KiwiSaver & Student loan changes...2020/02/19 · • Account summary screen –loan balance,...
Transcript of KiwiSaver & Student loan changes...2020/02/19 · • Account summary screen –loan balance,...
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KiwiSaver & Student loan changesWebinar for Employers & Not-for-profit organisations19 February 2020, 2:30pm – 3:30pm
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Rata Kamau,
Transformation
Account Manager
Welcome to our webinar
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How to participate
Control panel
Slides
Presenter info
Submit your questions here
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KiwiSaver & Student Loans changes
KiwiSaver:
• A quick summary
• A few numbers
• Recent policy
changes
• Key changes &
impacts
Student loans:
• What customers
are saying
• Policy changes
• Key changes &
impacts
• myIR changes
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• Started on 1 July 2007
• Long-term savings habit for
retirement
• Employers & scheme providers
play an important role
KiwiSaversummary
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KiwiSaver numbers
3,011,000New Zealanders use KiwiSaver to save for their retirement -as at 31 December 2019
$799 millionGovernment contributions paid out to 1.9 million members in 2019 processed in an average of 6 days in 2019
In the last year, 39617 first home buyers withdrew a total of $953
million, a 32% increase from prior year ($723 million)
$6.06b Transferred to scheme providers for New Zealanders’ retirement saving in 2018/19
Employer contributions passed on in an
average of 26 days in 2018/19
Employee deductions passed on in an
average of 22 days in 2018/19
80mB2B messages were sent to scheme providers in 2018/19
$46.1 billionPassed on to KiwiSaver scheme providers since 2007
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Recent KiwiSaver policy changes
From 1 April 2019:
• Two new contribution rates: 6 % & 10%
• Contribution holiday renamed to Savings Suspension
• Member tax credit (MTC) renamed to Government Contribution
(GVC)
From 1 July 2019:
• KiwiSaver opened to all ages
• New members not locked in for 5 years before they can withdraw
From 1 April 2020:
• Members who enrolled before July 2019 (aged 60 – 64) can opt
out of 5-year lock-in period
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Key changes from April 2020
• KiwiSaver administered in our new system
• Several proposed policy changes to alleviate pain points
o Voluntary transfer period reduced from up to 35 to 10 days
o Provisional period for new members reduced from 3 to 2
months
o Employer contributions government guaranteed
o Interest calculations calculated from pay date reported by
employer
o Three month residency grace period will be removed
o Members can make full or partial withdrawal before turning
65 (life-shortening conditions)
o New B2B platform and improvements
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Member impacts
• New enrolments – notify member and provider of PIR rate
• More info to determine correct PIR on our website
• Employer contributions invested sooner
• Increased visibility of contributions and deductions in myIR
• Request option to export customer (for HomeStart grant)
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myIR for KiwiSaver Members
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Impacts for scheme providers
• Transition to new B2B service over time
• New digital platform – more self-service options and reduced effort
• Access to myIR – complete actions previously managed via B2B/mail
• Improved investment opportunity
• Increased obligation - 10 working days instead of up to 35 to
complete voluntary member transfer
• Member calls transferred to scheme provider in some instances
• Provide new information to IR not previously requested
o Member transfers initiated
o Government contribution claim information
o Increased number of reason codes to determine action required
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myIR for scheme providers
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Reports in myIR for scheme providers
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Impacts for employers
• Improved onboarding process for new employees
o Supply employee’s legal first and last name
o KS1 (enrolment) and IR346 (new employee details) combined
into one “Employee Details” section
o KiwiSaver status collected for new employees, not existing
employees
o One-off, advise of any income received exempt from KiwiSaver
contributions (new employee)
• Frequency of contact with IR will be different
• New notifications
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Employee onboarding - myIR
Employee onboarding will include both the IR346 and the KS1.
First and last name fields mandatory and will default to being the name on the EI. If employer wants to have a different name, they will have the option to change this.
Employers need to advise of any income that will be received by a new employee that is exempt from KiwiSaver contributions.
Employers will only need to provide IR with a KiwiSaver status for new employees. This will no longer be collected for existing employees.
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Student Loans
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What’s changing?
• Administer student loans on new system
• Increased administrative efficiency and process automation
• More effective management of loan debt
• New customer centric loan services
• Better promotion of options already available, currently not used by student loan customers
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Recent legislative changes
• Interest no longer charged and written off – from 1 April 2020
• Changes to definition of adjusted net income
o Removing certain contributions to retirement savings
schemes.
o An amount of depreciation loss allowed in 2002-3 or earlier
years.
o Including – dependent children’s interest of major
shareholder attributed income
• Provision included to clarify interest free or not after leaving NZ.
Reinstates provision – return to NZ after 5 months (but less than
6 months) treated as NZ-based customer
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Other legislative changes
Scheduled to pass in March 2020, effective 1 April 2020:
• Interest no longer charged and written off – prior to 1 April 2020
• Adjusted net income threshold reduced from $1500 to $500
• Assessments/reassessments prior to 2013 only in cases of fraud
• IR able to write off fraudulent loans prior to 1 April 2020
• Repayment Holiday renamed to Temporary Repayment
Suspension to clarify suspension is temporary
• Employers notified when loan is close to paid off
• Serious illness or disability – IR can treat as “based in NZ”
• Repayment deductions allocated by payday rather than 15th
• Salary/wage deductions can be used to repay unpaid student loan
assessment amounts if loan balance fully repaid
• Overdue amounts $20 or less – can be written off
• Payments allocated against oldest unpaid period first
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From April 2020, fully administered in new system:
• Due dates for assessments/reassessments change from 60 to 30 days
after due date
• Student loan commissioner initiated recovery (SLCIR) notices
automatically issued if customer meets requirements
• Customers eligible for entitlements identified through data analytics
• myIR payment functionality expanded to include UK, SEPA, Canada &
USA
• NZ based customers can make payments 24/7 through SPK2IR
Student loans: key changes
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Improvements and new functionality:
• Account summary screen – loan balance, balances owed, making
extra payments, and interest rate
• Student loan account optimised for mobile use
• See international travel movements in myIR
• Repayment calculator in myIR
• Update “Alternative Contact Person”
• Make extra payments in myIR
• New interest status calculator – see impact of travel
• Apply to be “overseas and interest free”
• Set preference – overpayments on loan
• Apply for hardship and reduced rate on salary and wages
myIR changes
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myIR for New Zealand based student loan customers
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• New employee onboarding process – ensure correct tax
code, advise employer
• Similar types of information consolidated
• More streamlined information:
o Successful repayment deduction exemption – direct to
employer
o Employers notified if loan is close to being paid off
Reducing effort for employers
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Travel movements in myIR
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Repayment transactions in myIR –Salary/wage earner
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Assessments in myIR
Interim assessments and overseas based assessments will show on the student loan account summary page.
Under the ’I want to’ section on the summary page, customers will be able to click on ‘View assessments’ to view a break down for each period.
If the due date has passed, it will show the total amount that is due now.
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Repayment calculator in myIR
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Student loan statements
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Refreshed website content
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Time for
Q & A
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“Enter your question” section
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when the webinar ends
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Thank you for your time
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