With the new KiwiSaver ‘Homestart’ program set to go in a month, some providers are worried the enabling legislation may not be enacted in time for the implementation deadline.
While providers are gearing up to handle Homestart applications from April 1, the Finance and Expenditure Committee (FEC) considering the ‘Taxation (KiwiSaver HomeStart and Remedial Matters) Bill’ is due to report back on the proposed legislation by April 28, according to the NZ parliament website.
However, a spokesperson for the FEC told Investment News NZ the April 28 deadline is “the last possible date” for the select committee to report back on the Homestart bill.
“They could report back much earlier,” the spokesperson said. “The matter is still in front [of the FEC] but the hearings were completed about 10 days ago.”
Nonetheless, some KiwiSaver providers worry the tight deadline could create administrative problems if Homestart withdrawal applications roll in prior to the legislative sign-off on the bill.
However, Mike Woodbury, Chapman Tripp partner, said while the “deadline was always going to be tight” the proposed Homestart law introduces on relatively minor wording changes to the KiwiSaver Act.
“Most of the [Homestart] changes are extra-legislative and only required a change of policy from Housing New Zealand,” Woodbury said. “And if the legislation is not in place by April 1, it will be retrospective anyway.”
Homestart replaces the KiwiSaver First Home deposit subsidy, introducing higher grants (scaled according to location and property details) and allowing members to withdraw accumulated tax credits, excluding the $1,000 kick-start payment.
Nick Smith, Minister for the Environment, said in parliament last year Homestart “is going to allow 90,000 Kiwi families on modest or lower incomes… to be able to access their KiwiSaver funds and receive a Homestart grant to get into their homes”.
On its website Housing New Zealand, which will administer Homestart applications, has also clarified withdrawal terms, including defining ‘newly-built property’ as “a dwelling of any type that has received its building code compliance certificate less than six months before the date of the buyer’s application”.