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29 April 2022
Reading time: 3 minutes
Posted
by
Tom Hartmann
, 16 Comments
So, how much government money are you getting in your KiwiSaver this year?
Sure, it would be great to get the full amount of $521, but just in case you don’t have the whole $1043 in your back pocket to top up, it’s good to know that any dollar you put in will get 50 cents in there with it.
But time is running out – your contributions need to be in your KiwiSaver account by the end of June. The government money will then be paid into your account around the end of July.
How much could this matter? Because the money is invested over decades, an 18 year old in KiwiSaver getting that $521 boost each year could have as much as $36,000 more for their retirement when they reach 65.
As we say, free money is good money!
If you’re an employee earning a salary of $34,762 a year or more and contribute at least the minimum 3%, then good news – you’ll be automatically getting the full $521 from the government. No need to do anything.
If that’s you, you can breathe easy and think of those around you. Who do you know that could be missing out? Tens of thousands do. Make sure to mention that free money is better than nothing.
All of this matters most if you are self-employed, work part time, are a stay-at-home parent or are on a savings suspension – those who don’t have regular money going into KiwiSaver.
Your KiwiSaver provider will be able to tell you whether you’ve contributed less than $1043 this year. If so, there’s still time to top up your account by the end of June.
Topping up at this time of year – whatever you can manage – gets the government boost. So even if you’ve got $10 to spare, put it in – you'll get $5 from the government.
If you typically put in less than $1043 per year, here's how to set yourself up to get the full government money next year.
The KiwiSaver year runs from July to June. To make sure you don’t get caught short next year, set up an automatic payment with whatever you can afford starting this July. If you can put in $20 or more a week, that will get you the maximum government contribution.
This way, when next year rolls around, that free money will flow in without you needing to check anything.
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Comments (16)
Comments
29 May 21
Maria Snegirev
Does my total contribution include or exclude administration fees charged by the Kiwisaver provider?
28 May 21
I wonder how many people know that it is not compulsory for the employer to contribute to an employees kiwisaver scheme.
28 May 21
Tom from Sorted
Thank you! But the thing to check is your investment earnings, since that PIE tax was because of that. We see your point about government money going and coming overall, but the inflow and outflow were unrelated. We're guessing your investment returns made it worthwhile.
27 May 21
Thanks for your reply Tom, double-checked statement / provider as suggested and nothing to do with rise & fall of markets. Government Contribution $521.43 paid in and then PIE Tax $510.48 taken out so I guess the bottom line is that the reality of the Government Contribution to my Kiwisaver is $10.95, so yes better off.
26 May 21
Tom from Sorted
Thanks for commenting – you could check with your provider directly, but we're guessing that there were two unrelated things that happened in your account around the same time: you received your government money, and separately the government taxed your investment earnings. Or perhaps your account balance went down at that time because the market value of your investments did as well. KiwiSaver funds will do that. Bottom line: you would've been $521 less well off overall if you hadn't gotten the government contribution.
25 May 21
Yes it's good getting that government money, but it's then taken back by the tax on the kiwisaver savings!!! I got the $521.00 but then they took back $504.00. So the only "free money" I got was $17.00
Why is this not mentioned here?
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