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McLEAN
AND CO.
NEW CLIENTS
Residential Tenancies Reforms Announced
After 12 months in the scheme, members will be free to pause their contributions by taking a contributions holiday for a minimum of three months, and up to five years at a time. At the end of the chosen holiday period, contributions to Kiwisaver will automatically begin again unless the contributions holiday is renewed.
Participation in KiwiSaver may not suit everyone. Some people may be concentrating on repaying debt or have other arrangements to save for their retirement. However all employees aged between 18 and 65 starting a new job on or after 1 July 2007 will automatically be enrolled in Kiwisaver (with the ability to opt out between two to eight weeks after starting work if they wish). Existing employees (along with self employed, beneficiaries and minors under the age of 18) can also decide to opt in.
The Government will make an up-front contribution of $1000 and provide a contribution towards members' administration fees. This up-front contribution will not be able to be withdrawn to purchase a first home, in cases of serious illness or for significant financial hardship.
Employer Obligations- What will you be required to do?
As an employer, you will be required to:
![]() | provide a KiwiSaver information pack (supplied by IRD) to all new employees, existing employees who join the scheme, and any employee who asks for one |
![]() | automatically enrol new employees, (who have the option of opting out between two and eight weeks of starting work), in KiwiSaver |
![]() | provide IRD with the details of new and exising employees who join KiwiSaver via your business |
![]() | deduct employees KiwiSaver contributions from the salary or wages paid to employee members and forward them to IRD along with PAYE |
There are a number of options open to your business under the KiwiSaver Act. You can choose whether to:
![]() | make employer contributions to KiwiSaver. Employer contributions to KiwiSaver will be exempt from Specified Superannuation Contribution Withholding Tax (SSCWT Tax) subject to a cap of the lesser of the employee's contribution or 4 per cent of their gross salary or wages |
![]() | elect a KiwiSaver provider for your employees who do not select their own. If you elect a chosen KiwiSaver scheme for your employees, you will be required to provide an investment statement for that scheme to all new employees and those who opt in |
![]() | apply for an exemption from the automatic enrolment requirements if you have an existing registered superannuation scheme that meets certain criteria |
![]() | establish a KiwiSaver scheme within your current superannuation scheme |
![]() | convert your current superannuation scheme to a KiwiSaver scheme. This may require the consent of all existing members of the current scheme, unless the benefits of the KiwiSaver scheme to which they would be transferred would be equivalent to or better than those relating to their current scheme. |
How will KiwiSaver affect me?
KiwiSaver gives you an opportunity to make regular payments to a savings scheme. You can choose not to join KiwiSaver and you will only be formally offered to join if you change employers. You can opt into a KiwiSaver scheme, and you do this by contacting your payroll administrator, or another registered provider directly.Is it a requirement that all employers offer KiwiSaver to new employees?
No. Although most employers will have to provide their employees with access to KiwiSaver, there are some exceptions;![]() | employers with an exempt superannuation scheme | ||
![]() | employers who do not pay employees via the PAYE system, and
![]() employers who do not have employees resident in New Zealand.
| |
Who is eligible to join KiwiSaver?
Any NZ citizen or person entitled to be in NZ under the Immigration Act, who is under the age of eligibility for NZ Superannuation (currently 65 years) can join KiwiSaver either when they start a new job, or if they choose to join. Only a natural person can be a member, which means you can’t put your membership of KiwiSaver into the name of a family trust or company.
When does automatic enrolment in KiwiSaver apply?
You will be subject to automatic enrolment in KiwiSaver when you start a new job, subject to the exclusions listed below.![]() | are under 18 or over NZ Superannuation eligibility age (currently
65),
![]() have changed job on same payroll (ie: promotion),
| ![]() are on a new payroll but the new employer is carrying on the same
business and the IRD has been notified (ie: takeover of a company),
| ![]() are not paid through the PAYE system (ie: contract workers),
| ![]() are already a member of KiwiSaver (you must disclose this and provide
a KiwiSaver deduction notice to your new employer),
| ![]() are a casual agricultural worker employed for less than 3 months,
| ![]() are employed for a short term (less than 4 weeks), ie: temporary or
contract workers paid through the PAYE system,
| ![]() are not a New Zealand citizen or entitled to be here indefinitely
under the Immigration Act 1987. | |
What if I don't want to join KiwiSaver?
If you don’t want to join KiwiSaver and have gone through the automatic enrolment process, you need to fill in the opt out form provided in the KiwiSaver information pack and give it either to your employer or direct to the IRD.
What if I already belong to an existing superannuation scheme?
You can keep making contributions to an existing scheme as required. If the scheme allows it, you may be able to make KiwiSaver contributions to this scheme, or you can also contribute to a separate KiwiSaver scheme. Should you do this, these contributions could be on top of the existing superannuation scheme’s required contributions.The government will provide a $1,000 “kick-start” contribution for
each new member, together with a subsidy on fees (the amount of fee subsidy is
still to be determined).
They are also offering a first home buyers deposit subsidy after 3 years, to a
maximum of $5,000 after 5 years membership (calculated at $1,000 per year for
a maximum of 5 years).
If you have a mortgage and you have been a member of KiwiSaver for at least 1
year, you may request that up to half of your contribution (but not your
employer’s contribution) is used to help pay the mortgage on your family
home.
Employer contributions to a KiwiSaver scheme will be exempt from tax, subject
to a cap of the lesser of any contribution you make or 4% of your gross salary
and wages.
You cannot withdraw money from KiwiSaver until the later of your attaining the
age of eligibility for NZ Superannuation (currently 65) or 5 years membership,
except in certain limited circumstances. These include:
![]() | significant financial hardship or serious illness,
![]() purchase of a first home,
| ![]() a settlement under the Property (Relationships) Act, or
| ![]() permanent emigration. | |
How will I know when my contributions have been received safely by the IRD, passed to my chosen provider and invested?
IRD is planning a website for employees to view their contributions that have been paid.
What ongoing reporting about my savings will I receive?
Providers are required to provide annual members’ statements. Other service standards will apply to deal with changes to information and members’ questions.
REMINDER ABOUT OLD COINS
Fron 1 November the old 50,20,10, cents coins will no longer be accepted by shops and businesses. Furthermore the 5 cent coin will be taken out of circulation. The Reserve Bank of New Zealand (via the major trading banks) will still accept them.
RESIDENTIAL
TENANCIES REFORMS ANNOUNCED
Building Issues Minister Clayton Cosgrove has announced proposed
amendments to the Residential Tenancies Act and to landlords’ and
tenants’ advice and dispute resolution services.
“The key issues identified in the review of the Act included a lack of
stable tenure for longer term tenants, variable standards of rental housing
and a lack of knowledge among landlords and tenants on their rights and
responsibilities," Cosgrove said.
Proposed amendments include new property entry rights for landlords for the
purposes of an appraisal by a real estate agent or building inspector, and
allowing landlords to recover reasonable debt collection costs incurred in
enforcing Tenancy Tribunal Orders through a private debt collection agency.
It is also proposed to make some tenant breaches unlawful acts that can
result in exemplary damages being awarded, as an alternative to eviction.
These would include sub-letting, assigning a tenancy without consent,
over-populating the premises or becoming a problem neighbour.
The government has also instructed the Ministry of Justice to examine faster
and easier ways for landlords to collect unpaid rent.
It is proposed that the Tenancy Tribunal be able to make an order against a
guarantor of a party to a tenancy agreement. Currently if a landlord wishes
to pursue the guarantor to a tenancy agreement (eg for rent arrears) they
cannot go to the Tenancy Tribunal – they must go to a District Court or
Disputes Tribunal.
Landlords who breach building health and safety regulations may face
financial penalties payable to the tenant.
Greater protection for fixed term tenants is proposed by compelling
landlords to notify tenants at least three weeks before the tenancy period
ends if they are not going to renew the contract. Fixed term tenancies that
expire with no new agreement being signed will automatically become periodic
tenancies, whereby tenants must give three week’s notice if they want to
end the tenancy and landlords must give three month’s notice.
Fixed term tenants will also be allowed to apply to end a tenancy early, in
the event of a substantial and unexpected rent increase.
Landlords who intend being abroad for more than three weeks will be required
to appoint someone in New Zealand to manage their tenancies for the duration
of their absence.
A draft bill will be developed for Parliament to consider next year.
In addition to the legislative amendments, there will be changes to the
Department of Building and Housing’s tenancy advice and dispute resolution
services. The new measures include face-to-face services in more locations
throughout New Zealand, an online application service and telephone
mediation.
The service changes include:
· Extended hours for phone advice: 8am to 5.30pm weekdays instead of 8.30am
to 4.30pm
· New Tenancy Tribunal application forms
· Access to face-to-face services in 17 more locations throughout New
Zealand
· A new phone mediation service to resolve straightforward disputes
· The introduction of online applications to the Tenancy Tribunal.
In total there are now 85 centres where landlords and tenants can sit down
with a mediator, get advice or pick up resources. The additional community
venues, which will now provide services by appointment, are located in
Putaruru, Mangakino, Murupara, Te Kuiti, Kawerau, Opotiki, Turangi,
Paraparaumu, Hornby, Rangiora, Amberley, Waimate, Hokitika, Fairlie, Twizel,
Alexandra and Wanaka.
A phone mediation service, ‘Swift’, has been set up to resolve
straightforward tenancy disputes within 24 hours. An example is an
application for rent arrears where both the tenant and landlord agree that
the rent is behind and they require mediation to reach an agreement about
how the arrears will be paid.
Other reforms currently under way across the building and housing sector
include: the review of the Building Code, the licensing of building,
auditing and accrediting building consent authorities, changes to the
Weathertight Homes Resolution Service, the introduction of a financial
assistance pilot for the worst affected owners of leaky homes, product
certification and investigating a home warranty insurance scheme.
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All text must
be copied without modification and all pages must be included.
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|
This document
must not be distributed for profit.
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If we can assist further, please email McLean and Co as follows: