ANZ seeking tax credit compensation for 51,000 KiwiSavers after bank discloses processing error that led to lower tax credits than savers should have received

ANZ seeking tax credit compensation for 51,000 KiwiSavers after bank discloses processing error that led to lower tax credits than savers should have received

ANZ says it's making a claim to the Inland Revenue Department over KiwiSaver member tax credits after discovering processing errors within the bank. Additionally the bank will credit affected KiwiSaver's accounts with investment returns to compensate for where they would have been if the error had not happened.

ANZ is asking for additional member tax credits to be credited to some customers' KiwiSaver accounts The bank says 51,000 customers suffered financial loss from the error, although most customers impacted have been underpaid by $50 or less. The errors date back to 2009.

"ANZ is making a claim on behalf of impacted KiwiSaver members to Inland Revenue for the additional member tax credits to be credited to those customers’ KiwiSaver accounts. In addition, ANZ will credit their KiwiSaver accounts with the investment returns that would put them in at least the same position they would have been if the error had not occurred. ANZ expects payments to be completed in August," the bank says.

"While ANZ has identified 51,000 customers who are financially impacted by the error, exact numbers and amounts won’t be known until the correction has been processed by Inland Revenue. For most of those impacted members the underpaid amounts are expected to be $50 or less."

An ANZ spokesman told the investment return compensation would cost the bank about $2 million.

The bank says it has worked on this issue with IRD, its KiwiSaver supervisor the New Zealand Guardian Trust Company, and the Financial Markets Authority. ANZ will communicate with impacted customers when their payments are completed in August. The bank says it has taken steps to ensure the circumstances leading to this error won’t be repeated.

"ANZ apologises to customers for any inconvenience." 

Eligible KiwiSaver members are currently entitled to an annual member tax credit of up to $521.43, as long as they contribute at least $1,042.86 during the year.

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If ANZ stuffed up, then it's up to them to pay the price for fixing it, not the taxpayer when it wasn't our (IRD) error.

Wasn't this about the missing tax credits, which the IRD normally pays. Not sure why the bank would have to pay this? But the story doesn't provide the full details of exactly what happened and how people ended up missing out on them. But it looks like from the story, that the bank has had to pay about 2 million for the error, which I am guessing is lost interest?

I read it as the IRD needs to pay for the missing tax credits which is on them to do, and ANZ will pay an amount that brings it to a level had it been originally invested into your account. But more info would have been good.

I guess the reason I said ANZ should pay is simple, they are a large bank that we entrust to get it right. If they can't get something as simple as, has person X deposited at least $1,042.86?, then what else have they maybe gotten wrong? I speak from experience when we had our mortgage with them a couple of years ago (no longer) we received a letter advising that they had over charged interest and so were crediting back to principal what should have been taken off previously.

I would have thought that they would have preformed some sort of a reconciliation to ensure everything matched up? They could have exported the data to excel, then done a formula* to see if people had contributed the minimum, then count the numbers and ensure it equals what there system said.

*excel: =IF(<=1042.86,1,0) then count the number of '1'

What about clients who have switched to another provider? Will they track them down as well?

I agree. What's happening here it's not very clear.

I agree, it hasn't been explained very well as to what has happened and how people may be affected.