A buyer who moved from Australia transferred her Australian superannuation into KiwiSaver. After more than three years of membership she plans a first-home withdrawal. Which part of her balance cannot be withdrawn?
Correct Answer
A) The funds transferred from an Australian complying superannuation scheme.
Inland Revenue says a first-home withdrawal can include the member's contributions, employer contributions, government contributions and returns, but $1,000 must remain. Funds transferred from an Australian complying superannuation scheme cannot be withdrawn for a first home. The buyer must plan her deposit without those transferred funds.
Why This Is the Correct Answer
Inland Revenue expressly excludes Australian complying superannuation transfers from first-home withdrawals.
Why the Other Options Are Wrong
Option B: The government contributions (tax credits) paid into her account.
Inland Revenue lists government contributions among the amounts that can be withdrawn for a first home.
Option C: Her employer's contributions, which stay locked in until age 65.
Employer contributions can be withdrawn for a first home under the first-home withdrawal rules.
Option D: Any investment returns earned on her own contributions to date.
Interest and returns earned in the account can be withdrawn along with contributions.
Background Knowledge for Finance
Source: https://www.ird.govt.nz/kiwisaver/kiwisaver-individuals/getting-my-kiwisaver-funds-early/getting-my-kiwisaver-for-my-first-home
Exam Tip for Finance
Everything except $1,000 and any Australian super transfer can generally come out.
Common Mistakes to Avoid on Finance Questions
- β’Thinking government contributions are locked in; they can be withdrawn.
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