KiwiSaver Amendment Regulations (No 2) 2008

2008/307

Crest

KiwiSaver Amendment Regulations (No 2) 2008

Rt Hon Dame Sian Elias, Administrator of the Government

Order in Council

At Wellington this 15th day of September 2008

Present:
Her Excellency the Administrator of the Government in Council

Pursuant to section 229 of the KiwiSaver Act 2006, Her Excellency the Administrator of the Government, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Finance, makes the following regulations.

Regulations

1 Title
  • These regulations are the KiwiSaver Amendment Regulations (No 2) 2008.

2 Commencement
  • These regulations come into force on the 28th day after the date of their notification in the Gazette.

3 Principal regulations amended
4 New regulation 23 substituted
  • Regulation 23 is revoked and the following regulation substituted:

    23 Which types of mortgages qualify for participation in mortgage diversion facility
    • (1) A mortgage qualifies for participation in the mortgage diversion facility if—

      • (a) it is a mortgage over the mortgagor's principal residence; and

      • (b) it secures obligations that arise under a home loan facility, whether or not the mortgage also secures other obligations; and

      • (c) subclauses (2) and (3) are complied with at all times.

      (2) Contributions diverted from the member's KiwiSaver scheme or complying superannuation fund may only be applied to the payment of amounts (including principal, interest, or any other amounts payable) that are owing under the home loan facility secured by the qualifying mortgage.

      (3) If contributions are diverted in accordance with subclause (2), the member must not be able, without making a specific application to the mortgagee, to access, withdraw, or redraw (as applicable) the amount of any diverted contributions (in whole or in part).

      (4) To avoid doubt, the restrictions in subclause (3) apply even if the home loan facility—

      • (a) is a reducing revolving credit contract; or

      • (b) permits amounts that have been paid by that person over and above any repayment amount or minimum payment amount specified, or amounts that have been paid in advance of any specified schedule of repayments, to be accessed, withdrawn, or redrawn or otherwise advanced to that member (as applicable).

      (5) In this regulation, unless the context otherwise requires,—

      credit limit has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003

      home loan facility

      • (a) means a credit contract (within the meaning of section 7 of the Credit Contracts and Consumer Finance Act 2003) where the advances under the credit contract are primarily used or acquired for purposes in connection with the member's principal residence (even if the advances may also be used or acquired for other purposes); but

      • (b) excludes a non-reducing revolving credit contract

      non-reducing revolving credit contract means a revolving credit contract that does not expressly provide for a credit limit that reduces over the term of the contract according to a specified schedule of repayments

      reducing revolving credit contract means a revolving credit contract that expressly provides for a credit limit that reduces over the term of the contract according to a specified schedule of repayments

      revolving credit contract has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003.

Rebecca Kitteridge,
Clerk of the Executive Council.


Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on the 28th day after the date of their notification in the Gazette, amend the KiwiSaver Regulations 2006 with the following main effects:

  • mortgages qualify for participation in the mortgage diversion facility if they secure obligations that arise under a home loan facility, whether or not the mortgage also secures other obligations. Previously, mortgages were disqualified from participation in the mortgage diversion facility if they also secured obligations under a revolving credit contract:

  • loan facilities with a redraw facility are disqualified from participation in the mortgage diversion scheme, for example, contracts that allow money that has been repaid in advance of the repayment schedule to be readvanced to the mortgagor without making a specific application to the mortgagee. Previously, this was not a ground for disqualification:

  • the amendments allow all obligations mortgages to qualify for participation in the mortgage diversion scheme (as long as they also secure obligations in respect of the mortgagor's principal residence).


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 18 September 2008.

These regulations are administered by the Inland Revenue Department.