KiwiSaver and Voluntary Bonding Schemes
2013 amendment to the KiwiSaver Act 2006 regarding Voluntary Bonding Scheme payments made to KiwiSaver members.
Section 4 of the KiwiSaver Act 2006
The KiwiSaver Act 2006 has been amended so that no employee deductions can be made, and no compulsory employer contributions are required, in respect of Voluntary Bonding Scheme payments made to KiwiSaver members.
Background
Voluntary Bonding Schemes are operated by the Ministry for Primary Industries, the Ministry of Health, or the Ministry of Education. The schemes provide payments to encourage recently graduated teachers, doctors, nurses, midwives and vets to apply to work in hard-to-staff specialities or locations. Voluntary Bonding Scheme payments are payable after three years and increase with the number of years worked (up to five years). They were set up in 2009, with the first payments beginning in 2012.
The after-tax amount of the Voluntary Bonding Scheme payment is put towards repayment of any remaining student loan debt. If there is no remaining student loan, the after-tax amount is paid directly to the applicant.
Key features
The amendment ensures that no employee deductions are made in respect of Voluntary Bonding Scheme payments made to KiwiSaver members. It also means that no compulsory employer contributions are required.
Application date
The amendment applies from 17 July 2013.