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KiwiSaver Contributions Holiday

Summary
  • All applications for a contributions holiday must be made to the IRD using a KS6 Contributions Holiday request form. An employee cannot ask their employer for a contributions holiday. Section 102
  • You can download a KS6.
  • A contributions holiday can be applied for at any time after having been in the scheme for a year. Section 102(b)
  • A contributions holiday can be applied for in the first year in cases of financial hardship. Section 102(a)
  • A contributions holiday is applied for by the employee by completing and sending to the IRD a KS6 form. This form can be downloaded from our website.
  • If the IRD grants a contributions holiday, the IRD advises the employer to stop making KiwiSaver deductions. Section 105(1)(b)
  • The IRD will advise the employer when a contributions holiday ends. Section 110
  • Whilst on a contributions holiday, an employee can resume, and then stop, their contributions by giving notice to their employer. Section 112
How To Access
  • All KiwiSaver related employee maintenance is performed from the F3 Employee Maintenance screen.
  • Note the KiwiSaver tab.
  • Also remember this screen can be accessed whilst calculating pays, thus allowing changes to be made "on the fly".
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  • To allow an employee a contributions holiday, simply click the current value as circled.
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  • The following screen is shown
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From the above screen note the following

On KiwiSaver Holiday

  • The KiwiSaver Holiday can be until further notice, or until a date specified by the IRD.
  • If a date is specified, employee contributions automatically resume after that date.
  • A contributions holiday is manually ended by changing the tick to a cross.

Employer Contributions

  • Compulsory employer contributions are not required whilst an employee is on a contributions holiday.
  • An employer can choose to continue contributing if they want.

IRD Payroll News issue 108 July 2008

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Contributions holidays

From July 2008 some KiwiSaver members will have been contributing to KiwiSaver for a year, so they can start to take contributions holidays. This is a break in contributions of between three months and five years.

Members apply for a contributions holiday by contacting Inland Revenue either through the KiwiSaver website, by calling us on 0800 549 472 or by sending us a Contributions holiday request (KS6) form - go to the KiwiSaver website. If they identify you as an employer we will send you a letter asking you to stop KiwiSaver deductions. We will also send a confirmation letter to the member. You should not stop KiwiSaver deductions until you either receive a letter from us or your employee shows you a contributions holiday confirmation letter from us.

Remember, if an employee is not having contributions deducted from their salary or wages while they're on a contributions holiday, compulsory employer contributions are not required.

The contributions holiday is very flexible so employees can ask you to restart contributions while they are still on a contributions holiday, the contributions holiday can be ended early or renewed, and if the member has several employers they can ask that it be applied to some employers but not others. When a contributions holiday expires we will send you a letter asking you to recommence KiwiSaver deductions for that employee.

Section 102 KiwiSaver Act 2006
Who may apply for contributions holiday

A person to whom subpart 1 (deductions of contributions from salary or wages) applies may apply to the Commissioner for a contributions holiday

(a) at any time after the Commissioner receives the first contribution in respect of that person, if the person is suffering, or likely to suffer, financial hardship; or

(b) at any time after 12 months have expired since the earlier of

(i) the date that the Commissioner received the first contribution in respect of that person; or

(ii) the date that a provider received the first contribution in respect of that person's membership of a KiwiSaver scheme.

Section 103 KiwiSaver Act 2006
How to apply for contributions holiday

(1) An application for a contributions holiday may be made by any means that the Commissioner accepts.

(2) The application must tell the Commissioner

(a) the person's name and address; and

(b) the person's tax file number; and

(c) the name and address of each of the person's employers to whom the person intends that the holiday will apply; and

(d) the period of time for which the holiday is required; and

(e) in the case of an application made under section 102(a), details of the financial hardship; and

(f) any other information that the Commissioner requires.

Section 104 KiwiSaver Act 2006
Granting of contributions holiday

(1) The Commissioner must accept an application for a contributions holiday, and grant a contributions holiday, if the Commissioner is satisfied that the person meets the requirements of section 102, and the application is made in accordance with section 103.

(2) A contributions holiday granted in respect of an application made under section 102(a) must be granted for a period of 3 months, unless the Commissioner agrees to a longer period.

(3) A contributions holiday granted in respect of an application made under section 102(b) must be granted for

(a) a minimum period of 3 months; and

(b) a maximum period of whichever is the shorter of

(i) 5 years; or

(ii) the period specified in the application.

Section 105 KiwiSaver Act 2006
Commissioner must give notice of grant of contributions holiday

(1) The Commissioner must, as soon as practicable after granting a contributions holiday, give notice

(a) to the person who applied for the holiday

(i) that the holiday has been granted; and

(ii) of the date on which the holiday will end; and

(b) to each relevant employer

(i) that a contributions holiday has been granted in respect of the person; and

(ii) that the employer must stop making deductions of contributions from the salary or wages of the person; and

(c) to the provider of the person's KiwiSaver scheme

(i) that a contributions holiday has been granted in respect of the person; and

(ii) of the names of the relevant employers; and

(iii) that deductions of contributions may not be made from the salary or wages paid to the person by the relevant employers during the period of the holiday.

(2) In this section, relevant employer means each employer to whom the person stated, in the application for the contributions holiday, that the contributions holiday was intended to apply.

Section 106 KiwiSaver Act 2006
When deductions stop at start of contributions holiday

If an employer is notified under section 105, subpart 1 ceases to apply

(a) to the employer in respect of the person who applied for the contributions holiday; and

(b) with effect on the next payment of salary or wages that the employer calculates after the date on which the employer receives the notice.

Section 107 KiwiSaver Act 2006
Employers to whom contributions holiday applies

A contributions holiday granted under this subpart, while it is in force,

(a) has effect, subject to section 108, in respect of each employer to whom the person stated, in the application for the contributions holiday, that the contributions holiday was intended to apply; and

(b) may be used, if the person chooses, in respect of any other employer.

Section 108 KiwiSaver Act 2006
Contributions holidays have 3-month minimum life

(1) The purpose of this section is to prevent employees requesting employers to stop and start deductions of contributions too often.

(2) No contributions holiday may be used in respect of an employer for less than 3 months unless the employer agrees

Section 109 KiwiSaver Act 2006
Commissioner must give notice before contributions holiday ends

The Commissioner must give notice to a person who is on a contributions holiday before the holiday ends.

Section 110 KiwiSaver Act 2006
Commissioner must give notice to employer of end of contributions holiday

The Commissioner must give notice to each affected employer known to the Commissioner, as soon as practicable after the end of a contributions holiday,

(a) of the date on which the contributions holiday ended; and

(b) that the employer must start making deductions of contributions from the salary or wages of the person.

Section 111 KiwiSaver Act 2006
When deductions start at end of contributions holiday

(1) If an employer is notified under section 110 about the end of a person's contributions holiday, or under section 112 about the revocation of a person's contributions holiday, subpart 1 applies

(a) to the employer in respect of that person; and

(b) with effect on the next payment of salary or wages that the employer calculates after the date on which the employer receives the notice.

(2) This section is subject to any new contributions holiday that is granted under this subpart.

Section 112 KiwiSaver Act 2006
Revocation and reinstatement of contributions holiday

(1) Subject to section 108, a person may at any time revoke his or her contributions holiday in respect of an employer by giving notice to the employer requiring the employer to start making deductions from salary or wages under subpart 1.

(2) A person may at any time reinstate his or her contributions holiday in respect of an employer by giving notice to the employer requiring the employer to stop making deductions from salary or wages under subpart 1.

(3) Sections 106 and 108 apply, with necessary modifications, as if the reinstatement of a contributions holiday were the granting of a contributions holiday.

Section 113 KiwiSaver Act 2006
Refund of initial contributions

(1) A person may apply to the Commissioner for a refund of any contributions that are being held in the holding account under section 75 if the person is suffering, or likely to suffer, significant financial hardship or is suffering serious illness.

(2) In this section, significant financial hardship has the same meaning as in clause 11 of the KiwiSaver rules and serious illness has the same meaning as in clause 12 of those rules.

(3) The application may be made by any means that the Commissioner accepts.

(4) The application must tell the Commissioner

(a) the person's name and address; and

(b) the person's tax file number; and

(c) details of the significant financial hardship or serious illness; and

(d) any other information that the Commissioner requires.

(5) The Commissioner must refund the contributions to which the application relates if the Commissioner is satisfied that the person and the application meet the requirements of this section.

(6) However, the Commissioner must not refund under this section any employer contributions that were made under section 93.

(7) The Commissioner must give notice of the refund to the provider of the relevant KiwiSaver scheme (if any).

Section 114 KiwiSaver Act 2006
Refunds if employee loses etc contributions holiday notice

(1) This section applies if

(a) an employee has a contributions holiday that has not yet ended; and

(b) the employee starts new employment, but cannot comply with section 22(1)(c)(ii).

(2) The employer may, at any time after the employee complies with section 22(1)(c)(ii), refund to the employee any contributions that were deducted from the employee's salary or wages before the employee complied.

(3) The Commissioner may refund that money to the employee if the money is held by the Commissioner.

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KiwiSaver Forms

image KS1 Employee Details
An employer uses this form to notify Inland Revenue about
  • a new employee being enrolled automatically.
  • an existing employee opting in.
image KS2 KiwiSaver Deductions
An employee uses this form to provide details to an employer if they are
  • starting new employment.
  • an existing employee opting in.
  • a member contribution rate change.
image KS3 Employee Information
An introductory guide for an employee about the KiwiSaver scheme.
KS4 KiwiSaver Employer Guide
A 36 page overview of your KiwiSaver responsibilities as an employer.
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KS6 Contributions Holiday
An employee uses this form to request a contributions holiday.
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image KS10 New Employee Opt Out
An employee uses this form if they have been automatically enrolled and don't want to be a member of KiwiSaver.