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Govt Brings In Bill To Fix Kiwisaver Loophole

Contributor:
Fuseworks Media
Fuseworks Media

The Government has introduced a proposed law change to Parliament which it says will ensure employers meet their obligations to pay contributions to their employees' KiwiSaver accounts.

Labour Minister Trevor Mallard said it would amend the Employment Relations Act to address a situation where some employers were paying employees with KiwiSaver accounts less than those who were not in the scheme.

"In effect, the employees are taking a pay cut, which the employers are using to pay their KiwiSaver contribution," he said.

"Employers have been able to get away with this in total remuneration packages in particular, when they have insisted that the packages include employees paying the employers compulsory KiwiSaver contribution."

Mr Mallard said this happened despite the fact that the Government reimbursed employers with a $20 a week tax credit, which covered their contribution to employees earning up to $104,000 a year.

"In the worst cases, the employees end up paying their employer's contribution while the employer pockets the tax credit from the Government," he said.

"This is patently unfair and unethical."

Mr Mallard said the changes would make it unlawful for employers to offer employees different salary packages on the basis of their KiwiSaver membership.

He is fitting the law change into an existing employment relations bill, the Employment Relations (Breaks and Infant Feeding) Amendment Bill, which was last night going through its committee stage in Parliament.

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