Photo: RNZ
A first-home buyer who went to withdraw her KiwiSaver and found it was $800 less than she expected has been told it's due to time she spent overseas.
Sarah, who did not want her surname used, said she was told by her KiwiSaver provider that $800 had been taken to repay government contributions put into the scheme while she was out of the country.
"Bear in mind I have only ever been out of the country for an extended period of time twice - for my gap year straight after school - not eligible for government contributions then anyway - and then once for six months in 2023 but in both financial and calendar years, I paid the minimum $1042 contribution.
"I am going crazy, this feels so unfair. The day before I go unconditional I have to find a spare $800 because someone couldn't do their job eight years ago?"
She said she had told Inland Revenue she was away in 2023.
Her KiwiSaver provider, Aurora Capital, said the clawback amount was based on the information she provided in her withdrawal declaration. She was previously with MAS.
"Specifically, she indicated that she was outside of New Zealand in 2018-2019 and 2023-2024.
"The IRD calculates the clawback amount based on the member's entire KiwiSaver membership period, not just the most recent government contribution year. In Sarah's case, the clawback amount relates to multiple periods where she was not a New Zealand resident."
Inland Revenue said it was up to KiwiSaver providers to work out whether someone was entitled to the government contribution and IR was not trying to claw them back.
"It is a member's responsibility to let their KiwiSaver scheme provider know they are going overseas as it is the provider who needs this information to confirm any entitlement to the government contribution."
She said people were not eligible for a contribution when they were overseas unless they were working for the government or in some cases when they were working as a volunteer.
Financial adviser Rachelle Bland said these adjustments should not be something that was left until a member made a withdrawal.
"KiwiSaver managers provide letters of entitlement for first home withdrawals and members need to be able to rely on these. At the very least, these need to have a disclaimer or proviso for the ability for the IRD to do clawbacks so that people have a better understanding of this."
