KiwiSaver is a great tool, whether as a home deposit, a retirement fund, or both. But whatever your KiwiSaver goals, we can all agree that the bigger your balance the better. And aside from comparing providers and making sure your fund is the right fund for you, one of the best ways to grow your fund is with free handouts.
After all, who doesn’t want free cash?
Each year, you’re entitled to free KiwiSaver government contributions, to help grow your KiwiSaver balance and get you on track to your saving goals. So just how much can you get, and how do you go about getting it?
Canstar runs through everything there is to know.
KiwiSaver government contributions: how does it work?
The KiwiSaver government contribution is designed to help you save for your retirement. Here’s how it works:
If you’re eligible, the government will contribute 50 cents for every dollar you contribute to your KiwiSaver account, up to a maximum contribution of $521.43 each year.
The government contribution is calculated based on your contributions between 1 July to 30 June each year, and is paid directly into your KiwiSaver account.
How can I get the maximum contribution?
The government contribute 50c for every $1 you contribute (up to the maximum $521.43). So, you must contribute at least $1042.86 of your own money between 1 July to 30 June each year to earn the maximum contribution.
Employer contributions, past government contributions and funds moved from Australian retirement schemes do not count towards the $1042.86.
You can contribute through:
- Salary and wage deductions
- Payments to Inland Revenue
- Payments to your scheme provider
For most full-time workers, you should be able to reach the required $1042.86 through your regular salary contributions. But you can make a voluntary additional contribution to reach $1042.86, as long as it is made by 30 June each year – remember to allow for processing time.
It’s also important to remember that even if you’re unable to contribute the required amount to earn the full government contribution, you can still earn part of it. For example, if you contributed $800, you would still be entitled to a $400 government contribution.
While ideally you should look to make the most of the free money, and gain the full contribution, getting as much as you can is better than nothing.
Who is eligible?
You’re generally eligible for the government contribution if you:
- Are aged 18 to 64 (or older if you’re not eligible for a retirement withdrawal)
- Contribute to your KiwiSaver account, and
- Live mainly in New Zealand.
Don’t worry if you’re only eligible for part of the year, you’ll still get part of the government contribution. The calculation of the amount will be based on the number of days in the year you were eligible.
When will the contribution be paid?
Your contributions will not arrive in your account the next day. It may take up to a month for any contribution to show up in your account, and it may do so over several instalments/payments.
Not sure how much money you put in already?
If you’re not sure how much you’ve contributed during the financial year, and whether you’ll get the full government contribution, simply check your payslip. You’ll be able to see how much you are contributing each paycheck and work out if it’s enough.
You can also check directly with your KiwiSaver provider, through their website, or by logging into MyIR.
→Related article: Keeping Track of Your KiwiSaver Balance & Contributions
What if I don’t know who my KiwiSaver provider is?
If you set up your KiwiSaver a while back, you may not even remember your provider or scheme. But finding out is simple. You can call 0800 KIWISAVER or, login to myIR. There, you’ll be able to see your KiwiSaver account, including your provider.
Compare KiwiSaver Providers with Canstar
If you’re comparing superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for a KiwiSaver member with a balance of $50,000 in an Aggressive fund, sorted by Star Rating (highest to lowest), followed by company name (alphabetical) – some products may have links to providers’ websites. Use Canstar’s KiwiSaver comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.
To read more about our latest KiwiSaver Awards or to compare KiwiSaver providers, click on the button below.
About the author of this page
This report was written by Canstar Content Producer, Andrew Broadley. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.
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