Government Approves KiwiSaver Changes
Changes approved by the Government today are attributed to making the KiwiSaver scheme affordable for tax payers, members and employers.
There have been no changes to these Kiwisaver provisions…
- The $1,000 kick start payment will not change
- The $20 a week member tax credit will not change
- The first home withdrawal, deposit subsidy and mortgage diversion provisions will not change.
Changes to KiwiSaver however are…
- The employer tax credit is to be discontinued from 1April 2009
- Compulsory employer contributions are to be capped at 2% effective from 1 April 2009
- The member fee subsidy will be discontinued from 1 April 2009
- From 1 April 2009 the minimum member contribution rate will reduce to 2% and all new employees will have a 2% default rate. Existing members will be able to reduce to 2% but this is not recommended.
Thorners is still of the belief that only those that do not understand Kiwisaver are those that are not members.
Contact us to obtain more information and a copy of our disclosure statement.
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KiwiSaver Mortgage Diversion
KiwiSaver Mortgage Diversion is almost with us. Many KiwiSaver members become eligible after contributing for 12 months and final sign off by the Bank’s and Government is expected shortly.
Mortgage Diversion will allow up to half of a members personal KiwiSaver contributions to go towards paying off the personal mortgage on their home, so long as the mortgage provider and their chosen KiwiSaver provider offer this facility.
Not all mortgages will qualify for Mortgage Diversion under KiwiSaver regulations, e.g. currently KiwiSaver contributions cannot be diverted into a mortgage that contains a revolving credit facility or a mortgage secured over a property held in a family trust. It is also limited to a saver’s principle residence (i.e. the family home). Secondary properties like holiday homes, investment properties and LAQC’s are excluded.
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