Member Tax Credits

The Government offers eligible KiwiSaver members a member tax credit each year up to $521.43. But there are a few rules about who is eligible and how these are calculated (particularly in the first year of membership). The page below will help to explain the rules so that you can maximise the amount you are eligible for.

• What are member tax credits?
• Who can get the member tax credits?
• How are the member tax credits calculated?
• What if I joined part way through the year (1 June – 30 July)?
• How can I top-up my contributions to make sure I receive the maximum member tax credits?
• How do I make additional contributions to my ASB KiwiSaver Scheme?
• When are the member tax credits paid to my KiwiSaver account?

What are member tax credits?

If you mainly live in New Zealand and are contributing to KiwiSaver, then every year from age 18 until when you can take out your end KiwiSaver retirement savings, you will receive a member tax credit from the Government of $521.43 if you contribute $1,042.86 each year.

The member tax credit year runs from 1 July to 30 June each year. The member tax credit will be added to your KiwiSaver savings each year within a few months of 30 June. This amount is paid to your KiwiSaver account after it's claimed by the ASB KiwiSaver Scheme, and Inland Revenue have processed the request.

Who can get member tax credits?

To get the member tax credits you must:

• have been a member of a KiwiSaver scheme or complying superannuation fund at some time during the period (1 July to 30 June), and
• be aged between 18 and 65 (or the date five years after you first joined a KiwiSaver scheme or complying superannuation fund, if later), and
• mainly live in New Zealand, and
• make KiwiSaver contributions - to get the maximum amount your contributions need to be at least $20 per week (excluding any amounts used for Mortgage Diversion).

There are a few exceptions so if you would like to find out more, visit www.kiwisaver.govt.nz

How are the member tax credits calculated?

The member tax credit year is from 1 July to 30 June. To receive the maximum member tax credit of $521.43 you must have:

• been an eligible KiwiSaver member for the entire 12 months, and
• contributed at least $1,042.86 yourself between 1 July and 30 June each year.

If you have been an eligible member for the full year and contribute less than $1,042.86, then you will receive an amount equal to half the proportionate amount you have contributed. This excludes any amounts used for Mortgage Diversion or any contributions made by the Government or your employer. For example, if your contributions were $500 over the year and you did not use any of this amount for Mortgage Diversion, then your member tax credit would be $250. If you used 50% of the $500 for Mortgage Diversion, then your member tax credit would be $125.

If you earn less than $52,000 and contribute 2% then your contributions will not add up to $1,042.86. Therefore you will not receive the maximum member tax credit, unless you make extra contributions.

What if I joined part way through the year (1 June – 30 July)?

If you join KiwiSaver part-way through a year and are eligible, then at the end of the first year (30 June) you'll receive a member tax credit in proportion to the length of time you've been in KiwiSaver.

For example, if Inland Revenue considers your start date for member tax credits to be 1 January, for the year to 30 June you'll receive $260.72, which is half of the maximum annual member tax credit because you joined six months into the year. The date Inland Revenue considers your start date will depend on how you joined:

• If you joined through your employer - then your start date will be the earlier of the first day of the month that a contribution was first deducted from your pay, or the first day of the month that your first contribution is received by Inland Revenue. This is the same whether you were automatically enrolled because you started a new job or requested your employer to join you up.
• If you joined through a KiwiSaver provider - then your start date will be the earliest of the date your KiwiSaver account was opened, the first day of the month that a contribution was first deducted from your pay, or the first day of the month that your first contribution was received (either by Inland Revenue or your KiwiSaver provider).

There are a few exceptions, visit www.kiwisaver.govt.nz for details.

How can I top-up my contributions to make sure I receive the maximum member tax credit?

If you have been a member of a KiwiSaver scheme and meet the eligibility criteria to receive member tax credits, you can choose to top-up your savings in order to receive the maximum benefits.

You can top up your savings by making either additional regular contributions or a lump sum contribution. For example, if you have been an eligible KiwiSaver member for at least 12 months, your yearly income is $25,000 and you are contributing 2% of your gross salary or wages, then your total annual KiwiSaver contributions will be $500. If you make a lump sum payment of $542.86 prior to 30 June, then you would have contributed a total of $1042.86 for the year (1 July to 30 June) and will then be eligible to receive your maximum member tax credit.

See below for more examples of voluntary contributions required to receive the maximum member tax credit:

If your income is	Annual KiwiSaver contributions at 2% of your gross pay	Voluntary contributions required to reach $1,042.86	Annual KiwiSaver contributions at 4% of your gross pay	Voluntary contributions required to reach $1,042.86
$5,000	$100.00	$942.86	$200.00	$842.86
$10,000	$200.00	$842.86	$400.00	$642.86
$15,000	$300.00	$742.86	$600.00	$442.86
$20,000	$400.00	$642.86	$800.00	$242.86
$25,000	$500.00	$542.86	$1,000.00	$42.86
$30,000	$600.00	$442.86	$1,200.00	$0.00
$35,000	$700.00	$342.86	$1,400.00	$0.00
$40,000	$800.00	$242.86	$1,600.00	$0.00
$45,000	$900.00	$142.86	$1,800.00	$0.00
$50,000	$1,000.00	$42.86	$2,000.00	$0.00
$52,000	$1,040.00	$2.86	$2,080.00	$0.00
$53,000	$1,060.00	$0.00	$2,120.00	$0.00

How do I make additional contributions to my ASB KiwiSaver Scheme?

There are three ways that you can make additional contributions direct to your ASB KiwiSaver Scheme:

1. Cheque
   Cheques will need to be made out to "ASB KiwiSaver Scheme" and sent to us with a completed Lump Sum Contribution Form.
2. Direct Debit
   Make regular contributions by completing the ASB KiwiSaver Scheme Direct Debit Form.
3. Direct Credit
   Make a direct credit to the nominee account for the ASB KiwiSaver Scheme through your bank at a branch.

Note: In all instances, the amount you deposit will be credited to your KiwiSaver account and allocated to your Investment Funds according to your Investment Strategy.

You can also make additional payments to the ASB KiwiSaver Scheme through Inland Revenue. Please visit www.kiwisaver.govt.nz for further details.

When are member tax credits paid to my KiwiSaver account?

The member tax credit will be paid to your KiwiSaver savings each year within a few months of 30 June. This amount is paid to your KiwiSaver account after it's claimed by the ASB KiwiSaver Scheme, and Inland Revenue have processed the request.