KiwiSaver schemes are now well entrenched in the New Zealand savings culture. However, there are a multitude of New Zealanders who, for a variety of reasons, still do not fully understand how it works. We have looked back over the past five years at the questions we get regularly asked and have compiled answers to the common misconceptions.
- Can I continue to contribute after age 65? Yes, you can continue contributing to your chosen KiwiSaver scheme for as long as you wish. After the age of entitlement for NZ super (currently 65 years), the employer is no longer compelled to continue with contributions unless this is specified in a contract agreement.
- Does the Government continue to pay member tax credits (MTC) after age 65? No. The MTC is paid annually (around July/August) to members until they are eligible to withdraw their savings. This eligibility point is currently age 65.
- How can I get the maximum MTC if my regular contributions do not amount to $1,042.86 per annum? The MTC provided by the government is currently $521.43. You can make a voluntary contribution to your scheme (to bring your annual contributions to $1,042.86) to ensure you receive the full MTC amount.
- When can I access my KiwiSaver scheme? Contributions to KiwiSaver are locked in until the age of entitlement for New Zealand Superannuation, or five years after the first contribution, whichever is the later. However, funds can be accessed earlier to assist with the purchase of a first home after at least three years membership; on proving significant hardship, death, or serious illness; or permanent emigration (excluding to Australia).
- Do first home buyers automatically receive the HomeStart grant? No. There are a number of criteria one must meet to be eligible for a HomeStart grant. These include things like having contributed for a minimum of three years; purchasing a home under the maximum value for the region; income being under the income cap; being aged 18 years or older, and not currently owing land or property. See us for more details.
- Can my kids or grandchildren receive MTCs? That depends on their age. You can contribute money to their KiwiSaver scheme but MTCs are only available once someone is 18 years or over.
Please give us a call if you have any queries regarding KiwiSaver schemes.
Updated August 2017