Budget 19th May 2011
We will continually update this site as we obtain more information and clarification of the recent Budget
The Budget announced moderate changes to Kiwi Saver, Working for Families and Student Loans. A large fund has been set up for the recovery and rebuild of Canterbury.
The key changes to Kiwi Saver include:
The minimum contribution will increase from 2% to 3% from 1st April 2013
Quick ways to calculate what this means to you:
- Multiply what you currently pay by 1.5 or
- Add 50% to what you currently pay or
- Half what you currently pay and add this together to obtain the new amount
Minimum contribution to increase from 2% to 3% from 1st April 2013
Employer contribution to be taxed from 1st April 2012 – this was a surprise announcement
This will be halved to $520 per annum from 1st July 2011
Working for Families
Working for Families has remained essentially the same with small adjustments being made to the level of income that can be earned and the entitlement rate.
Currently allowance reduces when you earn $36, 827 or over, this amount will reduce to $35,000 from 1st April 2012
For ever dollar earned over the threshold you will lose 25c from 1st April 2012. This has increased from 20c.
The Government has reduced the cost of student loans by tightening the criteria for eligibility. For people aged 55 or over lending will be limited to the tuition fees. Restrictions also for those with overdue payments of $500 or more.
Other aspects under review
The government is looking at options for fairer rules covering livestock valuation elections and transferring between the schemes.
If legislation is passed as introduced it will allow couples with children under the age of 18 to combine earning for income tax purposes
Mixed use of assets for private and business use
A review of the rules to make them fairer where assets are both used for personal use and also generate an income eg – a holiday home can both be rented out and used privately.
Fringe Benefit Tax
Questioning whether the definition of Family Income for Working for Families tax credit should be widened to include fringe benefits provided to employees.
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