Guidelines to KiwiSaver Providers
14 November 2016 Earthquake
Related hardship claims
Form to be used for the Statutory Declaration (SD):
While applicants can obviously continue to use the scheme forms, we have a simplified statutory declaration form that they can complete, modelled on the form used in response to the Christchurch 2011 event, attached. If a scheme form is used, please ensure that you note that the application is or is thought to be related to this civil emergency.
Who can witness the SD:
It is highly likely that individuals over the first few weeks may struggle to get their SD witnessed in line with current requirements. We will accept witness by a police officer, fire officer, lawyer, chartered accountant, or chartered engineer. In any case where a witness is not possible, inquiry should be directed to the Trustee for guidance.
Alternative sources of funding and documented evidence of hardship basic living costs:
The test that all reasonable sources of alternative funding have been explored and exhausted, and the requirement to have reasonable documentary evidence of hardship will not be applied in respect to meeting the basic living costs, calculated by the WPS guidelines.
Repair and replacement works:
For urgent or emergency repairs up to $10,000 value, we will not apply the alternative funding test or evidential test.
Non-urgent and works above $10,000 value, we will apply a reduced alternative funding test, as we would seek to understand what if any EQC and insurance coverage exists, and we will require some evidence of need and cost.
We believe that the reduced witness and evidential requirements will remain in effect for at least two months, while we see no time frame in place in respect to the trustee scope for leniency in exercising discretion for earthquake related applications.
KiwiSaver HomeStart grant changes - August 2016
The KiwiSaver HomeStart grant criteria changed in a range of important respects effective immediately today and a detailed outline of the changes (produced by Housing New Zealand) is set out here.
In summary terms:
- the income caps of $80,000 and $120,000 (see above) are now $85,000 and $130,000 respectively;
- the existing house price caps ($550,000, $450,000 and $350,000, differing by region) have increased to:
- $600,000, $500,000 and $400,000 for existing/older properties; and
- $650,000, $550,000 and $450,000 for new properties.
The realisable assets test is now based on the relevant regional house price cap for an existing/older property, and the limit remains at 20% of the applicable home price cap. In Auckland, this means a home buyer can now have realisable assets of up to $120,000 (i.e. 20% of $600,000).
The maximum KiwiSaver HomeStart grant levels themselves are unchanged, at:
- $5,000 per member (maximum $10,000 for two or more purchasers who are qualifying members) for an existing house ; and
- $10,000 per member (maximum $20,000 for two or more purchasers who are qualifying members) for a new home, a property bought off the plans or land on which to build a new home;
after in each case 5 or more years of contributing to KiwiSaver.
Home purchase withdrawal (previous property owner) - removal of income limit
As KiwiSaver scheme providers will already be aware, on 1 July 2016 the KiwiSaver withdrawal rules were changed to make it easier for those who have previously owned property to access their KiwiSaver savings in order to re-enter the housing market.
Until 30 June 2016, in order to be a ‘qualifying person’ for the purposes of clause 8 of the KiwiSaver Scheme Rules (allowing withdrawals for the purchase of a first home) a person who had previously held an estate in land was required by Housing New Zealand:
- to have realisable assets of not more than 20% of the applicable home price cap; and
- not to have earned in the last 12 months more than $80,000 (for an individual) or more than $120,000 (for two or more purchasers).
On 1 July 2016 the income limits were completely removed, meaning previous home owners with low to moderate levels of realisable assets can now access their KiwiSaver savings to buy a home regardless of income.
Housing New Zealand must still carry out a determination of the member’s financial position based on the level of their assets, so it remains the case that:
- in the first instance a previous home owner looking at a home purchase withdrawal must apply to Housing New Zealand (this can be done by way of an on-line application through www.kiwisaver-homestart.co.nz or http://www.hnzc.co.nz/ways-we-can-help-you-to-own-a-home/); and
- if deemed to have realisable assets similar to a first home buyer, the member must then pass the letter received from Housing New Zealand to their scheme provider.
It is important to note that income caps (as amended today – see below) continue applying with respect to KiwiSaver HomeStart grants – they have been removed solely with respect to withdrawals.
As the eligibility criteria for each home ownership feature (previous property owner withdrawals and the KiwiSaver HomeStart grant) now diverge, all relevant applicants – i.e. those wanting both a HomeStart grant and a previous home owner savings withdrawal -must now complete two separate application forms.
Both forms can be either submitted online or downloaded from the Housing New Zealand website (see above) and then scanned and emailed or posted back for assessment.
This change also impacts on other scheme providers (e.g. complying superannuation fund trustees) whose home purchase withdrawal facilities incorporate the KiwiSaver Scheme Rules by reference.
Introducing KiwiSaver HomeStart
The KiwiSaver HomeStart grant was introduced on 1 April 2015, to replace the KiwiSaver First Home deposit subsidy.
Like the KiwiSaver first-home deposit subsidy, the KiwiSaver HomeStart grant provides eligible first home buyers with a grant of up to $5,000 for individuals and up to $10,000 for couples to put towards a deposit for an existing home.
In addition, the new KiwiSaver HomeStart grant will also provide eligible first home buyers with a grant of up to $10,000 for individuals and up to $20,000 for couples to help with the costs of building or purchasing a brand new home.
Below are some frequently asked questions:
When can I apply for a KiwiSaver HomeStart grant?
Housing New Zealand will start accepting applications for KiwiSaver HomeStart from 1 April 2015, when HomeStart comes into effect.
Do I have to be a member of KiwiSaver to apply for a HomeStart grant?
Yes, to apply for a HomeStart grant you need to be a member of a KiwiSaver scheme, complying fund or exempt employer scheme. You can contact your scheme provider to check eligibility.
What is meant by a “new home”?
Eligible purchasers can use their KiwiSaver HomeStart grant towards a new property. This include the following options, provided that the land types are either fee simple, stratum estate freehold and leasehold, cross-lease, leasehold and multiple owned Maori land:
What is the maximum grant amount or number of grants that can be used for the purchase of a single dwelling?
For an older/existing property the maximum grant amount is $10,000 for a single dwelling. For a new property, the maximum grant amount is $20,000 for a single dwelling.
If I have a valid KiwiSaver deposit subsidy pre-approval that is due to expire sometime after 1 April 2015, do I automatically get a KiwiSaver HomeStart pre-approval?
No, you will be required to complete a new application and to submit it for consideration. This is because there are some differences between the products.
Is there a limit to the value of the house I can purchase and still qualify for a HomeStart grant?
Yes, the price caps vary by region:
I am looking at purchasing a brand new apartment off the plans from a developer. The developer has indicated that to secure the apartment that I want, I need to pay them a $20,000 deposit upfront. Can I use the KiwiSaver HomeStart grant for this?
Yes. If you’re eligible for a KiwiSaver HomeStart grant, you can arrange for your grant to go towards the first payment that you make under the agreement with the developer.
I am buying an existing property. Can the KiwiSaver HomeStart grant be paid as part of the deposit I need to pay to the real estate agent handling the sale?
Unfortunately, no. For the purchase of older/existing properties, the earliest the HomeStart grant can be paid is on the morning of the property settlement.
I entered into an agreement to buy a house and land package with a developer several months ago. The property is due for completion in June 2015. I have paid the developer a $40,000 deposit. Can I still apply for the grant and if eligible, when's payment?
You will need to complete a HomeStart grant application form and submit it along with the required supporting documents from 1 April 2015 onwards. As you are not due to settle until June, this provides sufficient time to process the application and if eligible pay the grant. As you have already paid the deposit to your developer, if you are deemed to be eligible for the grant, then the funds would not be released to your solicitor until the new property is due to settle. Therefore, you will need to provide us with confirmation that the property has received a code compliance certificate and certificate of title no later than 10 working days prior to the agreed settlement date.
How soon do I need to move into the property I am building, in order to keep my KiwiSaver HomeStart grant?
If you are buying land to build your first home, you must at the time of submitting your application, provide a copy of the fixed price building contract that also clearly states the anticipated construction completion date. You must then provide a copy of the code compliance certificate on or before this date. If you are buying a property off the plans, you need to commence residing in the property from the settlement date. However, the agreement you submit with your application will need to stipulate a construction completion date, in order to be considered.
I am buying a section on which I will have my first home built. What do I need to submit with my application form to be considered for a HomeStart grant?
In addition to the completed application form and supporting documents that all applicants need to submit, you will need to provide us with a copy of a signed fixed price building contract that clearly shows the agreed cost to build your home and a completion date for the construction of the property. You will also need to include a signed copy of the sale and purchase agreement for the land that you are buying.
I am a previous home owner. Can I apply for the KiwiSaver HomeStart grant?
Yes. The general eligibility criteria for the KiwiSaver HomeStart grant is the same as for the KiwiSaver Deposit Subsidy. Therefore, provided you no longer have an interest in property and are deemed to be in the same financial position as a first home buyer in terms of income and realisable assets, you could still qualify for the HomeStart grant.
I was considering applying for a KiwiSaver deposit subsidy pre-approval in March. However, now that HomeStart is launching on 1 April 2015, what should I do?
If you are considering applying only for a pre-approval and you do not have a signed agreement for sale and purchase, we would recommend that you hold off and wait to apply for a HomeStart pre-approval from 1 April. That way you may also be able to consider new build properties (which weren’t covered by the KiwiSaver deposit subsidy) and you will be eligible for the new house price caps that come into effect from 1 April. If you apply for a KiwiSaver deposit subsidy prior to 31 March 2015, you will only be entitled to purchase a home with the existing house price caps and you will only be eligible for the $3,000 to $5,000 subsidy.
Welcome to a future of new opportunities
We’re delighted to announce an exciting new alliance between FANZ and Staples Rodway.
From 31 March 2015 the Staples Rodway KiwiSaver scheme will be managed by FANZ.
For FANZ investors, Staples Rodway’s strong proposition for investors with portfolios of over $1 million complements our existing capabilities.
For members of the Staples Rodway KiwiSaver scheme it will be very much business as usual. However they will benefit from the economies of scale available through FANZ’s capability and size.
Staples Rodway and SBS Bank both place a strong emphasis on long term customer relationships and sound risk management. A culture of integrity is common to both partners.
We look forward to welcoming Staples Rodway KiwiSaver scheme members to the FANZ family.
Changes to the KiwiSaver first home withdrawals & Housing NZ Subsidy
The government has announced that with effect from 1 April 2015 it will help more first home buyers into a home of their own through changes to KiwiSaver.
The government will:
- Replace the KiwiSaver First Home Deposit Subsidy with a KiwiSaver HomeStart Grant, doubling the support for buying a new home and increasing the house price limits:
- Increase house price limits for the HomeStart Grant to $600,000 in Auckland, $500,000 in Wellington, Christchurch, and similarly-priced markets, and $400,000 for the rest of the country.
- Enable larger KiwiSaver First Home Withdrawals by including the member’s tax credit (meaning first home buyers will now be able to withdraw all of their KiwiSaver savings except for the Government $1,000 kick-start).
While the government can elect to change the house price caps and introduce higher subsidies for first home buyers via policy, the change to the KiwiSaver First Home Withdrawal requires legislative change to be made to the KiwiSaver Act 2006.
The requisite legislative change is contained in the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill, which is currently before the Finance & Expenditure Select Committee, and needs to be passed before the First Home Withdrawal change can go live.
For KiwiSaver providers any potential delays may result in a need to communicate with prospective members wishing to access the enhanced ‘package’ and may introduce transitional procedural complication.
Some issues we have identified include:
- The Taxation (KiwiSaver HomeStart and Remedial Matters) Bill has yet to be enacted.
- The proposed changes will invariably require you to change your application form. We recognise that providers might wait until the legislation is finalised before they complete this task.
- Revised application forms will need to incorporate a revised statutory declaration covering the requirements in S.17 of Schedule 1 of the KiwiSaver Act 2006.
- Because of the need for the above actions, and given the new rules won’t be crystallised until the legislation is passed, there may be resultant delays (i.e. after 1 April 2015) before you are able to pay-out MTCs as a part of any KiwiSaver First Home Withdrawal.
- If any MTC claw-back is required, the same process that is used currently will apply for first home withdrawals. This may also push out your existing first home withdrawal service levels.
- You will need to explore all necessary transition processes. For example, will you still accept old application forms, and if yes how will you then obtain the necessary MTC statutory declaration.
- Only MTC’s already received by the provider for the member are eligible to be withdrawn (i.e. there will not be a process for an ad-hoc claim for part year MTCs).
- Any MTC paid out will need to be recorded, so that this information can be passed-on in the event of the member subsequently changing providers.
- Any MTC paid out to a member for a first home withdrawal will not need to be paid back to the Government should the member later decide to permanently emigrate.
- KiwiSaver providers who are banks – please consider putting First home withdrawal and HomeStart grant into your online home buyer calculators.
Workplace Savings NZ has made a submission to the Finance & Expenditure Select Committee strongly recommending that KiwiSaver provider be given compliance relief from the Securities Act 1978 in respect of the changes introduced by the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill.
We have also reached out to both the Real Estate Institute of NZ and the New Zealand Law Society to ensure that the members of those organisations are aware of the changes and have thought through the implications.
Lastly, we understand that Housing NZ will have KiwiSaver HomeStart grant information available on their website later this week. It will only be high level details at this stage and the majority of the information provided is in the form of Frequently Asked Questions. We also understand that the new HomeStart application form will likely be available from Friday 27 March 2015. The form will be downloadable from the Housing New Zealand website www.hnzc.co.nz. Currently they are processing more than 1,000 applications per month, which is expected to increase significantly from 1 April 2015. This in turn could impact on processing timeframes.
2015 Budget Announcement
2011 Budget Changes
The 2011 Budget announced significant changes to KiwiSaver that you need to be aware of in considering whether to join the Lifestages KiwiSaver Scheme.
The changes are as follows:.
1. Starting from the year commencing 1 July 2011, the maximum member tax credit reduced to $521.43 per year. The rate at which member tax credits match member contributions also reduced from dollar for dollar to 50c for every dollar contributed. This means that to receive the maximum member tax credit a member who qualifies to receive member tax credits still needs to contribute $1,042.86 each member tax credit year (1 July to 30 June).
2. The tax exemption for compulsory employer contributions ceased with effect from 1 April 2012. Since this date, compulsory employer contributions have had employer superannuation contribution tax deducted from them before being credited to the Scheme. Deductions are made at the following rates (which may change in the future):
$16,801 to $57,600
$57,601 to $84,000
Your 'income' is your gross salary and wages plus employer superannuation contributions, before deduction of employer superannuation contribution tax, in the previous year (or an estimated amount if you have worked for less than a year).
3. The minimum member contribution and compulsory employer contribution rates are expected to increase to 3% of gross salary or wages from 1 April 2013. 3% will become the default member contribution rate for members who do not choose to contribute at a higher rate. As at 1 October 2012 the legislative changes required to complete this had not become law.
If you have any questions about these changes or would like an update, please call 0800 502 442.
Under proposed amendments to the KiwiSaver Act 2006, if you have reached age 65 (and have been a member of a KiwiSaver scheme or complying superannuation fund for five years) you will be able to give your employer(s) a notice (called a ‘non-deduction notice’) requiring them to stop deducting contributions from your salary or wages.
A non-deduction notice will be valid for the first payment of salary or wages after the notice is given to your employer and will apply until you revoke it. You will not be able to revoke a non-deduction notice within three months of giving it, unless your employer agrees.
These changes are contained in the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill which, as at 1 October 2012, had not become law. If you have any questions about this change, or would like an update, please call 0800 502 442.