Government Contributions; making the most of KiwiSaver

19 May, 2023

Government Contributions; making the most of KiwiSaver

Each year, the New Zealand Government contributes up to $521.43 to your KiwiSaver account, if you meet specific criteria. The Government contribution, also formerly called a “member tax credit”, is an initiative by the government to match your contributions (50c for every $1 you contribute), up to a maximum government contribution of $521.43.  This means you will need to have deposited at least $1,042.86 over the past year to qualify for the maximum contribution.

This is an easy way to increase your savings and help your KiwiSaver balance grow.  If you want to know if you are eligible for this contribution and how to get it, this guide is for you.


How do I get it?

Generally, 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, it’s worth considering topping up your KiwiSaver account to get the full $521.43.


Checking your contributions:

To check how much you have contributed through your wages/salary this year to qualify for the full Government Contributions, login to myIR.  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 know how much you have contributed to the Lifestages KiwiSaver Scheme directly, you can check your Lifestages KiwiSaver account through your member login.


Making Additional Contributions:

If you need to top up your KiwiSaver account, you can make a one-off payment to your Lifestages KiwiSaver Scheme account via online banking. Please download the ‘Lump sum additional deposit form’ 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 contributions to your Lifestages KiwiSaver Scheme account, then please complete the ‘Authority to accept direct debit form’.


Timing Matters

To ensure your contributions are eligible, they must be invested in your KiwiSaver account by 30 June each year.  We encourage you to top up before 25 June to make sure there is enough time for processing before the KiwiSaver year end date of 30 June.

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.


What do I have to be mindful of?

There are some eligibility requirements to get the government contributions.

  • You must be 18 or over, and
  • Have yet to reach 65*, and
  • You must have made PAYE or voluntary contributions to your KiwiSaver account, and
  • You will need to mainly reside in New Zealand **

*If you joined KiwiSaver (or a complying fund) before 1 July 2019, a five-year minimum membership requirement applies if you were aged 60 or over when you joined. During the five-year minimum membership period you are entitled to receive the Government contribution. Once you have reached the age of 65 you can opt out of this requirement, however, if you do so you will forgo your entitlement to the Government contribution. Your entitlement will be prorated from 1 July in the year that you opt out until the date you opt out.

** Except for a government employee who’s serving outside New Zealand or a person who’s working overseas as a volunteer, or for token payment, for a charitable organisation named in the Student Loan Act regulations, and the work meets one or more of the requirements set out in the Student Loans Scheme Act 2011.


How do I maximise my Government contribution?

Log in to your KiwiSaver account to confirm that your contributions are at least $1,042.86 and pay any additional amounts to top up your yearly contributions to this amount by using our form by 25th June.


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. Basically, this means only your contributions while you are in New Zealand, either deducted from your regular wages or from a lump sum, count towards your Government Contribution payment.


Partial entitlement for new members or those returning overseas.

If you have been in KiwiSaver for less than 12 months or returned from living overseas in the relevant period, you may not be entitled to the full Government Contribution.  In such cases, if you have made contributions to your account, your government contribution will be prorated based on the number of days you have been a member of KiwiSaver and a resident in New Zealand, as declared.  For example, if you contributed $1,042.84 to your KiwiSaver but only resided in New Zealand for half a year, you would receive $260.71 as your government contribution.

It's important to accurately declare any periods you lived outside the country when making withdrawals from your Lifestages KiwiSaver Scheme account.  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 KiwiSaver provider (that’s us) calculates the voluntary contributions received directly by them during the relevant period, along with the number of eligible days for government contributions. This information is then sent to the IRD. The IRD adds employee contributions via PAYE and voluntary contributions made directly to them within the relevant period. The IRD makes a payment to your provider of 50 cents for every eligible dollar, up to a maximum payment of $521.34 (based on a maximum contribution of $1,042.86). The government contribution payment usually appears in your account in July or August.