KiwiSaver contributions 'mistakenly' sent back to IRD

Inland Revenue says it has identified an isolated issue with KiwiSaver and working to fix it as soon as possible. Photo / File

A man says his KiwiSaver contributions were "mistakenly" sent from his provider back to Inland Revenue and he doesn't know when the money will be back in his account.

The tax department has confirmed it is aware of the issue and is working to fix it "as soon as possible" but says it is the first time it has had the problem and it is not aware of any subsequent cases.

Nick Georgiev noticed two debits showing a refund of his $735.95 KiwiSaver contribution and his employer's $185.23 contribution on his KiwiSaver statement last month and queried his provider SuperLife.

He says they told him they received a message from the IRD to refund the money back to the tax department due to his employer making a mistake on the contributions sent in March 2015.

But when he got in touch with his company's payroll department they contacted the IRD only to find it was a system issue that the department were now trying to correct.

Georgiev said at least two other employees at his company who were with different KiwiSaver providers have had the same issue and he was concerned it was a widespread problem.

Georgiev said tax-payers were meant to be able to trust the IRD to take care of their money but when things like this happened it raised concerns.

"I am sure the money will come back into my account."

"But seeing something like that made me uncomfortable."

Meade Perrin, Inland Revenue's external relationships leader, said its KiwiSaver refunds team had become aware of the issue where there had been a delay in being able to pay the necessary amount back into members' accounts.

"This is the first time they have seen this issue and are working to fix it as soon as possible. We are not aware of any subsequent cases."

It appears the cases are isolated to one company.

Perrin said delays in paying back the contribution did not mean the money was lost.

"They still sit against the members' accounts pending their release back to the scheme provider.

"The KiwiSaver member will receive interest for the period that Inland Revenue is holding the contributions."

Perrin said IRD worked with employers when previously filed employer monthly schedules needed to be updated and re-filed.

"Most of the time employers contact Inland Revenue to make these adjustments, which can relate to one or more employees' information on that EMS.

"When an adjustment relates to the KiwiSaver contributions, Inland Revenue may need to request the full monthly deduction back from the scheme provider and replace it with the full correct amount back into the member's account."