Statement of Intent 2007-10: Part two - Strategic context
Implementing government initiatives
Changes to government programmes and the introduction of KiwiSaver have significantly increased the demand for our service. We are collaborating on much of our new business with other government agencies in areas such as policy advice, service delivery, cross-agency governance arrangements and programme evaluation.
KiwiSaver
KiwiSaver is a voluntary, work-based savings programme that begins on 1 July 2007. The Government wants to encourage New Zealanders' savings habits and the accumulation of assets through KiwiSaver, improving people's financial wellbeing, particularly in retirement. We will administer the scheme through the PAYE system and forward contributions to external providers for investment.
Inland Revenue has been preparing for KiwiSaver by:
- developing people, systems and processes necessary for the successful operation of the scheme in conjunction with existing systems
- providing information to employers and employees
- establishing relationships with investment providers to ensure the quick and accurate processing of KiwiSaver contributions.
Over the next three years we will be working closely with employers, investment providers, the Ministry of Economic Development, Housing New Zealand Corporation and The Treasury to ensure the successful operation of KiwiSaver. Significant changes have also been made to the taxation of investment income and specified superannuation contributions withholding tax. These are intended to provide more consistent rules to encourage lower and middle-income earners to invest through managed funds and other financial intermediaries.
Information and enquiries from the public will be answered through our call centres, correspondence and the KiwiSaver website.
Changes to the student loan scheme
Student loans are jointly administered by the Ministry of Social Development through StudyLink, the Ministry of Education and Inland Revenue. Our role is to manage loan repayments from borrowers.
Major changes to the student loan scheme came into effect in April 2006. The changes made loans interest-free for borrowers living in New Zealand for 183 or more consecutive days and introduced a non-resident amnesty. The original amnesty period ran from 1 April 2006 to 31 March 2007.
Further changes came into effect in March 2007 which extended the amnesty and introduced a repayment holiday for borrowers going overseas. The amendments are designed to remove barriers to borrowers living overseas who want to return to New Zealand. The changes also introduced new repayment obligations for overseas borrowers, interest free loans to full-time undergraduates, and extension of the amnesty for those who have fallen into arrears with their repayments.
Other changes include a reduction in the late payment penalty for all borrowers, and provision for data-matching between Inland Revenue and the Customs Service to ensure correct entitlement to interest-free loans.
For more information about student loans and the recent legislation changes, please refer to the student loans section of this website.
Working for Families Tax Credits phase three
From 1 April 2007, a number of changes were introduced to Working for Families Tax Credits (previously called family assistance). These included an increase in the level of financial support we pay families and the enhancement of our customer services to them.
Increased financial support
The family tax credit increased by $10 per week per child from 1 April 2007, and the income threshold for the minimum family tax credit increased. A further 9,000 families will become eligible for Working for Families Tax Credits during the 2007-08 tax year. We introduced a regular adjustment to ensure that family tax credit rates and income thresholds keep up with inflation.
Enhancing our services for customers
During 2007, we will:
- enhance our online services to enable customers to view and update their personal information in real time and to make it easier for them to register for online services
- manage risk by identifying and proactively contacting customers at risk of receiving an incorrect entitlement, and helping them to receive their correct amounts
- enhance our community engagement approach. We will identify ways to improve the delivery of information to customers with Working for Families Tax Credits, child support and paid parental leave information needs.
For more information, please refer to the Working for Families Tax Credits section of this website.
Date published: 19 Jun 2007
Back to top