Make sure you’re getting your full KiwiSaver tax entitlement
Government Tax Credit
An important component of any person’s KiwiSaver savings is the contribution that the Government makes each year, referred to as the Government tax credit.
If you are aged between the age of 18 and 65 and you personally contribute $1,042.86 in the period between 1 July and 30 June each year (not including your employer contributions), the Government will deposit an amount of $521.43 in your KiwiSaver around September each year.
If you contribute less than $1,042.83, the payment from the Government is prorated, so that you get 50 cents for every dollar that you contribute.
Over one million kiwis missed out on full tax credit
The statistics from the Commission for Financial Capability stated that, for the 2016 KiwiSaver year, 580,000 KiwiSaver members did not get any tax credits at all. This is either because they were on repayment holidays (salaried earners), or just not contributing to their KiwiSaver (self-employed or not working). A further 609,000 KiwiSaver members did not get the full tax credits, because they had not personally paid in $1,042.86 over the 12 months.
$87pm direct debit to KiwiSaver
If you are not having PAYE deducted from your wages and therefore need to contribute to your KiwiSaver yourself, one of the easiest solutions is to set up a direct debit of at least $87 a month into your KiwiSaver. This will get you over the threshold of $1,042.86 so that you will qualify for the full payment of tax credits.
If you are earning less than $35,000 a year, and contributing 3% of your salary to your KiwiSaver, you will not be contributing enough to receive the full tax credits. You can set up a direct debit to your KiwiSaver, to top up your contribution so that you receive the full tax credits.
You don’t have to be the owner of the KiwiSaver account to contribute
If you have a teenager or student in your life (as I do) who is working part time and over the age of 18, you can top up their KiwiSaver contributions each month either by direct debit or by making a one off payment into the KiwiSaver before 30 June so that they will qualify for their full tax credits.
You do not have to be the KiwiSaver account owner to contribute to the KiwiSaver account.
New Zealanders missed out on $302 million dollars of tax credits for the year ended 30 June 2016.
Your 2-Step Action plan:
#1 Get your full entitlement
Check that you are contributing enough to your KiwiSaver to get your full entitlement of tax credits.
#2 Make sure your family & friends are getting their full entitlements
Please talk to your friends, your children and your grandchildren and encourage them to take steps to make sure that they do not miss out on their tax credits for 2017.
Tax Credits 2017
To help you (and your loved ones) make sure you are getting what you’re entitled to in 2017 you may find this short video helpful {please help spread the word by sharing this video so everyone you love can double-check that they’re getting what they’re entitled to too}