Why did I have to give my ex half my KiwiSaver? - Ask Susan

Send your questions to susan.edmunds@rnz.co.nz

I am separated, just 1.3 months out. My ex and I would argue over KiwiSaver.

He did not think it was worth it as he was self-employed. I did what was right by my family and got back into work ASAP after having our two daughters and contributed to bills, mortgage and KiwiSaver.

When we split his lawyer said KiwiSaver is relationship property.

Long story short at the end of our 25-year relationship he had $5000 versus my $56,000 in KiwiSaver. I contributed to the mortgage and everything else fairly though our relationship. He walked away with $25,000 and I got $2500 from him. He is a successful architect who also kept the home. I had to walk away due to not having enough money to fight in court.

The law is flawed. I get it should be shared if one parent stays home but when both have been working and one decides to save and the other spend there is no coming back.

People need to know about KiwiSaver being relationship property, and act accordingly. Our daughters and their partners are having the conversations now to protect their future.

This sounds really tough. In theory, the idea is that KiwiSaver is relationship property in the same way that your income during the relationship is relationship property (even if you keep it in separate accounts). Usually couples are working together for financial and other goals in a way that people who are just flatmates are not. I know it doesn't always work that way in practice, though, and the process of getting a fair outcome when you split can be a difficult one.

I agree people should be aware that KiwiSaver is relationship property - and also that any savings or investments you make during a relationship are likely to be relationship property. For lots of people, that's appropriate, but for others it won't be and in those situations you could look at a contracting out agreement. Note that even those agreements can be overturned in some cases.

Dean Anderson, the founder of Kernel Wealth, said divorce was one of the biggest triggers for individuals to seek professional financial advice for the first time.

"Whether you're in a new romance or a long-term partnership, having open conversations about money is crucial. This means discussing your personal values around money, individual spending and saving habits, shared financial goals and expectations and ground rules for managing joint finances.

"Being transparent about money matters isn't always comfortable, but it builds trust and can prevent misunderstandings that might otherwise escalate into serious conflicts.

"If you are struggling with it, speaking with an independent financial adviser/planner can really help, they often say they act as a therapist for couples helping them work through their different perspectives to achieve their combined goals."

My NZ Super is offset by the amount I receive from the US. The issue for me is that US Social Security is contributory - a percentage is deducted from what a person earns. When a person retires the amount received from Social Security is calculated from a complex formula that includes how much was paid into the system and the number of years the person contributed.

The point from the above paragraph is that the individual directly contributes to the system, unlike in NZ. Despite that significant difference, NZ considers the US, and other country's pensions, to be "similar" to the NZ pension and reduces what the person receives from NZ.

Fair? I say no. If a person receives a pension from a private pension scheme, there is no offset. When you dig deeper, you will find that several years ago, Winston Peters publicly stated that he would fight to end the offset. He has obviously changed his mind.

A last point - many US and Canadian citizens, who are also NZ citizens, have taken the NZ govt to court to reverse the rule. None of them have won.

I'm aware that this is an issue that has been a major problem for a long time for a lot of people receiving pensions from overseas. There are tens of thousands of people who are affected by this.

It can be particularly tough on people whose NZ Super is reduced because of their partner's entitlements.

You're right that it's something that Winston Peters has raised as an issue in the past. I asked whether it is on the agenda for the Coalition government and I'm told: There are no plans to review the treatment of overseas superannuation at this point in time.

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