IRD sending ONE MILLION letters to Kiwis on wrong KiwiSaver tax rate
The tax department began sending out letters to people who had not paid enough tax on their KiwiSaver investments in May prompting an outcry from people worried about getting an unexpected tax bill. In June, the IRD revealed 450,000 people had been paying the wrong tax rate on KiwiSaver and other PIE (portfolio investment entity) investment schemes. But weeks later it updated the figure to 1.5 million people with 950,000 estimated to have overpaid tax of around $42 million and 550,000 underpaying tax of between $45m to $50m in the last tax year. People who have underpaid tax will get a bill telling them how much they need to pay but those who have overpaid won't get a refund. From July, over-payers have been sent letters urging them to change their rates.
An IRD spokeswoman said it had so far sent out just over 930,000 letters to customers who are on the wrong PIR rate for KiwiSaver. "We are sending the letters in batches so not everyone who is due a letter has received one so far." But it expected the mail-out to be complete in November and for there to be more than a million letters in total. "We do not have a definitive final number at this time." Auckland financial adviser Rachelle Bland said she knew two individuals who had now received letters from the IRD advising that they were paying too much tax.
One is on the top 28 per cent tax rate and has been told she should only be paying 10.5 per cent. The woman was told: "Your investment with KiwiSaver scheme [scheme name removed] is being taxed at 28 per cent. We've calculated your rate based on the income details we hold for you and the table below, and suggest for the 2020 tax year you change it to 10.5 per cent. A tax rate of 10.5 per cent is for people who earn $14k or less in taxable income. The letter also stated: "It is important that the rate your KiwiSaver scheme is taxed at is correct. If the rate is too low, you may have a tax bill at the end of the year. If the rate is too high you are unable to claim a refund."
The second is also on the top tax rate but should be on 17.5 per cent because she earns between $14,001 and $48k in taxable income. Both were told to contact their KiwiSaver providers directly to change the rate. But Bland said many of those receiving the letters may not be aware who their KiwiSaver provider is or how to get in contact with them. "I would like to think it will be acted on but I think it is going to take a massive education campaign."
Some people may have been on the wrong tax rate since joining KiwiSaver potentially costing them hundreds of dollars in overpaid tax and lost returns. Bland was part of a group of financial advisers which warned the government about the over-taxation of KiwiSaver more than a year ago. Inland Revenue has said it only became able to identify which KiwiSaver members were underpaying or over-paying tax since switching to a new IT system in April. Bland believes part of the problem lies with auto-enrolment forms which sign people up to KiwiSaver but do not allow them to specify which prescribed investor rate they need to be on. People are automatically put on the highest rate of 28 per cent and then must tell their provider to change it. But Bland said by the time the money got to the provider - three months later - many were not aware they needed to change the rate or had forgotten about it. She is running a parliamentary petition to get the IRD to change its forms so people have to specify what prescribed investor rate they should be on from the start and has written to the IRD and its minister Stuart Nash. In a response from Tony Donoghue, manager of the commissioner's correspondence at the IRD, said the KiwiSaver forms were designed to transfer an employee's contributions to an investment company and the requirements should not be confused with the tax rules which applied to PIEs. "The PIE rules require investors to choose a PIR at the time they invest, so the entity pays the correct amount of tax on investment earnings. This obligation is set out in product disclosure statements issued to investors when they join a scheme.
"Regardless of how people join, every investor receives a product disclosure statement, which provides information on what taxes the investor is required to pay." All PIE providers are legally required to check investors are on the right rate every year. KiwiSaver providers send out annual letters to get people to switch change rates but say they don't have much of a response. Donoghue said officials were considering what legislative changes could be made to improve the PIE regime. "This could include authority for Inland Revenue to automatically notify investment entities when investors have not declared an appropriate PIR." However changes would require parliamentary approval, he added.
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Poll: 🤖 What skills do you think give a CV the ultimate edge in a robot-filled workplace?
The Reserve Bank has shared some pretty blunt advice: there’s no such thing as a “safe” job anymore 🛟😑
Robots are stepping into repetitive roles in factories, plants and warehouses. AI is taking care of the admin tasks that once filled many mid-level office jobs.
We want to know: As the world evolves, what skills do you think give a CV the ultimate edge in a robot-filled workplace?
Want to read more? The Press has you covered!
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52.2% Human-centred experience and communication
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15% Critical thinking
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29.9% Resilience and adaptability
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2.9% Other - I will share below!
The Gospel’s Relevance Today**
The Gospel, meaning ‘good news’, is the cornerstone of the message contained in the Bible’s first four books—Matthew, Mark, Luke, and John. While these records were written approximately 2,000 years ago, a natural question arises: why is this Gospel still relevant and vital for us today? This analysis seeks to explore what the Bible itself defines as the Gospel and to understand its enduring significance.
**Defining the Gospel: Core Biblical References**
The Gospel is not a vague concept; Scripture provides clear descriptions of its content and focus.
* **The Gospel of the Kingdom:** In Matthew 4:23, as Jesus begins his ministry, he is described as “preaching the gospel of the kingdom.” This immediately establishes that the good news is centrally about a kingdom—the Kingdom of God. His accompanying miracles served to validate the authority of this message.
* **The Gospel of Jesus Christ:** Mark 1:1 opens with, “The beginning of the gospel of Jesus Christ, the Son of God.” Here, “Christ” is a title meaning ‘anointed one’. Thus, the good news is intrinsically about Jesus: his identity as the Anointed One and his unique status as the Son of God.
* **The Gospel of God’s Grace:** In Acts 20:24, the Apostle Paul speaks of his mission to “testify the gospel of the grace of God.” Grace signifies an undeserved gift. This reveals that the Gospel involves a gift from God, offered not because it is merited, but out of His benevolence.
* **The Gospel of Salvation and Peace:** Romans 1:16 declares the Gospel is “the power of God to salvation for everyone who believes,” breaking down barriers between Jew and Gentile (Greek). Furthermore, Romans 10:15 calls it the “gospel of peace,” pointing to a future state of peace brought about by this message.
* **The Gospel Summarised:** 1 Corinthians 15:1-4 provides a foundational summary. Paul reminds believers of the gospel he preached, “by which also you are saved.” He then states its core historical facts: “that Christ died for our sins according to the Scriptures, and that He was buried, and that He rose again the third day according to the Scriptures.” The Gospel is therefore rooted in the sacrificial death and resurrection of Jesus.
In synthesis, the Gospel is the good news of **salvation and future peace in the Kingdom of God**, made possible by **the grace of God** and **the obedient sacrifice of His Son, Jesus Christ**, and offered to all who believe.
**Old Testament Foundations: The Gospel Preached to Abraham**
A crucial question is whether the Gospel is confined to the New Testament. Scripture shows its foundations were laid much earlier. Galatians 3:8 states explicitly that “the Scripture, foreseeing that God would justify the Gentiles by faith, preached the gospel to Abraham beforehand, saying, ‘In you all the nations shall be blessed.’”
This reference points back to Genesis 12:1-3, where God made profound promises to Abraham: to make him a great nation, to bless those who blessed him, and that “in you all the families of the earth shall be blessed.” These promises—later reaffirmed to Isaac and Jacob—form the bedrock of the Gospel hope. The good news of salvation through Christ is the fulfillment of how **all nations** would be blessed through Abraham’s “seed.”
**The Gospel’s Personal Relevance: Good News for You Today**
How does this ancient message become “good news for you” today? The application is clearly outlined in Galatians 3.
* **Access through Faith in Christ:** Galatians 3:26 declares, “For you are all sons of God through faith in Christ Jesus.” The promise made to Abraham is now extended to anyone with faith in Jesus.
* **The Role of Baptism:** Verse 27 explains, “For as many of you as were baptized into Christ have put on Christ.” Baptism is the God-appointed act of faith that identifies a believer with Christ’s death and resurrection.
* **Unity and Inheritance:** Verses 28-29 reveal the glorious outcome: “There is neither Jew nor Greek, there is neither slave nor free, there is neither male nor female; for you are all one in Christ Jesus. And if you are Christ’s, then you are Abraham’s seed, and heirs according to the promise.” Through the Gospel, all barriers are removed; believers become spiritual descendants of Abraham and heirs to the promises of the Kingdom.
This Gospel was once a mystery hidden in God’s purpose (Ephesians 3:3-9). Now, it has been revealed: the unsearchable riches of Christ, offering salvation to all who heed the call, believe the message, and are baptised into him.
**Conclusion: An Enduring and Open Invitation**
The Gospel is far more than a historical account; it is the living, powerful good news of God’s plan for salvation. It is rooted in promises to Abraham, accomplished through the death and resurrection of Jesus Christ, and open to all people without distinction. It offers a tangible hope—the hope of resurrection, peace, and an inheritance in the coming Kingdom of God. This is why the Gospel remains profoundly relevant. It is an invitation to listen, believe, and stand firm in this hope, linking our lives today to the eternal purpose of God.
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