Changes to KiwiSaver in Budget 2011

KiwiSaver logoSome changes to KiwiSaver were announced last week in the Budget of 19 May 2011.

Briefly:

  • The Government's maximum matching contribution in Member Tax Credits will reduce from $1,042 a year (or $20 per week) to $521 a year (or $10 per week) with effect for the tax year ending 30 June 2012. The change will not affect Member Tax Credits payable for the tax year to 30 June 2011.

    So from 1 July 2011 the MTC contribution will be 50 cents for every dollar up to $1,042 per year; and
  • The minimum employee and employer contribution rates will rise from 2% to 3% on 1 April 2013; and
  • The current employer superannuation contribution tax (ESCT) exemption for employer contributions of up to a maximum of 2% of an employee's gross salary or wages will no longer apply from 1 April 2012, meaning all employer contributions will be subject to ESCT.

Whilst not as attractive as before the changes KiwiSaver still gives you $1,000 just for joining (kickstart) and for every dollar you invest up to $1,042 a year the Government will invest $521. So there are still incentives. If you haven't already join now and take advantage of this "free money" for your retirement.

To join KiwiSaver call us on 07 578 3863 or if you have any questions or concerns as to how this may affect your existing scheme please call us on 07 578 3863.

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KiwiSaver Logo"This website is operated by Bay Financial Partners Limited  and is not endorsed by, or affiliated with, the government or Inland Revenue. Bay Financial Partners Limited is using the KiwiSaver trade mark and logo under licence from Inland Revenue. To view the official New Zealand government KiwiSaver website, please click here."
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The information on this site is intended as a guide only. The information is of a general nature and does not and cannot ever constitute personal advice.
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