FAQs

Member Tax Credit

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 contribute to your KiwiSaver account $0.50c for every $1.00 you contribute up to $521.43 per year ($10 per week). Every year you will receive this contribution paid into your KiwiSaver account.

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.

The Government’s member tax credit rate is $0.50c for every $1.00 you contribute up to a maximum of $521.43 per annum (subject to eligibility) for the KiwiSaver year 1 July to 30 June.

Who can get the member tax credit?

To get the member tax credit 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 is the member tax credit calculated?

The member tax credit year is from 1 July to 30 June. To receive the maximum member tax credit of $521.43 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 of 50c for every $1.00 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 member tax credit would be $250. If you used 50% of the $500 for Mortgage Diversion, then your member tax credit would be $125.

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 member tax credit, unless you make additional contributions.

How can I top-up my contributions to make sure I receive my maximum member tax credit?

If you have been a member of a KiwiSaver scheme and meet the eligibility criteria to receive the member tax credit, 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 member tax credit.

The Government announced in the 2011 Budget that the minimum employee contribution rate and the default contribution rate will increase from 2% to 3% of gross salary or wages with effect from 1 April 2013.

See below for more examples of voluntary contributions required to receive the maximum member tax credit:

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:

  1. Cheque
    Cheques will need to be made out to "FirstChoice KiwiSaver Scheme" and sent to us with a completed Lump Sum Contribution Form.
  2. Direct Debit
    Make regular contributions by completing the FirstChoice KiwiSaver Scheme Direct Debit Form.

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 member tax credit 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 member tax credit in proportion to the length of time you've been in KiwiSaver. Basically, the Government will contribute $0.50c for every $1.00 you contribute up to $10 per week of eligible membership.

For example, if Inland Revenue considers your start date for the member tax credit to be 1 January, for the year to 30 June you'll receive $260.71, which is half of the maximum annual member tax credit, 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 member tax credits.

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.

The Government closed the Mortgage Diversion facility to new applicants from 1 June 2009.

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 for as long as your KiwiSaver and mortgage provider continue to offer this service.

If you are already using Mortgage Diversion then:

  • If you transfer out of the FirstChoice KiwiSaver Scheme to another KiwiSaver provider, you cannot continue to use Mortgage Diversion because you will have to complete a new application with your new KiwiSaver provider and under the KiwiSaver Regulations this would be considered a new application for the Mortgage Diversion facility.
  • If you change your mortgage provider, refinance or restructure the ownership of your lending with your existing mortgage provider, you cannot continue to use Mortgage Diversion. This is because you will have to complete a new application to include your new or updated lending details, which under the KiwiSaver Regulations is considered a new application for the Mortgage Diversion facility.
  • You can still take a contributions holiday or unpaid leave and this will not affect your Mortgage Diversion payments. Your Mortgage Diversion payments will continue again once you start making contributions (for as long as your KiwiSaver and mortgage providers 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:

Disclaimer

The FirstChoice KiwiSaver Scheme is provided by ASB Group Investments Limited.

The information contained in this website is for general informational purposes and is designed for use by New Zealand Residents only. None of the Crown, the Trustee, the Manager, ASB Bank Limited and its subsidiaries (the Banking Group), the Commonwealth Bank of Australia, or any other company in the Commonwealth Bank of Australia Group, or any of their Board members or directors (as the case may be), nor any other person or party, guarantees the securities offered in this website or the performance of those securities (including any of the investments or returns made in respect of the securities).

A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme is available here or by calling 0800 1ST CHOICE (0800 178 246).

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