Government Contribution (formerly known as Member Tax Credits); making the most of KiwiSaver
The Government make a contribution to your KiwiSaver account if you meet certain criteria each year up to the value of $521.43. It is an easy way to increase your savings and help your balance grow.
Government Contributions are calculated for the period 1 July - 30 June each year (relevant period) and in that period you must meet the following criteria:
- you’re 18 or over, and
- you're under the age of eligibility for NZ Super (currently 65) or have been a member for 5 years, whichever is the later, and
- you've made PAYE or voluntary contributions to your KiwiSaver account, and
- you mainly reside in New Zealand except for:
- a government employee who's serving outside New Zealand, or
- a person who's working overseas:
If you joined KiwiSaver on or after 1 July 2019, the five year minimum membership requirement does not apply.
From 1 April 2020, if you are subject to the five year minimum membership requirement, you can opt out of that requirement (although if you do that, from age 65 you won't be eligible to receive any Government contributions and your employer can stop its contributions).
What doesn't count towards the Government Contribution payment?
Employer contributions, government contributions and amounts transferred from Australia under the Trans-Tasman retirement savings portability agreement do not count toward the eligibility for the Government Contribution payment.
What if I joined partway through (or returned from living overseas during) the relevant period?
If you have been in KiwiSaver for less than 12 months (or were resident overseas whilst a member) in the relevant period you are not entitled to the full Government Contribution. If you have made contributions to your account (i.e. employee or voluntary contributions) you will receive a Government Contribution that is pro-rated based on the number of days you have been a member of KiwiSaver (and resident in New Zealand where declared).
Please note that when you make a withdrawal from your Lifestages KiwiSaver Scheme account we will ask you to complete a Statutory Declaration where you must declare any period you were living out of the country. If you lived or worked overseas and received KiwiSaver Government Contributions, we must refund that portion of the credits back to Inland Revenue from your balance.
How is it calculated?
After 1 July each year your provider calculates your voluntary contributions received directly to them in the relevant period together with how many days you were eligible to receive the Government Contributions and sends this information off to the IRD. The IRD then add to this any employee contributions via PAYE and voluntary contributions made directly to them within the relevant period. The IRD will then make a payment to your provider to apply to your account at 50c for every eligible dollar up to a maximum payment of $521.43 (if the maximum contribution of $1,042.86 was made). The payment will appear in your account in July or August.
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 payment to ensure that you receive the full Government Contribution payment. Please note that these voluntary payments must be applied to your account on or before 30 June in the relevant period to count. As the Lifestages KiwiSaver Scheme funds are priced every working day this will exclude voluntary payments you make on the weekend if the end of June falls on a weekend, as those funds will be applied effective the next price date in July.
How do I check if I have made enough contributions?
As a general rule, if you earn an annual salary or wages of $35,000 or more and your contribution rate is 3%, you will get the full Government Contribution. If you earn less than this, or you are self-employed and are not regularly contributing, you may want to consider topping up your KiwiSaver account to get the full $521.43.
To check how much you have contributed through your wages/salary this year to qualify for the full Government Contributions, login to myIR. If you have not used this service before, you will need to register. Once you are logged in, select KiwiSaver from the top menu and then 'Go To My KiwiSaver' to check your employee contributions.
If you would like to calculate how many contributions you have made directly to the Lifestages KiwiSaver Scheme within the relevant period you can contact us and we will provide you with that amount. You can also check your Lifestages KiwiSaver account yourself if you have a member login. However, remember that the employee contributions showing on your account are not the actual contributions the IRD will use in the calculation as there is a timing difference between the IRD receiving your PAYE contributions and then passing them onto us.
How do I top up my KiwiSaver account to get the full benefit?
Please note that your contributions will only be eligible if they are invested in your KiwiSaver account by 30 June each year (we encourage you to top up before 25 June to make sure your contribution is processed by the KiwiSaver year end date of 30 June).
You can make a one off payment to your Lifestages KiwiSaver Scheme account via online banking. Please download the 'Lump sum additional deposit details form' below for the information you will require. Remember to include your Lifestages KiwiSaver member number and your IRD number in the reference fields so we can identify your payment in a timely manner.
If you wish to make regular voluntary payments to your Lifestages KiwiSaver Scheme account then please complete the 'Authority to accept direct debit form' below.