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Key Features Of KiwiSaver

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KiwiSaver is a government savings scheme designed to help New Zealanders save for their retirement.


If you're working, you can contribute either 4% or 8% of your gross wage or salary to KiwiSaver. Use the Quick KiwiSaver calculator to work out how much that would be each pay, and what you’ll have saved by age 65.

From 1 April 2008, you will also be entitled to a compulsory
employer contribution. This will start at a minimum of 1% of your gross
salary, increasing by 1% each year until it reaches 4% on 1 April 2011.

Here are some of the key features of KiwiSaver:

You don't have to be working to join

To be eligible to join KiwiSaver you don't have to be employed but you do have to be:

  • A New Zealand citizen, or entitled to live in New Zealand indefinitely; and
  • personally present or normally personally present in New Zealand; and
  • under the age of eligibility for NZ Super (currently 65).

You can't join KiwiSaver if you hold a temporary, visitor or student permit.

You don’t have to join

KiwiSaver membership is voluntary. From 1 July 2007, if you’re 18 or
over and start a new job you’ll be automatically enrolled in KiwiSaver
(with some exceptions). 

But you can ‘opt out’ if you wish. Once you join you have to
contribute for at least 12 months. You can choose to ‘opt in’ at any

If you do join, you can build a nest egg for retirement

Every time you’re paid, an amount equal to either 4% or 8% (you
select the amount) of your before-tax pay will be deducted from your
take-home pay and sent to your KiwiSaver account. If your employer
agrees to match it you can start with a 2% contribution from your pay,
increasing that over time, until you and your employer are both
contributing 4%.

After paying in for 12 months you can take a contribution break or
carry on. It’s a long term savings scheme and you can’t touch your
money (with exceptions) until the eligibility age for NZ Super
(currently 65). If you’re between 60 - 64 years old when you join, you
can’t touch the funds for 5 years.

You can take KiwiSaver with you

If you change jobs or leave the workforce your KiwiSaver account goes with you. 

You get a kick start of $1,000 when you join

You can’t touch the $1,000 until the age of eligibility for NZ Super
(currently 65) or after 5 years, if you were between 60 - 64 years old
when you joined. You will also get an annual fee subsidy of $40 paid
into your KiwiSaver account.

You get up to another $1,040 each year as a tax credit

If you’re 18 or over you’ll get a tax credit matching the
contributions you’ve made to a maximum of $20 per week or $1,040 per
year. This money is paid into your KiwiSaver account annually. You have
to live in NZ to get this tax credit (with exceptions). If you
permanently leave NZ and withdraw your KiwiSaver contributions then
this tax credit amount is repaid to the government.

Your employer has to contribute also

From April 2008 your employer has to match your contributions to
KiwiSaver starting at a minimum of 1% of your pay, and increasing by 1%
each year until it reaches 4% in April 2011.

If your employer already contributes to another superannuation plan
in your name that amount may be offset against this compulsory
KiwiSaver contribution.

Your employer may contribute more than these amounts. Employer
contributions in amounts that match yours will be tax-free up to a
limit of 4% of your before tax pay.

You may get up to $5,000 for a deposit on your first home

The government may give you another $1,000 for every year you
contribute to KiwiSaver (minimum 3 years or $3,000, maximum 5 years or
$5,000) to go towards a deposit for your first home. This will depend
on your household income and the price of the home. The first home
deposit subsidy is administered by Housing New Zealand - visit their website for more information.

When you buy your first home you can make a one-off withdrawal of
all contributions and earnings on that money, except the original
$1,000 ‘kick start’ and the member tax credit (those amounts have to
stay in KiwiSaver until you’re eligible for NZ Super). 

Qualification for a home deposit withdrawal and subsidy may be
available to previous home owners if you're in the same financial
position as a first home buyer.

You can use some of it to pay off your mortgage

After paying in for 12 months you can divert up to half of your
contributions (but not any money your employer contributes, or the tax
credit) to mortgage payments on your main home (not an investment
property). That’s if your scheme provider offers this option.
Contributions diverted to paying your mortgage will not be matched by
the tax credit.

You can choose where your money’s invested

If you prefer, you can choose the organisation your KiwiSaver funds
are sent to and the type of investment option for your savings. See Funds and schemes to find out which organisations are involved in KiwiSaver.  

If you would rather not choose, your employer may have selected a
preferred organisation which they’ll send the money to, or the
government will select an organisation for you.


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