FAQs

Matching Government contributions

If you’re aged between 18 and the date you are eligible to withdraw your 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 likely to be paid to your KiwiSaver account by the end of July.

Who can get the matching Government contributions?

To get the matching Government contributions you must:

  • be aged over 18 and not yet be eligible to take out your KiwiSaver retirement savings
  • mainly live in New Zealand, and
  • make KiwiSaver contributions - to get the maximum amount you must be a 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 for the year or $20 per week (excluding any amounts used for Mortgage Diversion).

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 a KiwiSaver member for the entire 12 months, and
  • contributed at least $1,042.86 yourself between 1 July and 30 June each year (excluding any amounts used for Mortgage Diversion).

If you have been a 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.

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.

What if I joined part-way through a matching Government contribution year?

If you joined KiwiSaver part-way through a year, 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.

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.

When are Government contributions paid to my KiwiSaver account?

The $1,000 Government contribution will be paid to KiwiSaver accounts by Inland Revenue, as soon as possible three months after Inland Revenue has received a member's first contribution. Matching Government contributions are applied annually and are claimed after 30 June each year.

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:

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).

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