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KiwiSaver Key Facts

Key Facts about KiwiSaver

  • All KiwiSaver members are entitled to a $1,000 kickstart from the Government.
  • All member contributions to KiwiSaver (and complying superannuation funds) are matched by a tax credit of up to $20 per week ($1,042.86 per year) that will be paid directly into their KiwiSaver account (or complying superannuation fund, or a combination of both).
  • After three years of saving, some savers that are first home buyers will be eligible for a housing deposit subsidy of $1,000 per year of saving, up to $5,000 in total. Eligibility for the subsidy is determined by the individual's income and house price caps.

Participation

  • Employee contributions will continue to be voluntary.
  • From 1 July 2007, most new employees will be automatically enrolled in KiwiSaver, but can choose to opt out.
  • Existing employees will be able to opt in. New employees whose employer is exempt from automatic enrolment will also be able to opt in.

Contributions

  • The contribution rates from gross salary will be either 2 per cent, 4 per cent or 8 per cent. The contribution rate will be 2 per cent unless the higher rate has been elected by the employee.
  • Compulsory employer contributions will be capped at 2% of salary or wages.
  • Anyone is able to join KiwiSaver by contracting directly with a scheme provider and making contributions. These contributions can be of any amount subject to a provider's agreement and will in many cases be eligible for the matching member tax credit contribution.
  • Any time after an initial 12 month contribution period an employee can apply to Inland Revenue for a contributions holiday.

If you are self employed or not employed

  • You are, in most cases, be able to join KiwiSaver by contracting directly with a KiwiSaver provider.
  • Your contribution rate is be agreed with the scheme provider.
  • You receive the $1,000 KiwiSaver kickstart and annual fee subsidy.
  • If you meet the qualifying criteria your contributions are matched by a tax credit of up to $20 per week ($1,042.86 per year).

Withdrawals

  • Contributions are generally locked in until the age of eligibility for New Zealand Superannuation (currently 65 years of age) or five years of membership, whichever is the later.
  • Exceptions can be made for some funds to be withdrawn for the purchase of a first home, significant financial hardship, serious illness and permanent emigration.
  • After one year of being enrolled in a KiwiSaver scheme, individuals will, subject to certain conditions, be able to divert up to half of their own contributions to make mortgage payments on their principal place of residence, for those schemes that offer what is called a "mortgage diversion" facility. These contributions will not be eligible for the member tax credit.

Choice of Scheme

  • Savers can select their own KiwiSaver scheme and investment products and can change schemes or investment products at any time.
  • Savers who do not specify a KiwiSaver scheme are allocated by Inland Revenue to a conservative investment strategy fund with one of six named default KiwiSaver scheme providers.
  • Savers can only have one KiwiSaver scheme at any point in time.

 

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