KiwiSaver is a national initiative that commenced on 1 July 2007 to promote long term retirement savings. It is not intended to supersede existing superannuation arrangements, but to provide a vehicle for employees to be able to save by way of direct deduction from their salary or wages. It is also open to most people who aren't employed. KiwiSaver schemes are managed independently of the Government by investment providers such as FANZ.
The KiwiSaver legislation applies to most employees who are New Zealand citizens, or entitled to be in New Zealand indefinitely under the Immigration Act 1987. If an employer pays employees based in New Zealand through the PAYE system, they must usually enrol those who start a new job in KiwiSaver and will have to make deductions from their gross salary and wages and pay these to the IRD, beginning on their first pay run. An employee who is enrolled but does not want to be a KiwiSaver member can opt out in a set period after starting the new job. A person who wishes to join KiwiSaver but doesn't start a new job can also join.
If you are employed it’s easy to save directly through your pay. You choose to contribute 3%, 4% or 8% of your before-tax pay. If you're eligible, your employer will usually also make contributions. These will be equal to 3% of your before-tax salary or wages. Your employer can contribute more than this if you have negotiated this directly with them.
Your employer’s contributions have tax taken out before they're added to your KiwiSaver account.
Once you’ve joined KiwiSaver, you could qualify for the government’s Member Tax Credits. They’ll add 50 cents for every dollar you save, up to a maximum of $521.43 a year if you're eligible.
Click here for further information on how MTC payments are calculated.
If you’re buying your first home or land to build your first home (or you’re in the same financial position as someone who is buying a first home), you may be able to withdraw most of your KiwiSaver savings to help pay for it after you have been contributing to your KiwiSaver for three years.
If you’ve been making regular contributions to a KiwiSaver scheme for at least three years, you can also apply for the KiwiSaver HomeStart grant through Housing New Zealand.
You could be eligible for a $1,000 grant for each year you’ve contributed to KiwiSaver, up to a maximum of $5,000.
The grant doubles, to $2,000 per year (after three years of contributing) up to a maximum of $10,000 (after five years of contributing).
Each of you could qualify for a grant, up to a maximum total of $20,000 towards your first home.
KiwiSaver HomeStart grants are paid by the government and administered by Housing New Zealand. There are various criteria around who is eligible, including minimum contribution levels and regional purchase price caps.
Find out more at www.hnzc.co.nz or by calling Housing New Zealand on 0508 935 266.
If you have worked in Australia and contributed to the Australian Superannuation Guarantee (“ASG”) system you will be able to transfer your savings to your KiwiSaver account.
Click here for further information if you would like to transfer your ASG to your Lifestages KiwiSaver account.
A member’s investment in a KiwiSaver scheme and any returns are not guaranteed or secured in any way by the Crown. Investments are subject to investment risk, including possible delays in repayment and the loss of some or all of the amount invested.
Contributions are generally locked in until the age of eligibility for New Zealand Superannuation (currently 65 years of age) or five years of KiwiSaver or complying superannuation fund membership, whichever is the later.
Exceptions can be made for some funds to be withdrawn for the purchase of a first home, significant financial hardship, serious illness and permanent emigration.
FANZ offer the Lifestages KiwiSaver Scheme