Source: Radio New Zealand
KiwiSaver contributions from employers and employees will increase. RNZ / Quin Tauetau
1 April is approaching – a day on which a host of rule changes take effect.
This year, some additional shifts can make a big difference to your bank balance, pay and retirement savings.
Here are some that you need to know about.
KiwiSaver contribution rates
From 1 April, the default contribution rate for KiwiSaver will lift from 3 percent to 3.5 percent for both employers and employees.
This will happen automatically, unless you have applied for a temporary reduction to stay at 3 percent. An ASB survey showed that 15 percent of recipients said they planned to do so.
KiwiSaver contributions for under 18s
People aged 16-17 will be paid employer contributions, as long as they are contributing themselves.
The government has made contributions to 16-17-year-old contributing KiwiSaver members since mid last year.
Unsplash – Towfiqu Barbhuiya
Benefit rates
Benefit rates will rise in line with inflation, which means a lift of 3.11 percent.
JobSeeker for a single person over 25 will increase from $361.32 to $372.55 a week, after tax.
RNZ
Sole parent support lifts from $505.80 to $521.52.
Super rates
NZ Super increases from $1076 for a single person living alone per fortnight to $1110.30, based on changes in average wages, as well as general inflation.
Minimum wage
The minimum wage rate will increase from $23.50 an hour to $23.95. The training and starting-out minimum wages rise to $19.16 per hour, 80 percent of the adult minimum wage.
In-work tax credit
From 1 April, the in-work tax credit – part of the Working for Families scheme – will increase by $50 a week for those who qualify, as part of the government’s efforts to offset the impact of fuel price rises.
ACC earners’ levy
The ACC earners’ levy will increase from 1.67 percent to 1.75 percent per $100 earned for any pay runs after 1 April.
Residential solar
A new exemption takes effect from 1 April that means power generated by rooftop solar systems and sold back into the grid is exempt from tax. This also means customers cannot claim any tax deductions from cost of that activity.
BestStart payments
Families with babies born on or after 1 April will only receive BestStart payments, if their household income is low enough to make them eligible.
These are payments designed to support families in the early years of a child’s life.
The weekly payment of $77 will be reduced, when a household earns more than $79,000.
For children born before that date, the full Best Start payment is paid until they turn 1, no matter the household income.
Low-user tariff changes
The government will still phase out the low-user power scheme, which allowed households to pay a lower daily fixed charge and higher prices per kilowatt hour for the energy used.
There have ben concerns that the scheme is not well targeted and sometimes helps higher-income earners, while large low-income families pay comparatively more.
This phase-out process started in 2021. From 1 April, the maximum low-fixed charge will be $1.80 a day, up from $1.50 last year.
The regulations will be removed entirely from next April.
Power bills
1 April is often a day that power companies increase their prices. Lines charges are lifting, which help drive some of the rise.
123RF
Tax rules for digital nomads
People visiting New Zealand while working for themselves or for a foreign employer will have a new tax exemption. They can be in the country for up to nine months, before triggering the need to consider New Zealand tax residency issues.
Deloitte tax partner Robyn Walker said that assumed they did not acquire a permanent place of abode while living here.
New options for calculating tax on employee share schemes
Unlisted companies that offer staff shares will receive new options deferring employees’ tax obligations until a later date.
This helps to avoid a situation where employees might end up with a tax liability, without the funds to pay it.
A new rule will also allow employers to pay tax on employee benefits through the fringe benefit tax regime, rather than PAYE.
Information sharing agreements
Inland Revenue will be able to share data with other government agencies under the direction of a ministerial agreement.
RNZ
Walker said information-sharing agreements were already in place, but this could make the process faster.
Shared information could be for things like determining eligibility for government assistance, the investigation of crime or removing the financial benefit of crime, she said.
Crypto-asset reporting framework
Crypto asset service providers must collect and report information about their users.
Inland Revenue said that would mean reporting on things like exchanges between fiat currencies and cryptocurrencies, exchanges between different crypto assets and transfers of relevant crypto assets.
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