Why you should maximise the Government contribution to your KiwiSaver account

Last updated 28 June 2022

It's not often that we get offered free money, but the top-up the Government makes to eligible KiwiSaver accounts is the closest thing you'll find. If you contribute enough to your KiwiSaver each year, the Government will reward you with a bonus contribution of $521.43 - but you need to make sure you're at or above the eligible threshold by the end of June. 

Find out how the Government KiwiSaver contribution works and how to make sure you maximise it.

It's a guaranteed return

All you need to do is put in $1,042.86 yourself each year and you'll receive half of that again in your KiwiSaver account as a contribution from the Government. That doesn't include employer or Government contributions, transfers, or any investment returns accumulated over the year. The Government will still match 50c of every dollar you put in up to the $1,042.86, so even if you can't put the full amount in, you'll still get a bit of a boost. 

If you've only been in KiwiSaver for part of the year (or turn 18 or become eligible to withdraw), you'll only be entitled to a part payment - generally $20 a week for the number of weeks you've been a member.

The only eligibility conditions are that you need to be aged 18-64 (or been in KiwiSaver for less than 5 years if you were over 60 at 30 June 2019) and currently living in New Zealand. 

Check your contributions

The $1,042.86 required works out at $20 a week over the course of the year. If you work full-time and contribute the minimum 3% of your income to your KiwiSaver, you've probably already met this threshold if you earn over $35,000 p.a. If you're a contractor or freelancer, work part-time, or aren't working at the moment, you might not be there yet. If you haven't contributed $1,042.86 already, you can top up your account yourself - see below for more about this. 

Take the time to log into your IRD account or check directly with your KiwiSaver provider to review how much you've contributed in this financial year. 

The power of compounding returns

Albert Einstein reportedly called compound returns the eighth wonder of the world. It's worth remembering that $521.43 isn't just $521.43, but has the power to grow to a much larger amount over the years thanks to the power of compound returns. With compound returns, any returns are able to earn even more returns. 

Let's make a few assumptions and say you're 30 on 30 June this year and your KiwiSaver returns are 5% a year. That would mean that $521.43 payment would turn into $2,876.22 by the time you turn 65. If you keep contributing and get the Government top-up every year until you retire, the resulting sum could make a big difference to your retirement. And that's before you include the compounded value of your employer's contributions - and your own - to your KiwiSaver account. 

Get in before the end of June

KiwiSaver contributions can take a few working days to process, so make sure you get onto it quickly. The cutoff for contributions is 30 June, so if you need to make a contribution to reach the threshold, you should make that payment at least a week beforehand to make sure it's processed in time. 

If you've already put in more than $1,042.86, you don't need to do anything - the Government contribution will automatically be added to your KiwiSaver account, usually some time in July. 

Making contributions

You can make contributions directly to your MAS KiwiSaver account to maximise your Government contribution. You can do this by:

• Making a direct credit (through online or phone banking) to the following account: 06-0541-0253131-00.

Please include your Member number (#Member Number#), initials, surname and 'MAS KiwiSaver' as reference details with your payment. 

Once you've paid at least $1,042.86, there's nothing more to do - we'll claim your entitlement from IRD on your behalf.