Rainey Collins Lawyers

KiwiSaver Changes

By Alan Knowsley, Wednesday, 10 June, 2009, Business, Employment, General

The key changes to KiwiSaver that took effect from 1 April 2009 are as follows:

• The minimum employee contribution rate will reduce to 2% of before tax pay.  Employees will still be able to contribute at the current rates of 4% and 8% but will need to notify their employer to reduce contributions to 2%.
• The compulsory employer contributions will increase to 2%, but will not increase past this level in the future.
• The exemption from Employer Superannuation Contribution Tax will be capped at 2 %.
• The employer tax credit will be discontinued.
• Employees will have to pay tax on any employer contributions made over the 2% rate.
• The $40 annual fee subsidy will be removed.

No change will occur to the following provisions:

• Automatic and voluntary enrolment will continue with the ability to opt out after 3 weeks.
• Member tax credits of $20 a week will continue.
• $1,000 kick start payment will continue.
• Mortgage diversion, deposit subsidy and first home withdrawal provisions will also continue.

If you are an employer or employee and would like to discuss any of the above changes please call us on our freephone 0800 733 427 for a relaxed and confidential initial chat.

Call us Toll Free on 0800 733 424