2019 was an eventful year for KiwiSaver with several changes introduced. This year, there are more changes.
Changes to lock-in for members who joined after age 60
At the moment, if you joined KiwiSaver before 1 July 2019 and you were 60 or over at the time, you are subject to a five-year lock-in period, which means you can only apply to withdraw your money after you have been a KiwiSaver member for five years. However, from 1 April 2020 you will be able to opt out of the five-year minimum lock-in period, and apply to make a retirement withdrawal, once you have reached the age of 65. It’s important to note though, if you do opt out, you will no longer be entitled to further government contributions or employer contributions.
Accessing KiwiSaver due to a life-shortening congenital condition
It’s expected that from 1 April 2020, if you were born with a life-shortening congenital condition, you will be able to apply to withdraw your KiwiSaver funds before the age of 65. However, if you do make a withdrawal, you will no longer be entitled to further government contributions or employer contributions. The legislation allowing this is yet to be enacted but is expected to be passed by 1 April 2020.
There will be a list of life-shortening congenital conditions. If you were born with one of these conditions you will be able to apply for a withdrawal. If your condition is not listed you may still be able to apply if your medical practitioner certifies that the condition is expected to reduce life expectancy below age 65.
Other changes in the pipeline, in the legislation expected to be passed by 1 April, include:
- From the 2020/2021 tax year, if your PIR (the rate at which your returns in the Aon KiwiSaver Scheme are taxed) has been higher than the correct tax rate you will get a refund of the overpaid tax.
- Inland Revenue will be able to instruct a KiwiSaver provider to change your PIR when they believe you are on the wrong rate. Inland Revenue will notify you of this change.
If you’d like to know more these changes, and how they may affect you, get in touch with us.