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KiwiSaver: How Can I Get A Contributions Holiday?

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Mary Holm
Mary Holm


I have been told that to take a KiwiSaver contributions holiday of up to five years I must apply to IRD, and it is not guaranteed that it will accept my application.

Do I have to plead poverty or is this my right? This will make my decision to join up or not.


Mary Holm: Go ahead and get on board.

Inland Revenue says it will "automatically approve" anyone's request to take a contributions holiday, as long as you have been in KiwiSaver for 12 months or more.

Check out the form on, by clicking "KiwiSaver forms and services" on the left side. It's all quite simple.

If you have been in KiwiSaver less than a year, you have to explain that you are experiencing financial hardship - although I've heard anecdotally that it's not all that hard to do that.

If anyone has a problem taking a holiday after they have been in the scheme for more than a year, please let me know.

Non-employees don't even have to go through the process. They can just stop contributing at any time.

While we're on the subject, not everyone realises that if you take a contributions holiday you can continue to contribute any amount you like - not via work but directly to your provider. And I would highly recommend that you keep putting in any amount up to $1043 a year, because that will be matched dollar for dollar by the tax credit. Your money is doubled.

If you are on a contributions holiday, your employer won't have to contribute. But if you ask nicely they may be willing to put in up to $1043 a year, as they will get that reimbursed by the government.

While employer contributions are usually not taxed - up to the lower of the employee's work contribution or 4 per cent of the employee's pay - they would be taxed if you are on a contributions holiday because your work contributions are zero. Still, the after-tax money would be a good boost to your KiwiSaver account.


Mary Holm is the author of bestselling books on KiwiSaver and personal finance. She is also a highly praised seminar presenter. Her written advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following that advice.    

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