KiwiSaver changes

Important information: Changes to KiwiSaver announced in Budget 2011

The 2011 Budget announced significant changes to KiwiSaver that you need to be aware of in considering whether to join KiwiSaver or if you are already a member. The changes are as follows:

Member tax credits

The maximum member tax credit will reduce to $521.43 per year for the KiwiSaver year ending 30 June 2012. The rate at which member tax credits match member contributions will also reduce from dollar to dollar currently to 50c for every dollar contributed. This means that to receive the maximum member tax credit an eligible member will still need to contribute $1,042.86 each KiwiSaver year (1 July to 30 June).

Employer superannuation contribution tax

The current tax exemption for compulsory employer contributions will cease with effect from
1 April 2012. From this date, the 2% compulsory employer contributions will have employer superannuation contribution tax (ESCT) deducted from them before being credited to the Scheme. The current ESCT rates can be found at www.ird.govt.nz/changes/employers/esct/.

The law changes required to reduce the member tax credit and remove the ESCT exemption have been made.

Employee and employer contributions

It is proposed that from 1 April 2013 the compulsory minimum employee contribution rate will increase from 2% to 3% of gross salary or wages. The default employee contribution rate for members who do not choose to contribute at a higher rate will be 3%.

It is also proposed that from 1 April 2013 the compulsory minimum employer contribution rate will increase from 2% to 3% of gross salary or wages.

These changes will apply to new and existing members.

The proposed changes to the compulsory minimum employee and employer contribution rates are Budget proposals only at this stage.

If you have any questions about these changes, please email us at askus@axa.co.nz, or call us on
0800 29 27 28.