Employees with special circumstances
KiwiSaver may affect some of your employees with special circumstances:
Employees aged 60 years or over
Any employee joining KiwiSaver who is 60 years or over must remain a KiwiSaver member for a minimum of five years. As a KiwiSaver member for those five years:
- they must have KiwiSaver deductions made from their salary (unless they’re on a contribution holiday)
- you must pay compulsory employer contributions for the five years provided the employee is still required to have deductions made from their pay
- you can claim the employer tax credit on your contributions, including any voluntary payments (up to the relevant threshold).
School employees
For the purposes of KiwiSaver, the Board of Trustees is the employer for employees in a state or integrated school. If an employee changes schools, they are treated as starting new employment and should be automatically enrolled even though they stay on the same payroll.
State Services employees
State Services employees who are serving overseas can join KiwiSaver if they:
- remain employed on New Zealand terms and conditions, and
- are serving in a jurisdiction where offers of KiwiSaver scheme membership are lawful, and
- meet other eligibility requirements.
Employees on New Zealand Superannuation
If one of your employees is a KiwiSaver member, receiving NZ Super and still working, you will need to deduct KiwiSaver contributions. To stop contributions being deducted your employee will need to apply for a contributions holiday.
KiwiSaver is designed to complement NZ Super, to give people a better standard of living in retirement. Being a KiwiSaver member does not affect eligibility for NZ Super.
Employees on Accident Compensation
If you take part in Accident Compensation Corporation's (ACC) partnership programme, or have an ACC employer reimbursement agreement, you continue paying an employee after an accident. Continue to deduct any KiwiSaver member contributions that were in place before the employee's accident. To stop member contributions being deducted from their salary or wages, your employee must apply to Inland Revenue for a contributions holiday. If your employee continues to make contributions, you may choose to continue making employer contributions, but you are not obliged to.
When ACC (and not you) pays weekly compensation to your employee, you don't need to:
- deduct member contributions from those payments, or
- make compulsory employer contributions.
Employees on paid parental leave
Member contributions and compulsory employer contributions don't need to be made if the employee is receiving parental leave payments from Inland Revenue. If you continue to pay an employee a salary or wage while they are receiving paid parental leave, keep deducting member contributions and making compulsory employer contributions unless they take a contributions holiday.
When an employee returns to work after taking paid parental leave, you'll need to resume deducting KiwiSaver contributions from their pay.
Changing jobs with the same employer
The automatic enrolment rules apply if an employee's new workplace has a separate payroll.
Example
Jenny works as a team leader for a hardware store in Hamilton and is not a KiwiSaver member. She moves to Auckland to be a team leader at a new branch. She is automatically enrolled in KiwiSaver, as the new branch has a separate payroll to the Hamilton branch.
Employees with more than one job
Employees with more than one job, who opt in, can choose to contribute from one or more of their jobs.
They can either opt in by giving a KiwiSaver deduction form (KS2) to one or more of their employers, or name one or more of their employers on their KS2.
They will have to contribute from any new jobs they start after opting in, but after twelve months they can take a contributions holiday to stop contributions from one or more of their employers.
Example
Roger has two employers - Perry's Petshop and Sally's Supermarket. He decides to opt in to KiwiSaver through Sally's Supermarket. Roger can choose to have deductions made from both Sally's Supermarket and Perry's Petshop or just Sally's Supermarket.
Roger's scheme provider will notify Inland Revenue of the named employer(s). Inland Revenue will write to the named employer(s) requesting contributions to commence. If Perry's Petshop is not notified by Inland Revenue they do not need to do anything.
The same situation applies if Roger is automatically enrolled through Sally's Supermarket - deductions from Perry's Petshop would only occur if Roger requests that deductions be made.
KiwiSaver deductions will need to be made for any new jobs that Roger starts once he is a KiwiSaver member.
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Date published: 08 Dec 2008
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