How big a difference could your annual KiwiSaver Government contribution make?

14 June 2018 / Published in Your Money

Are you missing out on an extra $521.43 a year? It might sound too good to be true, but that’s exactly what you could receive from the Government each year for contributing to your KiwiSaver account. It’s called an annual Government contribution or Member Tax Credit (MTC), so whether you’re saving for your first home or a comfy retirement, that $521.43 could make a big difference.

How big a difference could your MTC make?

A 20 year old who maximises their MTC every year until the age of 65 would receive $23,464.35 towards their retirement from the Government. Over that time this could grow into as much as $96,365 in future dollars after returns and fees!*

That’s no small bonus, enough to fund approximately 20 round the world flights or 20,000 flat whites. You could even help the grandkids through their tertiary education.

So why would you want to miss out?

To be eligible for Government contributions, you must:

  • Be between 18 and the KiwiSaver retirement age (currently 65) or, if you first joined KiwiSaver or a complying superannuation fund over the age of 60, five years after you joined
  • Live mainly in New Zealand
  • Have contributed to your KiwiSaver account during the year (1 July – 30 June).

Tick each of the above and the Government will contribute 50 cents for every dollar you contribute, up to a maximum of $521.43 each year. To get that maximum, you’d have to contribute $1042.86 over the course of the year (to 30 June), which works out to be about $20 a week. That’s only $20 a week to potentially wind up with an additional $96,365 in retirement.

Employer contributions, Government contributions and amounts transferred from an Australian complying superannuation fund don't count towards your entitlement.

Say you’re a self-employed electrician. As you may not be receiving regular wages or a salary, deductions may not be automatically taken from your income. If you haven’t been making voluntary payments, whether through lump sums or by setting up regular payments, you may be in risk of missing out on your MTC. And, as demonstrated above, missing out on these payments could make a big difference in the long run.

If you’re not sure whether you’ve contributed enough, here’s how you check:

  • If you’re an ASB KiwiSaver Scheme member, log in to FastNet Classic internet banking to review your voluntary contributions.
  • Use IRD’s My KiwiSaver service to find out how much you’ve contributed from your salary or wages
  • Check your payslips to see how much you’ve contributed from your salary or wages.

If you earn over $35,000 and contribute at least 3% of your salary, there’s a good chance you’ve contributed enough without even realising it, but it always pays to check. Your contributions are calculated between 1 July and 30 June annually, so if you need a top up, now’s the time to get it in. It could make a big difference to your KiwiSaver balance in the future.


The content discussed here is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial advice. As individual circumstances differ, you should seek appropriate professional advice.

Interests in the ASB KiwiSaver Scheme (Scheme) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides Scheme administration and distribution services. No person guarantees interests in the Scheme. Interests in the Scheme are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement available from ASB’s website and the register of offers of financial products at www.business.govt.nz/disclose (search for ASB KiwiSaver Scheme).

*Assumptions of this calculation:

  • This figure has been calculated based on an annual contribution of $521.43 to replicate the effects of receiving the maximum member tax credit each year.
  • This calculation assumes funds are initially invested in the ASB KiwiSaver Scheme Growth Fund, but that your fund changes over time as you get closer to your savings goal. This aligns to ASB’s approach to recommending a fund that’s right for you based on your investment timeframe. If you would like to know which fund we’d recommend for you check out our Help Me Choose tool.
  • The monthly administration fee of $2.50 and the relevant Investment Management fee for each fund selection has been considered throughout. For more information about fees relating to the ASB KiwiSaver Scheme, please see section 5 of the ASB KiwiSaver Scheme Product Disclosure Statement.
  • All investment returns used in the calculations are based on our current expectations of future returns and are net of 28% PIE tax. Therefore PIE tax is encompassed within the investment returns and not calculated retrospectively.
  • The resulting figure is displayed in future dollars

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