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Individual income tax Tāke moni whiwhi mō te takitahi

Distributions from superannuation schemes

When the distribution is treated as income for WfFTC and student loans

Part of a distribution from a superannuation scheme is treated as income for WfFTC and student loans if:

  • you receive the distribution from a superannuation scheme, excluding a Kiwisaver scheme or complying superannuation fund, and
  • your employer has made contributions in:
    • the tax year you received the distribution, or
    • either of the two years before.

However, you'll only need to include the distribution if:

  • you continued to work for the employer for one month or more after the date of the distribution, and
  • the distribution wasn't made because of your retirement.

You don't need to include the portion of the distribution that is attributable to the contributions you had made to the scheme.

If the distribution also includes any investment returns on the funds in the scheme such as interest, dividends or foreign investment funds the part attributable to the employer's contributions would also need to be included as income for WfFTC and student loans.

Example

Over the year Dennise's employer contributes $10,000 to Dennise's superannuation scheme. Dennise herself contributes $15,000 to the scheme. In that same year, Dennise receives a distribution from her scheme of the $25,000 that she and her employer contributed in that year, which earned $250 in interest. Dennise still works for the same employer.

Dennise needs to include the $10,000 contributed by her employer and the $250 in interest as part of her income for WfFTC and student loans. She doesn't need to include the $15,000 which she had contributed toward the distribution.