KiwiSaver explained

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.


Recent changes to the KiwiSaver first home withdrawals & Housing NZ Subsidy

On 1 June 2015 changes came into effect to allow a first home withdrawal to be used towards the payment of a deposit in certain circumstances. Previously, first home withdrawals could only be used towards the purchase price on settlement.


The changes included:

  • Replacing the former KiwiSaver First Home Deposit Subsidy with a KiwiSaver HomeStart Grant, doubling the support for buying a brand new home (when compared to the support available for buying an existing home).
  • Increasing house price limits for the KiwiSaver HomeStart Grant to $600,000 in Auckland, $500,000 in Wellington, Christchurch, and similarly-priced markets, and $400,000 for the rest of the country.
  • Enabling larger KiwiSaver First Home Withdrawals by eligible members by allowing them to withdraw the members' tax credit (meaning first home buyers will now be able to withdraw all of their KiwiSaver savings except for the Government $1,000 kick-start).
  • Enabling eligible members to make a KiwiSaver First Home Withdrawal for the purpose of purchasing an interest in a dwelling-house on Maori land.


Housing New Zealand has KiwiSaver Home Grant information available on its website (www.hnzc.co.nz) including a downloadable KiwiSaver Home Grant application form. Please note Housing New Zealand is currently processing more than 1,000 applications per month, which could impact on processing time frames.


For more information see the 'Introducing KiwiSaver HomeStart' article in our KiwiSaver news section:

KiwiSaver news



KiwiSaver Key Facts


Key Facts about KiwiSaver

  • Member contributions to KiwiSaver (and complying superannuation funds) by savers who meet the eligibility criteria are matched at the rate of 50 cents for each dollar contributed by a tax credit of up to $10 per week ($521.43 per year) that will be paid directly into their KiwiSaver account (or complying superannuation fund, or a combination of both).
  • After three years of saving, some savers that are first home buyers will be eligible for a KiwiSaver Home Grant to put towards the purchase of an existing home or to help with the costs of building or purchasing a new home. Eligibility for the grant is determined by the individual's income and house price caps.
  • Most new employees are automatically enrolled in KiwiSaver, but can choose to opt out.
  • Existing employees are able to opt in.



  • The contribution rates from gross salary are 3 per cent, 4 per cent or 8 per cent. The contribution rate will be 3 per cent unless a higher rate has been elected by the employee.
  • Compulsory employer contributions usually need to be made at the rate of 3% of salary or wages.
  • New Zealand residents under the age of 65 can join KiwiSaver by contracting directly with a scheme provider and making contributions. These contributions can be of any amount subject to a provider's agreement and will in many cases be eligible for the member tax credit contribution.
  • Any time after an initial 12 month contribution period an employee can apply to Inland Revenue for a contributions holiday.


If you are self employed or not employed

  • You are, in most cases, able to join KiwiSaver by contracting directly with a KiwiSaver provider.
  • Your contribution rate is agreed with the scheme provider.
  • If you meet the qualifying criteria your contributions entitle you to receive member tax credit contributions.



  • 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.


Choice of Scheme

  • Most KiwiSaver schemes allow savers to choose a particular investment product and to change their chosen investment product. Savers can select a KiwiSaver scheme and are able to change schemes at any time.
  • Savers who do not specify a KiwiSaver scheme are allocated by Inland Revenue to a conservative investment strategy fund with one of the default KiwiSaver scheme providers.
  • Savers can only be a member of one KiwiSaver scheme at any point in time.


Member tax credits (MTC); making the most of KiwiSaver

  • Many of you will be aware that the close off date for calculating your MTC payment is 30th June each year. At that date each provider calculates your contributions for the year and sends this amount off to the IRD for them make a MTC payment to your account. It is important to note that even if your contributions via PAYE were not over $1,042.86 you can top up your payments to this level by a one off lump sum or by a regular monthly payment to ensure that you receive the full MTC payment.

    We were disappointed to note that from the 2012 IRD KiwiSaver Review that many Kiwi's failed to make the most of KiwiSaver by not ensuring that their KiwiSaver contributions were at least $1,042.86 each year. The graph below shows just how many Kiwis short-changed themselves last year.

    Member tax credit payment

    Talk to us today to ensure that you make the most of KiwiSaver. Go to the Contact Us section to see how you can get in touch with us and we will be happy to help you make the most of KiwiSaver.


Australian Superannuation Transfers


Transfer your Australian Super

If you have worked in Australia and contributed to the Australian Superannuation Guarantee (“ASG”) system you will soon be able to transfer your savings to your KiwiSaver account.

The Australian and New Zealand Governments have agreed to allow transfers between ASG and KiwiSaver. Legislative changes to allow this to occur have passed in New Zealand but not yet taken effect. Legislative changes to allow this to occur have yet to be made in Australia.


What should you do now?

If you want to transfer your ASG to your KiwiSaver account you should:

  1. Get your records sorted out now. If you are not sure which ASG provider your money is invested with, contact the Australian Tax Office by completing the “Searching for lost super” Form and send it to PO Box 3578, Albury, NSW 2640.
  2. Contact us at contact@lifestages.co.nz or by phoning us on 0800 727 2265 and we will keep you informed with future updates on this issue.


No Guarantee

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.