What is KiwiSaver?

As a KiwiSaver member, the Government offers you a number of unique incentives to help you save for your retirement. Here are five great reasons to join KiwiSaver:

You get a $1000 kick-start just for joining

Everyone who joins KiwiSaver for the first time gets a $1,000 kick-start from the Government paid into their KiwiSaver account.

You may get Member Tax Credits which boost your savings

If you are a member of a KiwiSaver scheme, live in New Zealand and are aged 18 or over, the Government will contribute 50 cents for every $1 you contribute, up to a maximum Government contribution of $521 each year, until you turn 65 or have been a KiwiSaver member for five years, whichever is the later.

That means that, provided you are eligible, if you contribute $1,042 or more between 1 July and 30 June each year, the maximum Member Tax Credit of $521 will also be paid to your KiwiSaver account.

The Westpac KiwiSaver Scheme will claim the tax credit on your behalf after 1 July each year. You don’t have to do anything. Your Member Tax Credit will be paid into your KiwiSaver account around a month after we make the claim.

You may get contributions from your employer

If you’re over 18 and contributing to KiwiSaver from your salary or wages, your employer also has to contribute an amount equal to at least 3% of your gross salary or wages (subject to eligibility criteria).

Employer contributions have employer’s superannuation contribution tax (ESCT) deducted from them before they are credited to your KiwiSaver account. ESCT is usually the same as or less than your marginal tax rate.

You could use your savings to buy your first home

Once you’ve been a KiwiSaver member for three years, you may be eligible to withdraw all or part of your own and your employer’s contributions to put towards the purchase of your first home. In some circumstances you may also qualify as a second chance home buyer.

You could get a home purchase subsidy

After three years of contributing to KiwiSaver, you may be entitled to a first home purchase subsidy. The subsidy is administered by Housing New Zealand and is $1,000 for each year you have been contributing to KiwiSaver, up to a maximum of $5,000.

Conditions and eligibility criteria apply to these incentives (other than the kick-start).

These are the KiwiSaver benefits applying as at 1 April 2013. They could change in the future.

Go to www.kiwisaver.govt.nz for updates on changes to any of these incentives.

You’re never too young or too close to retirement age to start saving for your retirement. With a number of unique incentives to help people save, it is easy to see how KiwiSaver can work for people across different stages.

If you are under 18 years of age

You automatically get $1,000 kick-start and you can start putting away small amounts to get into the savings habit. Some of your KiwiSaver savings may be able to be used in the future to help buy your first home.

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Saving towards a first home withdrawal
• First home purchase subsidy

If you haven’t bought a home yet, earn a salary or wage (pay PAYE tax) and are over 18 years of age

After three years as a KiwiSaver member, you may be able to take out all or part of your own and your employer’s contributions to put towards buying your first home.

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Member Tax Credits
• Compulsory employer contributions
• Saving towards a first home withdrawal
• First home purchase subsidy

If you earn a salary or wages (pay PAYE tax), own your own home and are over 18 years of age

KiwiSaver allows you to choose a contribution rate of 2%, 4% or 8% of your gross salary or wages depending on your financial situation. The Member Tax Credits and your employer’s contributions are an added incentive. (The minimum contribution rate automatically increases to 3% from 1 April 2013).

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Member Tax Credits
• Compulsory employer contributions

If you’re self-employed (not paying PAYE tax) and you’re over 18 years of age

The Westpac KiwiSaver Scheme has no minimum contribution, so you can contribute as little or as much as you like, depending on your financial situation.

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Member Tax Credits
• Saving towards a first home withdrawal
• First home purchase subsidy

If you’re not currently working in paid employment (such as a stay at home parent or beneficiaries) and are over 18 years of age

If you’re not employed and/or a stay at home parent or a beneficiary, you can still join KiwiSaver. The Westpac KiwiSaver Scheme has no minimum contribution, so you can contribute as little or as much as you like, depending on your financial situation.

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Member Tax Credits
• Saving towards a first home withdrawal
• First home purchase subsidy

If you’re approaching retirement and earn a salary or wage

You have paid off, or nearly paid off, your home loan and are now looking towards retirement. You have some savings for retirement, but you may also contribute to KiwiSaver to make the most of the Member Tax Credits and compulsory employer contributions.

KiwiSaver incentives that may be available:

• $1,000 kick-start
• Member Tax Credits
• Compulsory employer contributions