All New Zealand residents and people entitled to live here permanently up to the age of 65 are eligible for KiwiSaver.
Government:
- Contributes $1,000 (tax free) when a member first joins.
- Pays annual member tax credit (for those 18 and over) of up to $1,042.86.
- Pays fee subsidy of $20 every 6 months.
- Funds first home deposit subsidy through Housing NZ if criteria met.
- Exempts employer contributions from specified superannuation contribution withholding tax (SSCWT) up to a maximum of 4% of employee's gross pay.
Note: There is no Crown guarantee of KiwiSaver schemes or investment products of KiwiSaver schemes.
Employers:
- Must give new employees and other staff who are interested an Employee information pack (KS3).
- Pass employee’s details to Inland Revenue to enable them to be enrolled.
- Deduct contributions from employee’s gross salary. (The Employer monthly schedule (EMS) has been adjusted for KiwiSaver – download the payroll specifications for 2008 from the IRD website.
More details on the Employer’s role are available on the IRD website.
Budget 2007 includes a proposal that from 1 April 2008 employers will:
- Match employee contributions. This will be phased in over four years; starting at 1% of an employee’s gross salary and rising to 4% by 1 April 2011.
- Receive a tax credit of up to $20 a week per employee.