Government Contributions Archives - Christian Kiwisaver Scheme
‘Free’ contributions from the Government

‘Free’ contributions from the Government

Every year the Government makes contributions to the accounts of eligible KiwiSaver members, up to $521.43 each. These contributions are usually credited to members’ accounts in early July. In 2018 the Government paid $753 million in contributions to KiwiSaver members. Did you get your share of that? Make sure you receive your $521.43 this year by contributing enough before 30 June 2019.

How much can I get?

The Government pays 50c for every $1 you pay in, but there is a limit. The Government’s money is credited to your KiwiSaver account. To get the maximum amount of $521.43 from the Government, you need to pay at least $1,042.86 each year. This equates to $20 a week. Here are some examples of how this works:

Your personal contributions Money from Government
Weekly Annual Annual
Over $20 Over $1,042.86 $521.43 max
$20 $1,042.86 $521.43 max
$15 $781.14 $390.57
$10 $521.43 $260.71
$5 $260.71 $130.35

If you are an employee and earn $34,762 p.a. or more, and contribute the minimum 3% of your pay to KiwiSaver then you’ll qualify for the maximum without having to do anything else.

If you want to receive the maximum amount for the year ending 30 June 2019 year then you can make a top-up contribution if you wish to do so. But this needs to be done before the end of June 2019.

Who can get this free Government money?

The Government will make an annual payment into your KiwiSaver account as long as you:

  1. have made personal contributions to your KiwiSaver account during the year;
  2. are aged between 18 and 65*; and
  3. were resident mainly in New Zealand.

*Eligibility for the Government’s money can extend beyond 65 if you have not been in KiwiSaver for 5 years; in which case it ceases after 5 years membership.

You can make personal contributions to your KiwiSaver account by deductions from your pay, or regular payments, or lump sum payments.

Not sure about your personal situation

You are welcome to contact us to check on your situation, or you can log on to your member section of the Christian KiwiSaver Scheme website to access your personal information.

Are you missing out on the free KiwiSaver money?

Are you missing out on the free KiwiSaver money?

Every year there are some KiwiSaver members, including members of the Christian KiwiSaver Scheme, missing out on receiving the Government’s free KiwiSaver money. That is like flushing money down the drain!

The Government paid $697 million, yes that’s $697 million, to KiwiSaver members accounts in 2017. Of this just under $0.5 million was paid to Christian KiwiSaver Scheme members. Did you get your share of this? Do you know how much you can get?

How much can I get?

The Government pays 50c for every $1 you pay in, but there is a limit. The Government’s money is credited to your KiwiSaver account. To get the maximum amount of $521.43 from the Government, you need to pay at least $1,042.86 each year. This equates to $20 a week. Here are some examples of how this works:

Your personal contributions Money from Government
Weekly Annual Annual
Over $20 Over $1,042.86 $521.43 max
$20 $1,042.86 $521.43 max
$15 $781.14 $390.57
$10 $521.43 $260.71
$5 $260.71 $130.35

If you are an employee and earn $34,762 p.a. or more, and contribute the minimum 3% of your pay to KiwiSaver then you’ll qualify for the maximum without having to do anything else.

If you want to receive the maximum amount for the year ending 30 June 2018 year then you can make a top-up contribution if you wish to do so. But this needs to be done before the end of June 2018.

Who can get this free money?

The Government will make an annual payment into your KiwiSaver account as long as you:

  1. have made personal contributions to your KiwiSaver account during the year;
  2. are aged between 18 and 65*; and
  3. were resident mainly in New Zealand.

*Eligibility for the Government’s money can extend beyond 65 if you have not been in KiwiSaver for five years; in which case it ceases after five years membership.

You can make personal contributions to your KiwiSaver account by deductions from your pay, or regular payments, or lump sum payments.

Do I need to be employed?

No, you don’t have to be in paid employment to get the free Government money. You just need to meet the three conditions above. If you’re not sure about your personal situation, contact us on 0508 738 473.

How does the money get into my KiwiSaver account?

In July each year, we claim the Government money (called a ‘member tax credit’ contribution) from the Government on behalf of every Christian KiwiSaver Scheme member who is eligible. The claim is based on the amount of personal contributions paid over the 12 months ending 30 June.

Not sure about your personal situation

You are welcome to contact us to check on your situation, or you can log-in to your member section of the Christian KiwiSaver Scheme website to access your personal information.

Is it worth contributing to get this free money?

In our opinion yes.

Once this free money from the Government is in your account it is then invested on your behalf. Small amounts can add up to a lot over time – see the example in the table below:

EXAMPLE
1 year After 5 years After 10 years After 20 years
Personal contributions 1,042.86 5,214.30 10,428.60 20,857.20
Money from Government 521.43 max 2,607.15 5,214.30 10,428.60
Total $1,464.29 $7,821.45 $15,642.90 $31,285.80

Time to reward yourself

Time to reward yourself

Retirement savings may not be in your thoughts at this time but did you know that you may be missing out on free Government money?

Every year the Government offers KiwiSaver members the opportunity to receive a credit of up to $521.43. That annual bonus contribution can really add up over the years and make a meaningful difference to the balance of your nest egg.

There are some conditions – you have to be resident in New Zealand, aged between 18 and 65 and you also have to make personal contributions – to be eligible for these bonus contributions.

There are many reasons why a member might stop making contributions however we don’t think this should be a set and forget decision. By not contributing you are missing out on:

  • bonus Government contributions
  • employer’s contributions (if you are employed); and
  • the opportunity for investment earnings on these amounts.

If you are not currently contributing then take time to consider whether you want to resume regular contributions.

A little bit saved up over a long period can add up to a lot, and the bonus Government contributions may make a real difference to your overall savings.

Not in paid employment

There’s a common misconception going around that you have to be in paid employment to qualify for the Government contributions. You don’t, you just have to make personal contributions.

In paid employment

If you are in paid employment and have stopped contributing (e.g. on a ‘contribution holiday’) then you can restart your contributions by asking your employer to begin making deductions again. Your employer will then be required to begin compulsory employer contributions again.

If you are working and earning more than $34,800 a year then the regular 3% deduction from your pay means you will qualify for the maximum bonus Government contribution.

Contributing less than $1,042 a year

If you are contributing but your personal contributions are less than $1,042 a year then consider making some additional regular or lump sum contributions so that you can qualify for the maximum free Government contribution.

Earning less than $34,800? Then consider making some additional regular or lump sum contributions so that you can qualify for the maximum free Government contribution.

The Government contribution amount is worked out on the personal contributions you make between 1 July and 30 June each year.