|Posted on 23 June, 2019 at 1:10|
If you are a member of a KiwiSaver scheme or a complying fund you’re eligible for the Government contribution, provided:
you’re 18 or over
not elegible to withdraw your savings, and
mainly reside in New Zealand
The Government will pay 50 cents for every dollar of member contributions up to a maximum payment of $521.43. This means that you must contribute $1,043 annually (before 30 June) to qualify for the maximum payment of $521.
Kiwisaver year end is 30 June 2019.
First Home Owners
You may be able to withdraw some of your KiwiSaver savings to put towards purchasing your first home.
You must have been a KiwiSaver member for three or more years. You can not withdraw funds for an investment property.
If you have owned a home before, in some circumstances you may still be eligible to withdraw your savings. Your scheme provider may require you to contact Housing New Zealand to determine if you're in the same financial position as a first home buyer.
In addition to withdrawal of funds, after 3 years of contributing to KiwiSaver, you may be entitled to a KiwiSaver HomeStart grant. The grants are administered by Housing New Zealand and will be paid directly to your solicitor.
HomeStart grants available are:
For purchasing an existing home, the grant is between $3,000 and $5,000 based on $1,000 each year of KiwiSaver membership.
For building or purchasing a new home, or for purchasing land to build a new home on, the grant is, in effect doubled to, $2,000 per year of membership in the scheme, up to a maximum of $10,000 for five years for each member.
To be eligible for a KiwiSaver HomeStart grant you must:
-have been contributing the required minimum amount to KiwiSaver for at least three years
-be 18 years or over
-be purchasing or building your first home
-have a household income (before tax) of less than $85,000 per year (for one person), or less than $130,000 per year (for two or more people)
-have a deposit that is 10% or more of the purchase price, including the addition of the grant
-be planning to live in the house for at least 6 months from the settlement/completion of the property.
KiwiSaver is very flexible if you're self-employed. You're not required to contribute a set percentage of your pay.
You can either:
-make lump sum payments when you choose, or
-set up regular payments.
If you're self-employed you can enjoy all the benefits of KiwiSaver except the employer contributions. When you join, if you're eligible:
-the Government will pay an annual member tax credit.
-you'll be able to take advantage of the first home buyer's benefits.
Employer contributions for shareholder employees who pay themselves on PAYE are tax deductible, however please keep in mind ESCT taxes are deducted from employer contributions before funds are added to the employees fund. Overall there are no tax advantages for shareholder employees in making employer contributions to themselves.
Withdrawal on Retirement
You become eligible to withdraw all your savings as a lump sum when you qualify for NZ Super (currently at the age of 65), as long as you've been a KiwiSaver member for a minimum of 5 years.
Any withdrawals from your KiwiSaver account are tax-free.
Talking with your bank or an investment adviser is worthwhile before making withdrawals, "open-PIEs" and "Managed Funds" may be preferable options.