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Catching the last wave


Q.      In a recent column you said that the reader’s Member Tax Credits would stop at the age of 65.  I joined KiwiSaver when I was 64 years old.  I received Member Tax credits for 5 years.  They did not stop when I turned 65.  Can you please explain?


A.     You made a smart decision to join KiwiSaver at the age of 64.  Once a person turns 65 they are not eligible to join KiwiSaver but existing members can stay in the Scheme as long as they like.  Many members may find that they are a convenient and low cost way to diversify their savings in retirement.


The column you refer to was in answer to a reader who had been a member for more than 5 years.  Their entitlement to Member Tax Credits or MTC will cease when they turn 65.


However, everyone who joins KiwiSaver receives MTC for at least 5 years and has to wait at least 5 years before accessing their funds. So if, as in your case, they join at age 64 they will receive MTC for 5 years and will be eligible to get their money out at age 69.


Member Tax Credits are something of a misnomer as they have nothing to do with either tax or credit.  You do not have to be a tax payer to receive Member Tax Credits.  Anyone over 18 and under 65 (except for late starters like you) able to save $20 a week into their KiwiSaver Scheme will receive $10 in MTC.  The MTC is paid as a lump sum in July each year directly into the member’s KiwiSaver account.


A better name for Member Tax Credits would be Member Bonus Payments.  Along with the ‘kick start’, it is one of the reasons that most contributing KiwiSaver members have been very pleased with the growth of their savings.  For the 12 months to 30 June 2012 the Government paid a whopping $800 million in MTC into KiwiSaver accounts.  Despite cutting the MTC entitlement in half, this was the biggest year yet for MTC with so many more New Zealanders now in the Scheme.


It is up to the fund managers to identify each member’s entitlement and to submit their claim to Inland Revenue in July each year.   I would urge everyone to double check their KiwiSaver accounts in August to make sure they have received their full entitlement.  If they have contributed at least $1042 themselves then they should receive $521 in MTC, although it will be pro rata’d if their entitlement stops (or starts) during the KiwiSaver year. 


Make the most of MTC while we have them.  KiwiSaver is now well established in New Zealand and with employer contributions going up to 3% in April I would not be surprised if Member Tax Credits were abolished within the next 3 years.



Shelley Hanna is an Authorised Financial Adviser FSP12241.  Her disclosure statement is available on request and free of charge by calling 8703838.  The information contained in this article is of a general nature and is not intended to provide personalised advice.  If readers have any KiwiSaver questions they would like answered please go to or email

Published in the Hawkes Bay Today 5 February 2013