In this article we detail the annual KiwiSaver Government contribution of $260.72, as well as some important points regarding eligibility, how much you need to contribute, and more.
The KiwiSaver Government contributions are one of the biggest benefits of engaging in the scheme, it’s not often you can find an investment with a guaranteed return of 25 cents on the dollar. Further, the Government contributions you receive throughout your lifetime can sum to a significant portion of your final KiwiSaver balance.
If you receive the Government contribution every year from age 16 to 65, you’ll receive an extra $12,775 in total. If you didn’t use your KiwiSaver savings for a first home, and your KiwiSaver account returned on average 8% year on year until you were 65, your Government contributions and the interest generated on them would be responsible for over $130,000 of your balance!
Eligibility Criteria.
The New Zealand Government contributes towards your KiwiSaver savings annually. You can receive up to $260.72 each year from the Government into your KiwiSaver account if you satisfy the eligibility criteria. The eligibility criteria are as follows:
- You must be enrolled in KiwiSaver
- You must be over 16 years of age, but under 65 years of age
- You must contribute into your KiwiSaver account
- You must be mainly living in New Zealand
How Much Do You Have To Contribute To KiwiSaver?
You receive $0.25 on every $1.00 you personally contribute towards your KiwiSaver account each year from the Government, up to a maximum of $260.72. Therefore, the minimum contribution to make to get the maximum tax credit (Government contribution) is $1,042.86 each year. Although contributing $1,042.86 may seem like a lot, if you work full-time in a minimum wage job and contribute the lowest percentage (3.5% currently), you will maximise the Government tax credit. Similarly, if you are self-employed, you can achieve the maximum Government contribution each year by depositing $87 into your account each month, or $21 each week.
Remember, the Government contribution you receive is based on your personal contributions, so any employer matched contributions or previous Government contributions do not count towards the $1,042.86. In other words, only your employee contributions or voluntary contributions count.
When Is The KiwiSaver Government Contribution Deadline?
The KiwiSaver Government contribution year is from 1st July to 30th June. Although the last day to top up your KiwiSaver balance is 30th June, it is best to contribute several days prior to this as contributions can often take a reasonable amount of time to process. Your KiwiSaver provider, and adviser if you have one, will very likely contact you before the KiwiSaver Government contribution deadline reminding you to top up your KiwiSaver account to ensure that you maximise the amount you receive.
KiwiSaver Government Contributions After 65 Years Old.
Unfortunately, you are not eligible to receive KiwiSaver Government contributions once you are aged 65 years or older. However, at 65 you become eligible for the New Zealand Superannuation (NZ Super). For information on eligibility and how to apply, please visit the following site – https://www.workandincome.govt.nz/eligibility/seniors/superannuation/index.html
Government Contribution FAQ’s.
- Does the Government contribute to KiwiSaver?
Yes, as long as you are eligible the Government will contribute $0.25 for every $1.00 that you personally contribute towards your KiwiSaver each year, up to a maximum Government contribution of $260.72.
- What is the last day for KiwiSaver top-up?
The last day for the KiwiSaver top up is 30th June each year, however, it is best practice to contribute at least 5 business days prior to this date to ensure that your contribution reaches your KiwiSaver account prior to the deadline.
- How much do you have to contribute to KiwiSaver to get the maximum Government contribution?
To receive the maximum Government contribution of $260.72, you need to contribute $1,042.86 in the KiwiSaver year.
- What is the minimum KiwiSaver contribution for the tax credit?
The minimum KiwiSaver contribution to get any tax credit is up to you, you will receive $0.25 for every $1.00 you contribute, therefore if you can only contribute $100 in the year you will receive $25 from the Government.
Are you making the most out of KiwiSaver?
Fill out our KiwiSaver Fact Find by clicking on the link below and we’ll help you identify the best performing fund that matches your investing horizon, values, and expectations. We can also keep you updated on how you’re tracking towards achieving your Government contribution annually, among other helpful KiwiSaver tips.