Make sure you contribute at least $1,042 to your KiwiSaver account by June Year.
In July of each year the IRD makes a Member Tax Credit (MTC) payment into the KiwiSaver accounts of contributing members living in New Zealand aged between 18 and the age at which the member is entitled to receive their benefit (i.e. the later of age 65 or after five years' KiwiSaver membership).
In plain English: the government puts money into a KiwiSaver members personal KiwiSaver account, which is added to your retirement savings.
It works like this:
To claim the maximum MTC of $521.43 a member will need to have made contributions of at least $1,042 into their account. Employer contributions and government contributions do not count towards MTCs.
So the government will match half of your contributions with a tax credit to your KiwiSaver account, up to a maximum of $521.43 each year (under current rules).
If a member joins KiwiSaver part way through a year or turns 18 during the course of the year, their MTC entitlement is pro-rated accordingly. Similarly, anyone turning 65 during the course of a year is only entitled to MTC credits for the period they were aged under 65 (unless they have been in KiwiSaver for less than five years in which case they are entitled to receive MTC's for the full five year period).
Those contributing less than the required $1,042.86 have the option of making voluntary contributions before the end of the scheme year to ensure they maximise their MTC entitlement. For these voluntary contributions to have the desired effect they must be processed by mid-June (to ensure they are in the member's account by the end of the month).
- Last updated on .