KiwiSaver improvements help those on low incomes
KiwiSaver improvements will help those on low incomes
The Council of Trade Unions is pleased to see that one of its main recommendations to the Select Committee has been picked up in relation to amendments to the KiwiSaver Act, CTU Economist Peter Conway said today.
The ability for employer contributions to count towards the minimum 4% up until April 2010 (previously April 2008) means that unions have a good basis to discuss agreements with employers on 2+2 deals similar to the one covering 20,000 nurses and midwives agreed by the DHBNZ with the New Zealand Nurses’ Organisation.
This alternative means that workers on low incomes would not have to pay a 4% contribution until 2011. For employers of workers on less than $52,000 a year, the employer tax credit of $20 fully reimburses the employer for their contributions at 2% rather than the 1% required in April 2008 and the CTU hopes that many more employers will agree to such an arrangement, Conway said.
“The CTU would have preferred it if the Select Committee had instead provided for a permanent ability for workers to opt for a 2% minimum contribution. But our second preference was to extend the period to agree to the 2+2 type of deals.”
“While the CTU welcomes the fact that over 250,000 people have signed up for KiwiSaver, we don’t yet have figures on the income levels of those joining. The CTU has consistently argued that 4% of gross pay is too high for many workers as a minimum contribution.”
“We will continue to monitor the issues for low income workers finding it difficult to sign up to KiwiSaver and will push for further amendments in the future if necessary,” Peter Conway said.