Effective from 8 September 2010, the following outlines amendments made by the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act.
PAYE and KiwiSaver deductions for school children
- If employers aren’t required to make PAYE deductions from the salary or wage of a school child because the child is entitled to the tax credit for children, no KiwiSaver deductions are required to be made.
- School children whose total earnings from all employment are less than $45 a week don’t have to complete a Tax code declaration (IR330) form
Enrolment of under 18 year olds into KiwiSaver
- Children under 16 years old may only be enrolled with all their legal guardians consent - they may not enrol themselves in KiwiSaver.
- Children aged 16 to 17 must co-sign with one of their legal guardians in order to enrol in KiwiSaver. They won’t be able to enrol themselves and a legal guardian may not enrol a child aged 16 to 17 without the child's consent.
- Children aged 16 to 17 without a legal guardian (such as those who are married, in a civil union or living with a de facto partner) may opt in to KiwiSaver by contracting directly with a KiwiSaver scheme provider and therefore won’t need a co-signed application.
Electronic provision of annual reports
- A KiwiSaver scheme provider can now fulfil the annual report provision requirements by sending a hyperlink, which links to the annual report, via email.
- This will only apply to those members who have supplied their provider with their email address and have specifically agreed in writing, to receive the annual report by hyperlink.
- KiwiSaver members who currently have, or have held, an interest in a leasehold estate may now apply for a first home withdrawal from their KiwiSaver savings.
- This means that KiwiSaver members who have been, or currently are in a residential tenancy agreement, will not be excluded from the KiwiSaver first home buyer or KiwiSaver deposit subsidy schemes.
The first home withdrawal and deposit subsidy are not administered by Inland Revenue, so for more information about the eligibility criteria and subsidy entitlements, KiwiSaver members should contact Housing New Zealand.
If a KiwiSaver member who begins temporary employment requests an employer to make deductions and contributions, the employer will be obliged to do so.
Retirement savings portability with Australia
It may take up to two months after Australia passes the necessary legislation for the portability arrangements discussed below to come into effect. Australia may not complete their legislative process until 2011.
A person who has retirement savings in both Australia and New Zealand may now consolidate those savings into one account, in their country of residence.
- KiwiSaver members who permanently emigrate to Australia will be able to transfer their KiwiSaver funds, including all Government contributions, to an approved Australian superannuation scheme. They can no longer withdraw their savings after 1 year when emigrating to Australia.
- Members of an approved Australian superannuation scheme who are eligible to join KiwiSaver can transfer their Australian funds to a KiwiSaver scheme. This means that New Zealanders who have worked in Australia in the past and have superannuation funds there can transfer the money to New Zealand if they join KiwiSaver.
- Funds transferred to Australia continue to be subject to the withdrawal rules under the KiwiSaver Act (this only applies to the principal funds transferred, and not to any future accumulated interest). Similarly, funds transferred from Australia to KiwiSaver are subject to the Australian rules for withdrawal.
Date published: 08 Sep 2010
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