KiwiSaver fee subsidy, mortgage diversion rules enacted

"We welcome these legislative changes, the last that are required for KiwiSaver, the landmark workplace saving scheme, to go live in July," Finance Minister Michael Cullen and Revenue Minister Peter Dunne said today. "Under the new regulations, the government will pay $40 a year into members’ accounts to subsidise the fees charged by scheme providers. "The mortgage diversion facility will allow members to divert up to half their contributions to repaying the mortgage on their home, so long as the mortgagee and the scheme provider agree. "The fee subsidy and the mortgage diversion facility are two of the many incentives designed to make it easier, more attractive and more rewarding for people to save through KiwiSaver. The scheme will help people save more quickly for their first home and enjoy a higher standard of living in retirement. "The major enhancements to KiwiSaver announced in Budget 2007 – tax credits for contributions and the compulsory employer contribution – will encourage more people to join the scheme and continue to make regular contributions. "People can be confident KiwiSaver will make a real difference to their long term financial security. KiwiSaver will build the wealth of New Zealanders and provide more kiwi capital to help grow kiwi businesses. It will be good for families and our future prosperity," said Ministers.