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How to Get $521 from the Government!

Date 331addf45bb3516008aff5fb298ee62ac379c2c3a2b3907f5779c303044d921a Jul 13, 2020
Blog category fe5ce5147ae753a2d3756d369ad2708a946a9a272087e636187c73e45c076f93 Kiwisaver
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You’ve made sure to compare KiwiSaver fund types, you’ve picked the contribution rate that suits you – what else can you do to get the most out of KiwiSaver?

If there was a way to optimise your KiwiSaver so that you get an extra $521 from the government – no matter which provider you’re with – would you be interested?

Read on to find out more!

Are you missing out?

If you qualify for the full member tax credit, you could be getting an extra $521 paid into your KiwiSaver account by the government – not just once, but every year.

Taking the opportunity to get this extra, annual contribution from the state could go a long way to securing your future retirement, and yet, not many people know about the member tax credit at all.

In 2016, over one million New Zealanders didn’t qualify for the contribution, and the IRD found that 62 per cent of those who missed out didn’t even know about it. 

What does it take to qualify?

You qualify if you’re a NZ-based KiwiSaver member over 18 years of age, but under the age to be eligible for retirement withdrawals. In order to get the full amount, there’s a few easy steps to follow:

  • The $521.43 is derived from the contributions the government makes for every dollar you do. For each dollar you commit, the government adds 50 cents.

    That means by putting at least $1,042.86 into your KiwiSaver – between 1st July and 30th June – you get the maximum possible amount that the government can offer.

    Many members get confused as the $1,042.68 you need to add yourself doesn’t include employer contributions, or contributions made from Australia through Trans-Tasman retirement savings portability.

    If you turned 18 partway through the year, the government’s contribution is only based on the number of days that you were 18 for. The same rules apply for joining KiwiSaver for the first time during the year.
  • The required contribution of $1,042.86 can be made through your pay, but if your pay isn’t high enough to meet that threshold, or you’re self-employed, a stay-at-home parent, or taking a contributions holiday, you can make extra donations to bring your contributions up to the threshold.

    Of course, many of us can’t pay around a thousand dollars at the drop of a hat, so setting up automatic payments is a great way to go for many.

    Paying an extra $20.06 a week is all it takes to qualify for the full member tax credit.  

What else is involved?

An easier way to qualify is to adjust your contribution rate.

If you missed the chance to choose between 3%, 4% and 8% contributions when you enrolled, it’s likely that you were automatically placed in the default rate of 3%, which isn’t typically enough to meet the requirements for the full member tax credit. 

Leaving enough time for your contributions to process is also important. Because of the surge of donations near June 30th – the end of KiwiSaver’s financial year – you may want to make sure all your payments are made a little in advance, so they have time to process before June 30th, ensuring you get the full $521.43.

Make a KiwiSaver comparison today

If you want to get the most out of your KiwiSaver, and be ready for retirement, make sure you’ve ticked all the boxes.

Paying enough to qualify for the full annual member tax credit is important, but so is having the right provider. Make a KiwiSaver comparison with glimp today!

It’s free, and could put you on a much shorter path to retirement. Don’t wait, talk to the team at glimp!

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Google rating 3d550da73015d4619d871361ff35a16af6f9290008b572d3db617236fd96fcb5 +
Joy Jones , 2020-07-21

Great getting the broadband at a cheaper rate for 6 months but didnt score a good deal for the power - paying a little more than the one I was with.