Is KiwiSaver for everybody?

Published 17 July 2007, Posted in National

Tiaho has had a number of enquiries from people with disabilities who receive a benefit from Work & Income about whether they can join KiwiSaver.

KiwiSaver was launched on 1st July 2007 and is promoted as being a voluntary work based saving scheme designed to make it easier for New Zealanders to save for the future. Most people are not aware that this scheme can also be accessed by Work and Income beneficiaries and people receiving ACC compensation payments.

Why is the scheme not being promoted to all New Zealanders especially as only half the number of people expected to sign up have. This scheme is not just for those who are currently working or starting employment. People with disabilities are also concerned about their financial position for the future and should be considered when promoting a scheme that they are entitled to contribute to. It is not just a ‘Voluntary Work Based Saving Scheme’ but a ‘saving scheme designed to make it easier for all New Zealanders to save’.

John Povey, Vice Chair of the Whangarei Accessible Housing Trust and DPA committee member says “People with disabilities are generally not encouraged to save, now that I am aware that people receiving a benefit can join KiwiSaver by contributing $5 to $10 a week or what ever they can manage and receive all the other benefits, I will be looking at joining”.

The government will help you save with KiwiSaver by giving you a $1,000 tax free kick-start, a member tax credit of up to $1,042.86 each year which equates to approximately $20 a week (government will match what you contribute up to that amount), subsidise the fees charged by your scheme provider by $40 per year and, if you qualify, you may be eligible for a first home deposit subsidy.

The scheme is administered by Inland Revenue, which collects members’ contributions through the “pay as you earn” (PAYE) tax system. Contributions are then passed on to the member’s chosen KiwiSaver scheme provider to be invested. Beneficiaries can join the scheme, but they must make payments directly to Inland Revenue or to the KiwiSaver provider they have chosen.

With KiwiSaver you can choose a savings scheme to suit you. There is a range of scheme providers and several investment types, from conservative risk to growth funds. You can change schemes at any time, but you can only belong to one scheme at a time.

KiwiSaver isn’t guaranteed by the Government. This means that you invest in a KiwiSaver scheme at your own risk. If the government changes and the incoming government decide to stop KiwSaver, you will still get all of your money back. You can also withdraw some of your money if you meet certain criteria.

There are a number of providers for KiwiSaver, follow this link to view their contact details.  They offer a suite of investment products and will assist you with choosing the best scheme to suit your situation.

Be aware that scheme providers are offering different schemes and have different criteria and costs for joining. Make sure you ring around to find the right scheme for you. If you receive compensation form ACC you will be able to choose whether to have KiwiSaver contributions deducted from your payments.

You will be able to access your savings when you’re eligible for New Zealand Superannuation (NZ Super) or after five years’ membership, whichever is later. You can also access some of your savings and receive assistance from the government to purchase your first home.

For more information go to: http://www.kiwisaver.govt.nz or talk to your bank.

View Thursday 28th June episode of Close Up ‘KiwiSaver queries’ for an interesting interview about KiwiSaver and the pros and cons of being in the scheme.