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Friday, May 6, 2011

Cantabrians stick to KiwiSaver

Cantabrians stick to KiwiSaver

Last updated 05:00 04/05/2011
 
Most Cantabrians are continuing to contribute to KiwiSaver despite the major earthquakes in September and February but providers report receiving more financial hardship withdrawal queries from members after the Government loosened the criteria last month.

KiwiSaver members who had been contributing for 12 months or more can take a contributions holiday of between three months and five years, but Inland Revenue statistics reveal the numbers in the past few months are at a similar level to normal.

Between November 2010 and March 2011, the department granted 6016 contribution holidays nationwide, of which 11.4 per cent (638) were from Canterbury.

If you look on a yearly basis, as at the end of April Cantabrians accounted for 11.2 per cent of the 59,149 members nationwide on contribution holidays, which compares to 11.3 per cent of the 53,133 members doing so at the end of November.

An IRD spokesperson said it was too soon to read much into the figures as contributions fluctuate throughout the year for a variety of reasons, like "seasonal work beginning or ending, so they may not be a reflection of the Canterbury earthquake".

However, KiwiSaver providers have reported increased numbers of enquiries from Canterbury members since the Government loosened up the financial hardship criteria in mid-April.

Gareth Morgan KiwiSaver customer services manager Steve Wiggins said members are considering this as an option for accessing funds during what are tough and extraordinary times and more applications are possible in future.

A spokesperson from OnePath said that while it is early days to confirm a trend, the default provider had seen "an increase in enquiries from members from Canterbury since the announcement on April 19.

"We will be monitoring this closely to see if the hardship applications we receive from the region increase as a result."

When someone opts to take a contributions holiday, their employer is not obliged to pay either.

In a separate issue, contributions paid by employees are guaranteed by the Government and paid to KiwiSaver providers regardless of whether the employer has passed them on to Inland Revenue. However, employer contributions are not guaranteed and are only forwarded to providers when paid to IRD.

The department uses standard debt collection procedures to get that money in from employers.

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