Matching Government Contributions
If you're aged between 18 and the date you are eligible to withdraw your end KiwiSaver retirement savings and mainly live in New Zealand, the Government will generally match your KiwiSaver contributions up to $1,042.86 per year ($20 per week). Every year you will receive this contribution paid into your KiwiSaver account.
Matching Government contributions (also called Member Tax Credits) are claimed shortly after 30 June. These are likely to be paid to your FirstChoice KiwiSaver Scheme account by the end of July.
Who can get the matching Government contributions?
To get the matching Government contributions you must:
- have been a member of a KiwiSaver scheme or complying superannuation fund at some time during the period (1 July to 30 June), and
- be aged between 18 and 65 (or the date five years after you first joined a KiwiSaver scheme or complying superannuation fund, if later), and
- mainly live in New Zealand, and
- make KiwiSaver contributions - to get the maximum amount you must be an eligible member for a full year from 1 July to 30 June and your contributions for the year need to be at least $1,042.86 (excluding any amounts used for Mortgage Diversion).
There are a few exceptions so if you would like to find out more, visit www.kiwisaver.govt.nz
How are matching Government contributions calculated?
The matching Government contribution year is from 1 July to 30 June. To receive the maximum matching Government contribution of $1,042.86 you must have:
- been an eligible KiwiSaver member for the entire 12 months, and
- contributed at least $1,042.86 yourself between 1 July and 30 June each year.
If you have been an eligible member for the full year and contribute less than $1,042.86, then you will receive an amount equal to the amount you have contributed. This excludes any amounts used for Mortgage Diversion or any contributions made by the Government or your employer. For example, if your contributions were $500 over the year and you did not use any of this amount for Mortgage Diversion, then your matching Government contribution would also be $500. If you used 50% of the $500 for Mortgage Diversion, then your matching Government contribution would be $250.
If you earn less than $52,000 and contribute 2% then your contributions will not add up to $1,042.86. Therefore you will not receive the maximum matching Government contributions, unless you make additional contributions.
How can I top-up my contributions to make sure I receive my maximum matching Government contributions?
If you have been a member of a KiwiSaver scheme and meet the eligibility criteria to receive matching Government contributions, you can choose to top-up your savings in order to receive the maximum benefits.
You can top up your savings by making either additional regular contributions or a lump sum contribution. For example, if you have been an eligible KiwiSaver member for at least 12 months, your yearly income is $25,000 and you are contributing 2% of your gross salary or wages, then your total annual KiwiSaver contributions will be $500. If you make a lump sum payment of $542.86 prior to 30 June, then you would have contributed a total of $1,042.86 for the year (1 July to 30 June) and will then be eligible to receive your maximum matching Government contribution.
See below for more examples of voluntary contributions required to receive the maximum matching Government contributions:
| If your income is | Annual KiwiSaver contributions at 2% of your gross pay | Voluntary contributions required to reach $1,042.86 | Annual KiwiSaver contributions at 4% of your gross pay | Voluntary contributions required to reach $1,042.86 |
|---|---|---|---|---|
| $5,000 | $100.00 | $942.86 | $200.00 | $842.86 |
| $10,000 | $200.00 | $842.86 | $400.00 | $642.86 |
| $15,000 | $300.00 | $742.86 | $600.00 | $442.86 |
| $20,000 | $400.00 | $642.86 | $800.00 | $242.86 |
| $25,000 | $500.00 | $542.86 | $1,000.00 | $42.86 |
| $30,000 | $600.00 | $442.86 | $1,200.00 | $0.00 |
| $35,000 | $700.00 | $342.86 | $1,400.00 | $0.00 |
| $40,000 | $800.00 | $242.86 | $1,600.00 | $0.00 |
| $45,000 | $900.00 | $142.86 | $1,800.00 | $0.00 |
| $50,000 | $1,000.00 | $42.86 | $2,000.00 | $0.00 |
| $52,000 | $1,040.00 | $2.86 | $2,080.00 | $0.00 |
| $53,000 | $1,060.00 | $0.00 | $2,120.00 | $0.00 |
How do I make additional contributions to my FirstChoice KiwiSaver Scheme?
There are three ways that you can make additional contributions direct to your FirstChoice KiwiSaver Scheme:
- Cheque
Cheques will need to be made out to “FirstChoice KiwiSaver Scheme” and sent to us with a completed Lump Sum Contribution Form. - Direct Debit
Make regular contributions by completing the FirstChoice KiwiSaver Scheme Direct Debit Form. This is available on request by contacting us. - Direct Credit
Make a direct credit to the nominee account for the FirstChoice KiwiSaver Scheme through your bank at a branch or via internet banking. The account to direct credit is
12 3113 0125735 000 - please you use your Member Number as a reference (i.e. FIRST99999).
Note: In all instances, the amount you deposit will be credited to your KiwiSaver account and allocated to your Investment Funds according to your Investment Strategy.
You can also make additional payments to the FirstChoice KiwiSaver Scheme through Inland Revenue. Please visit www.kiwisaver.govt.nz for further details.
What if I joined part-way through a matching Government contribution year (1 June – 30 July)?
If you joined KiwiSaver part-way through a year and are eligible, then at the end of the first year (30 June) you'll receive a matching Government contribution in proportion to the length of time you've been in KiwiSaver. Basically, the Government will match your contributions up to $20 per week of eligible membership.
For example, if Inland Revenue considers your start date for matching Government contributions to be 1 January, for the year to 30 June you'll receive $521.43, which is half of the maximum annual matching Government contribution, because you joined six months into the year. The date Inland Revenue considers your start date will depend on how you joined:
- If you joined through your employer – then your start date will be the earlier of the first day of the month that a contribution was first deducted from your pay or the first day of the month that your first contribution is received by Inland Revenue. This is the same whether you were automatically enrolled because you started a new job or requested your employer to join you up.
- If you joined through a KiwiSaver provider – then your start date will be the earliest of the date your KiwiSaver account was opened, the first day of the month that a contribution was first deducted from your pay, or the first day of the month that your first contribution was received (either by Inland Revenue or your KiwiSaver provider).
There are a few exceptions so if you would like to find out more visit www.kiwisaver.govt.nz.
Can I withdraw my investment?
Your savings in a KiwiSaver scheme are generally locked-in until the age of eligibility for New Zealand Superannuation (currently age 65) or for five years from the date of joining (whichever is later).
Withdrawal of KiwiSaver funds is only allowed in limited circumstances such as permanent emigration, significant financial hardship, serious illness or for a first (or second-chance) home purchase. Depending on the type of withdrawal, this may exclude the Government kick-start and matching Government contributions.
There are specific criteria for any withdrawal, requiring supporting information to be provided.
What is Mortgage Diversion?
Mortgage Diversion is a facility within KiwiSaver that enables eligible members to divert up to 50% of their own KiwiSaver contributions to help pay off their home loan. Any contributions from the employer and the Government are excluded and cannot be diverted to a home loan. Please note Mortgage Diversion is closed to new applicants.
What are the Government changes to Mortgage Diversion?
The Government announced in the May 2009 budget their decision to discontinue Mortgage Diversion for new applicants. This means Mortgage Diversion is now closed to new applicants within FirstChoice KiwiSaver.
How does the closure of Mortgage Diversion affect members who are already using it?
If you are already using Mortgage Diversion, then you may continue to do so via FirstChoice KiwiSaver for as long as your lender and FirstChoice KiwiSaver continue to offer this service.
If you were using Mortgage Diversion before June 2009 then:
- If you stop using Mortgage Diversion you cannot then start using it again in the future.
- If you change providers, you cannot continue to use Mortgage Diversion because you would be considered a new applicant.
- You can still take a contributions holiday or unpaid leave. Your Mortgage Diversion payments will continue once you start making contributions again (for as long as your KiwiSaver provider and lender continue to offer Mortgage Diversion).
What is a default KiwiSaver scheme?
Individuals who are automatically enrolled or opt into KiwiSaver and do not select a scheme (and whose employer has not chosen a scheme) will be allocated to one of six default schemes by Inland Revenue.
Where can I find more information about KiwiSaver?
You can find more information at:
- www.kiwisaver.govt.nz (for information about KiwiSaver)
- www.sorted.org.nz (for information about saving and investing)
- www.hnzc.govt.nz (for information on the first home buyers deposit subsidy)
Disclaimer
A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme ("FirstChoice KiwiSaver") is available here or by calling 0800 1ST CHOICE (0800 178 246).
