Kiwisaver Info

As is often the case when the Government makes last minute changes, the implementation suffers. As an employer I don’t yet have the Kiwisaver employee packs I need to give to my staff. We don’t even have the forms they need to fill in to opt in.

The Dom Post reports on some questions from people about the scheme. It is a pity they did not provide the answers also, but I’ll do it for them:

Mr Scott said KiwiSaver contributions should be made tax-deductible, which would make the scheme more appealing to employers and employees.

Contributions from the employer are fully tax deductible. Contributions from the employee get a tax credit which for most employees is worth far more than merely having a contribution tax deductible. Here is the value of the tax credit vs a tax deduction at each level:

$26,000 – $1,040 credit vs $203 deduction
$45,000 – $1,040 credit vs $594 deduction
$65,000 – $1,040 credit vs $1,014 deduction
$100,000 – $1,040 credit vs $1,560 deduction

At $66,666 a tax deduction on your 4% contribution would be worth more than the tax credit.

Sales assistant Janine Bogoievski said she wanted to know what would happen to any savings if she or her husband died early.

They become property of the estate and go to the beneficiaries in the will.