In the 2011 Budget, Government announced changes to KiwiSaver.
The planned changes to KiwiSaver for the 2012 income year include:
- The member tax credit (MTC) is to be halved for the next MTC year (ending 30 June 2012). Government will now contribute 50c for each $1 contributed by individual KiwiSaver members, to a maximum of $521.43 a year.
- ESCT (employer superannuation contribution tax) will apply to all employers’ cash contributions to employees’ superannuation funds including KiwiSaver accounts (and complying superannuation funds) from 1 April 2012. The rate will be equal to an employee’s marginal tax rate, which means employees may receive less employer contributions than they have received in the past.
Further KiwiSaver changes planned for 2013 include:
- There are proposed changes to employee and employer contribution rates from 1 April 2013 with the minimum employee contribution rate rising from 2% to 3% for all members.
- Compulsory employer contributions will rise from 2% to 3%.