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Mary Holm on Kiwi saver & people on disability benefits

#1 User is offline   hukildaspida 

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Posted 23 February 2009 - 12:20 PM

Mary Holm who writes for the Herald weekend money section had a couple of letters written & replies re Kiwi Saver & suggestions on 21 February 2009.

Does anyone know how Kiwi Saver works with ACC entitlements?
Do you have to consult ACC to organize Kiwi Saver or what?

http://www.nzherald.co.nz/business/news/ar...jectid=10557865
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#2 User is offline   hukildaspida 

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Posted 18 June 2010 - 04:02 PM

View Posthukildaspida, on Feb 23 2009, 12:20 PM, said:

Mary Holm who writes for the Herald weekend money section had a couple of letters written & replies re Kiwi Saver & suggestions on 21 February 2009.

Does anyone know how Kiwi Saver works with ACC entitlements?
Do you have to consult ACC to organize Kiwi Saver or what?

http://www.nzherald.co.nz/business/news/ar...jectid=10557865



Link to Mary Holms "Attack bad news with good" suggestions for people on Invalids/ Disability & Kiwisaver is now working.

Maybe if Mary Holms is reading this she can give us an updated version & answers to the above questions.
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#3 User is offline   hukildaspida 

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Posted 30 January 2013 - 04:46 PM

http://www.nzherald....jectid=10861474

KiwiSaver not just a work-based scheme
By Mary Holm
5:30 AM Saturday Jan 26, 2013

It's really misleading when people talk about a workplace savings scheme. It's more than that.


Q: I did a search on KiwiSaver and invalids beneficiaries and found you had answered one lady previously. I have a similar question.

I am 47 years old, live alone and am on the invalids benefit and disability allowance. I am told that it is very unlikely that I will ever be well enough to work again. I partly own my home ($300,000) and the remainder is owned by a family trust. I have about $1500 in savings and no debts. Life is not easy!

My question is should I join KiwiSaver? If the answer is yes, and I can get help from my brother or a friend, how much a month would they have to pay into my scheme? And when I turn 65, how much would I have, and how much would I have to reimburse my brother/friend?

It all seems too good to be true - and effectively it makes my brother have compulsory saving also, and the interest rates are favourable for him also.

I'm so pleased to have found your advice on this, as I thought (from all the advertising) that I needed an employer to contribute.

A: I agree that it's really misleading when people talk about KiwiSaver as a workplace savings scheme. It's more than that. Every New Zealander under 65 can benefit from it - including you.

Firstly, regardless of whether someone else helps you, you should sign on. That will give you the $1000 kick-start and you don't need to contribute anything. At a conservative return of 2 per cent a year after fees and tax, you would have more than $1400 at 65. In a riskier fund returning 5 per cent after fees and tax, it would be nearly $2400. That's not to be sneezed at.

But wait! As you've read, with the help of your brother or a friend - let's call him Buddy - you can do much more.

The idea is that Buddy makes a loan to you by contributing to your KiwiSaver account. Preferably, he'll put in $1044 a year - perhaps an automatic $20 a week or $87 a month, but it could be a lump sum or any other pattern of contribution between July 1 and June 30 each year. In July or August the Government then contributes 50c for every dollar from Buddy, up to a maximum of $521.

Buddy can reduce or stop his contributions at any time. But of course it's better if he keeps it up.

How much are you likely to have at 65? The KiwiSaver calculator on sorted.org.nz says about $52,000, or nearly $37,000 adjusting for inflation, if you invest in a middle-risk balanced fund. (Note the "inflation adjusted results" button at the top of the results page.)

However, that calculator assumes Buddy's contributions increase with inflation each year, whereas we're simply looking for steady contributions to maximise the tax credit. Let's just say you can be pretty confident of ending up with at least $40,000 - without adjusting for inflation.

At that point, you repay Buddy. There are two ways to work out how much:

• Use Sorted's savings calculator, with the inflation adjustment at the top switched off because in this context it just confuses things.

The calculator tells us that, if Buddy has put in $87 a month and you assume he gets a net return of 2 per cent a year, you will owe him about $21,800. If you want to give him 4 per cent - a pretty good after-tax rate - you will owe him about $26,200.

• A simpler way is to firstly subtract about $2000 to allow for the kick-start and return on it (see above). On the rest of the money, Buddy put in two-thirds ($1044 a year) and the Government put in one third ($521 a year), so give Buddy two-thirds and keep the rest.

If you have a total of $40,000 at 65, Buddy would get two-thirds of $38,000, or $25,333. His return is whatever the KiwiSaver account has earned.

The rest, of course, is yours.

We should note here that the age at which you get access to KiwiSaver, and the tax credits stop, is NZ Super age. By the time you get there it might be older than 65. But that doesn't really matter. In fact, it gives you a bit more in tax credits.

It would be best if you put your arrangement with Buddy in a letter signed by both of you. You might want to put your copy of the letter with your will.
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#4 User is offline   hukildaspida 

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Posted 17 May 2016 - 03:47 PM

Helen Twose
Personal finance and KiwiSaver columnist at the NZ Herald

KiwiSaver: ACC earners miss out on boss top-ups
5:00 AM Sunday May 15, 2016

http://www.nzherald....jectid=11639200

If you're lucky, your employer will pay a KiwiSaver contribution when you're injured, but ACC will not. Photo / Getty Images

Q: I am injured and on ACC - a miserly 24 hours a month, as I was between contracts at the time of the accident. I asked if ACC would contribute to KiwiSaver but apparently not. What other payments qualify for KiwiSaver - from Winz, for example?

A: It is absolutely possible to contribute to KiwiSaver while receiving ACC payments. But it's not obligatory, even if you were making contributions before you were injured.

If your employer is accredited or has an ACC employer reimbursement agreement and is paying your weekly compensation, ACC will not be involved in managing your KiwiSaver contributions.

If you were a member of KiwiSaver before your injury, contributions will continue at the 3, 4 or 8 per cent you've instructed your employer to deduct, unless you apply to the IRD for a contributions holiday.

Your employer may choose to continue its contribution but is not obliged to.

If you are being paid by ACC while injured and want to keep up KiwiSaver contributions, you will need to give ACC a completed KS2 KiwiSaver deduction form.

This is the same paperwork for joining KiwiSaver through your employer. ACC needs this form even if you were previously making KiwiSaver contributions out of your wages before you were injured.

As long as you meet the criteria, you can also join KiwiSaver while you're receiving ACC, in which case you'll need to fill out the forms to start KiwiSaver deductions - you are not automatically "opted in".

Continued below.

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Unfortunately, ACC doesn't pay the employer contribution and, again, your employer doesn't need to make any compulsory employer contributions.

Those are a KiwiSaver benefit available only to wage and salary earners who are actively contributing to their KiwiSaver through their pay.

Employer contributions aren't paid to anyone who is on a contributions holiday, who has taken leave without pay or is under the age of 18 or over 65, although, as with ACC payments, employers can choose to voluntarily contribute in these circumstances.

The self-employed and stay-at-home parents don't receive employer contributions, either, but are eligible for the other KiwiSaver benefits like the member tax credits and first-home withdrawal. Their contributions are made directly to the provider or through IRD.

Income-tested beneficiaries also don't get an "employer" top up. They can belong to KiwiSaver, but can't have deductions made from benefits.

Like the self-employed and non-working, beneficiaries need to join KiwiSaver through a provider and make voluntary contributions.

For those on lower incomes, consistent contributions into KiwiSaver is important if you're considering applying for the HomeStart grant to buy a first home.

This Government subsidy, worth between $3000 and $10,000 a person, only kicks in if you've made three years' worth of contributions at a minimum level - 3 per cent of your income or the minimum wage for non-earners.

- Herald on Sunday

Read more by Helen Twose Email Helen Twose

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#5 User is offline   Alan Thomas 

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Posted 17 May 2016 - 05:25 PM

If you are employed and the employer has been paying into KiwiSaver then goes without saying that those payments are part of the earnings package of which the ACC is required by law to pay earnings compensation on. So in effect the ACC is required to pay 80% of the Kiwi Saver payments to the claimant and the claimant can put those into the Kiwi Saver program as if they were employed. Nothing complicated about that.
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#6 User is offline   tommy 

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Posted 18 May 2016 - 04:36 PM

not that difficult being disciplined and creating ones own saving scheme and benefiting from the non parasitic costs that are built into kiwi saver ,just a stupid idea
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#7 User is offline   REX 

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Posted 18 May 2016 - 06:41 PM

View Posttommy, on 18 May 2016 - 04:36 PM, said:

not that difficult being disciplined and creating ones own saving scheme and benefiting from the non parasitic costs that are built into kiwi saver ,just a stupid idea


Not totally Tomthumb but I would enquire about the projected cost to savings over a 20 year period and get them to sign it in..(if possible

The employers can offer such incentives as $1 from them for every $1 you invest in your kiwisaver + government incentives on top + compounding interest = pretty hard to beat IF they don't sell you off and the money in your savings gets diddled.
Some employers are great ;)/>




You will still never be able to afford a house in Auckland :lol:/>





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#8 User is offline   tommy 

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Posted 19 May 2016 - 06:02 PM

nothing has changed as enticing dollars from supposedly impoverished indviduals as in then that what the all mighty dollar is about
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#9 User is offline   REX 

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Posted 19 May 2016 - 07:39 PM

View Posttommy, on 19 May 2016 - 06:02 PM, said:

nothing has changed as enticing dollars from supposedly impoverished indviduals as in then that what the all mighty dollar is about


It sure is, as they use that kiwisaver money of ours and lend it on an increased interest rate overseas which makes the rich richer.

The government even tries to "borrow it"...

Some of the monetary gain they make does spread to worthy friends charity and the rest goes into their limousine upgrade, then they claim 100% back off their tax of what they slide to charities,,

That goes into their petrol tank which they claim all the GST back off the outlay up keep and running cost to that for business expenses,:lol:/>
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