Do you know that you can earn some extra cash from the Government for your KiwiSaver account? If the answer is no, then the great news is you could receive a government contribution of up to $521.43 per year!
Member Tax Credit 101
You may have heard the name Member Tax Credit or MTC floating around — don't let the name fool you, despite having the word tax in the name the MTC is an annual contribution from the Government to help you save. Keep reading to work out if you are on track to receive this and find out how you can take action to maximise this benefit.
If you are;
- 18 years of age or older;
- Mainly living in NZ; and
- Not yet eligible to withdraw for retirement
Then you are eligible to receive this benefit if you meet the contribution criteria! That means that for every $1 you save, the Government will contribute 50 cents to your KiwiSaver account, up to $521.43 each KiwiSaver year — which runs from 1 July to 30 June*.
Not working or Self Employed
So long as you meet all the criteria above you are still eligible! If you haven't contributed to your KiwiSaver account for the current year then you can make a voluntary contribution before 30 June 2018 to receive your subsidy.
Making the most of it?
To maximise this year's full MTC entitlement of $521.43 you need to have contributed at least $1,042.86 (roughly the equivalent of $20 per week) into your KiwiSaver account. That means for every $20 you put in the government will give you $10 — and if that doesn't sound like a lot how about $24,507? That's what $10 per week adds up to over 47 years (joining at 18 and contributing until 65), excluding investment earnings.
What do you need to do to grab the cash?
If you have not put in at least $1042.86, you can top up your KiwiSaver account for the current KiwiSaver year before Friday 29 June 2018. Read more here online about who is eligible for a MTC, how it is calculated, and how to make a payment — more here on topping up.
To confirm how much you may need to top up your account by, please call Inland Revenue on 0800 549 472 and make sure you have your IRD number on you and they should be able to confirm how much you have contributed via your employer to date.
If you would like to make a payment into your KiwiSaver account, please make sure you do this by Friday 29 June 2018.
* If you turn 18, or reach retirement age part way through a KiwiSaver year (1 July to 30 June), your entitlement to MTCs in that year will be pro-rated for the portion of the year you were entitled to MTCs e.g. if you turn 18 on 1 January, you will be entitled to a maximum of $260.