The Government is considering changing the law so Maori don't miss out on welfare benefits if they receive money distributed by iwi funds.
Te Runanga o Ngati Tahu has set up the Whai Rawa Fund where individuals' savings would be matched dollar-for-dollar up to a set limit and other depositsmade depending on the iwi's profit and equity.
Ngai Tahu raised concerns with Finance Minister Michael Cullen that individuals might miss out on social assistance because of distributions from the fund.
"I want to assure you that work is underway to ensure these will not be taken into account when assessing members' eligibility for social assistance," Dr Cullen said in a speech launching the fund.
"In line with other reforms we are also mindful that these distributions should be subject to a final withholding tax based on the marginal tax rate of a member," he said.
"The Government is now considering generic legislation to be introduced next year to cover these issues and officials will work with you on the design of the new rules."
Dr Cullen praised Ngai Tahu for its governance.
"I trust that Whai Rawa will be a further extension to the many ways in which Ngai Tahu takes care of its own and builds, slowly but surely, a better future for successive generations."
Ngai Tahu's website says the key purposes of Whai Rawa are to:
* Provide a base level of savings for all registered Ngai Tahu aged 0 to 64 in their retirement;
* Support a culture of savings and asset building;
* Maintain a "best of class" savings vehicle for Ngai Tahu whanui; and
* Encourage and assist Ngai Tahu whanui who want to increase their financial management skills.
Distributions would be made annually to adults with a Whai Rawa account.
For adults, savings would be matched dollar for dollar up to a maximum that is currently set at $100 a year.
The scheme included a children's programme where for 2006 and 2007, every dollar saved into a child's account up to a maximum of $25 during the course of a calendar year, they would receive $4 from in Matched Savings.
The matched savings ratio and maximum would be reviewed yearly.
