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Supplementary Order Paper No 158

  • withdrawn on 25 August 2010

No 158

House of Representatives

Supplementary Order Paper

Thursday, 19 August 2010

Taxation (Annual Rates, Trans-Tasman Savings Portability, Kiwisaver, and Remedial Matters) Bill

Proposed amendment

David Garrett, in Committee, to move the following amendment:

New clause 2(13):

To insert the following after clause 2(12):

  • (13) Section 76A comes into force on 1 December 2010.

New clause 76A:

To insert the following clause after clause 76:

76A Contribution rate

  • Section 64 is amended by repealing subsection (1) and substituting the following:

    • “(1) The contribution rate, in relation to an employee and to an employer and to each payment of salary or wages, is—

      • “(a) 2% of the employee's gross salary or wages, if––

        • “(i) section 60(1)(a), (b) or (c) first applied in respect of the employee on or after 1 April 2009 and the employee has not given his or her employer a notice under subsection (2); or

        • “(ii) section 66A applied in respect of the employee immediately before 1 April 2009; or

      • “(b) 4% of the employee's gross salary or wages, if section 60(1)(a), (b) or (c) first applied in respect of the employee before 1 April 2009 and the employee has not given his or her employer a notice under paragraph (b); or

      • “(c) 6% of the employee’s gross salary or wages if the employee gives his or her employer a notice requiring contributions to be deducted at that rate; or

      • “(d) 8% of the employee’s gross salary or wages if the employee gives his or her employer a notice requiring contributions to be deducted at that rate; or

      • “(e) 10% of the employee’s gross salary or wages if the employee gives his or her employer a notice requiring contributions to be deducted at that rate.”

Explanatory note

This Supplementary Order Paper replaces SOP No 144. The purpose of the SOP is to increase the flexibility of the KiwiSaver scheme by extending contribution rates to include 6% and 10% contribution rates in addition to the 2%, 4% and 8% rates currently in place. These changes will better enable KiwiSaver members to contribute the amount that is right for them. The 6% rate is a logical step given the current rates of 2%, 4% and 8%, while the 10% rate will give older savers an opportunity to contribute more near their retirement, or for younger savers to contribute more in saving for a first home deposit.