Sharing of KiwiSaver member information
(Clauses 81 and 100)
Summary of proposed amendments
The bill amends the KiwiSaver Act 2006 and Tax Administration Act 1994 to allow the sharing of information about a KiwiSaver member between their scheme provider and Inland Revenue. This information is limited to a member’s address, date of birth and IRD number (tax file number).
This amendment will help to ensure that both the scheme providers and Inland Revenue hold accurate contact details, allowing the communication of vital KiwiSaver information to members.
Currently, if a member updates their information they are required to advise both their scheme provider and Inland Revenue, as both send out different items of KiwiSaver correspondence. This amendment removes impediments that may occur if only one party gets updated.
The sharing of information is to be completed electronically.
Application date
The new rules will apply from the date of enactment.
Key features
- New section 220B of the KiwiSaver Act 2006 will allow Inland Revenue and a scheme provider to communicate information about a member’s name, address (including their email address), date of birth and IRD number (tax file number) to each other.
- Section 81(4) of the Tax Administration Act 1994 will be amended to provide an exception to the secrecy requirements for information disclosed by Inland Revenue to scheme providers under new section 220B of the KiwiSaver Act.
- The information must be communicated through electronic means ensuring accuracy, timeliness and adherence to e-government standards.
Background
A newly registered KiwiSaver member’s details are provided to Inland Revenue by their employer.
Under section 51(3) of the KiwiSaver Act, Inland Revenue is required to provide address details as part of the default allocation process. This is necessary because the provider has no prior direct contact with the member as the allocation is completed by Inland Revenue.
Under the default allocation process a KiwiSaver member should only be allocated to a default provider in the case of new membership or in the event of an involuntary transfer due to a scheme wind-up. At any other time Inland Revenue is unable to pass on address details, even in the event of the address being updated with Inland Revenue, because of the secrecy provisions in the Tax Administration Act 1994.
Given that the current provision to share a person’s address applies only on joining KiwiSaver, the member is required to update both Inland Revenue and their scheme provider, if their details change, as they often do, throughout their membership. Generally if a KiwiSaver member updates their address, they are likely to contact one but not both parties. For example, if a scheme provider gets an updated address from their member, they have no obligation to pass that information on to Inland Revenue. This can result in Inland Revenue holding an invalid address for the member while the scheme provider holds a valid address or vice-versa. Currently both parties have a number of invalid or unknown addresses for members, and the non-sharing of member information is one of the reasons for this.
The proposed amendments will improve the delivery to members of vital information about KiwiSaver, such as investment statements, annual reports and contribution holiday letters.
It also allows both Inland Revenue and scheme providers to proactively contact KiwiSaver members when needed and will lower the volume of returned mail for both parties.