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You can gain from Govt’s KiwiSaver credits
 
Q.           I believe the Government is still giving KiwiSavers 50c for every dollar they put in up to $1042. How do I find out if I have put in enough to get my full entitlement this year? I earn $42,000 per annum and have been contributing the minimum – now 3% - from my wages.
 
A.           KiwiSaver contributions for Member Tax Credits are calculated over the period from 1 July to 30 June each year. Yes you are correct, all eligible KiwiSaver members are given up to $521 in MTC from the Government if they contribute at least $1042 during that period. The main criteria for eligibility are being over 18 and living in New Zealand. Only your own contributions are taken into consideration, not employer contributions, so you need to find out if you have contributed enough or if you need to top up your account.
 
If you turned 18 or 65 during the year or joined KiwiSaver less than 12 months ago, you will receive a pro rata payment (up to $10 per week for the period that you were entitled to the MTC). 
 
You can find out what your contributions have been by checking online through the IRD “My IR” log in. If you have not registered on this website it is worth doing so. Its purpose is ‘to manage your tax and entitlements online’ and it is particularly useful to track KiwiSaver contributions made through salary and wages. 
 
If you want to work it out yourself, remember that your contributions would have been 2% of your salary to 1 April 2013 when they went up to 3%. This gives an average over the 12 months of 2.25%. I have worked it out for you, and it looks like your contributions total around $945. You will need to top up your account by $97 to get the maximum MTC of $521. Next year if your salary remains the same you won’t need to worry as 3% will easily get you over the threshold.
 
Time is ticking so assuming you have the funds, get your payment made as soon as possible. Phone your Kiwisaver fund manager for help or go to their website. They are keen to see their members get their maximum entitlement so there will be information on their website to help you with this. Most fund managers will give you the option of making an online payment quoting your account number, or sending a cheque with the appropriate ‘top up’ form. I would urge you to get it to them by Friday 21 June, so that they have time to process it.
 
It is particularly important for self-employed people to make the effort to top up their accounts, if they are not already paying in the equivalent of $20 per week by direct debit. Likewise students or anyone over 18 who is not working can top up their account if they have the means. It would not make a great deal of sense for someone to borrow or put themselves into extreme hardship for the sake of an extra $521 which they won’t get the benefit of for many years, but anyone who can afford to should seriously consider it. Last year the Government paid out $799 million in Member Tax Credits. Can New Zealand afford this rather large carrot? With over 2 million New Zealanders now in KiwiSaver it could be argued that MTC have served their purpose. Don’t be surprised if they are scrapped within 5 years, so make the most of them while you can. 

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 www.peak.net.nz. or email shelley.hanna@peak.net.nz

Published in the Hawkes Bay Today 18 June 2013