Withdrawal of member tax credits for first homes
2015 amendment to KiwiSaver allows eligible members also to withdraw their Government member tax credits but the kick-start payment must remain.
Schedule 1 of the KiwiSaver Act 2006, clauses 8(4)(a) and 8(7)(a)
The Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 implements part of the Government's HomeStart support package for first home buyers, announced in August 2014.
The principal measure allows eligible KiwiSaver members who are withdrawing their funds to purchase their first home to withdraw their member tax credits as well.
An ordering rule has been included to clarify which components of a member's fund are withdrawn when a partial withdrawal is made.
Background
Under the previous rules, eligible KiwiSaver members purchasing their first home were able to withdraw the contributions they and their employers had made to their KiwiSaver funds but not member tax credits paid by the Government or the $1,000 kick-start.
The new rules allow eligible members also to withdraw their Government member tax credits.
The Government's $1,000 kick-start cannot be withdrawn, to keep the member's account open and active after the withdrawal of eligible funds.
Key features
- Clause 8(4)(a) of Schedule 1 of the KiwiSaver Act 2006 has been amended so that only the Government's kick-start payments need to remain in a member's account to ensure the account remains open.
- Clause 8(7)(a) has been amended to clarify that when funds are withdrawn they are taken first from funds contributed by the member and their employer, and second from the member tax credits.
Application date
The amendments came into force on 1 April 2015.