically into a super fund. To be eligible to receive your employer contributions you must be working and paid more than $450 (before tax) each month. If you are under 18 (or the work is private or domestic in nature), you must work more than 30 hours a week. Unlike KiwiSaver, you cannot “opt out” of superannuation in Australia. Also, if you don’t choose a super fund when you start your first job in Australia, your employer will open an account on your behalf with their “default” superannuation fund. You also can’t choose to receive your superannuation as a cash payment.
You can make additional voluntary contributions to your Australian super fund while you work in Australia. This may help you have more money put aside for your retirement, either in Australia or in New Zealand, as small additional contributions now) can add up over time.
In Australia, once you reach preservation age (currently 65 years old, or earlier if you have permanently ceased work), you can choose how you would like to receive your super benefits – either as a lump sum, a regular income payment, or a combination of both. This provides sweet flexibility depending on your lifestyle and personal retirement dream.
What’s the difference between superannuation in New Zealand and Australia?
One of the main differences between Australia and New Zealand is the way in which the word “superannuation” is used.
In Australia, superannuation generally comes from contributions that your employer makes throughout your working life, this is called the superannuation guarantee (SG). This money is invested by the super fund and the money earned on these investments is added to your account. You are also able to make “voluntary” contributions if you wish to save more for your retirement. The Australian Government may also contribute to your superannuation if you satisfy certain criteria.
These funds are “locked” in place until you reach preservation age, and you cannot withdraw them earlier unless you satisfy certain conditions (e.g. experience extreme financial hardship or become severely injured or disabled and can no longer work). Under the First Home Super Saver scheme rules super can be used to make a down payment on your first home.
In short, Australian superannuation is similar to a KiwiSaver account, but with slightly different rules. In New Zealand, when you turn 65, you may be eligible for NZ Superannuation – which in Australia would be called a “pension”.
This is a sponsored advertising promotion by First Super Pty Limited (ABN 42 053 498 472, AFSL 223988) as trustee of First Super (ABN 56 286 625 181). This publication may contain general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consult the Product Disclosure Statement (PDS) firstsuper.com.au/pds before making any investment decision. Before making a decision to combine your superannuation, you should consider any costs, change to insurance cover or loss of benefits that may apply and, if necessary, consult a qualified financial adviser. Past returns are not a reliable indicator of future returns. Content was accurate at the date of issue in July 2020, but may subsequently change. Please contact First Super on 1300 360 988 for updated information or to obtain a copy of the PDS. No commissions or fees are paid to NZ Relo as part of this promotion, apart from advertising costs.