KiwiSaver FAQs

I'm not currently in KiwiSaver - can I still join?

As long as you’re below 65 years and a New Zealand resident (and are living or normally living in New Zealand) you're entitled to join KiwiSaver. 

Why should I sign up to KiwiSaver?

KiwiSaver is a long-term savings scheme designed to help you increase your overall financial independence - particularly in retirement. It's a great way to save for your future because in addition to your own savings, you can get a member tax credit of up to $521.43 each year from the Government plus contributions from your employer up until eligibility age for NZ Super - currently age 65. 

How much will I have saved by retirement age?

This will depend upon a number of factors such as your salary or wage, how much you choose to contribute, how early you sign up, whether you make any early withdrawals, and the long-term performance of the KiwiSaver fund you invest in. This is why it's always recommended that you talk to someone who specializes in KiwiSaver who can help you maximize its benefits. 

Can I stop my contributions at any point?

If you’re a salary or wage earner and part of your salary or wages is being automatically paid to your KiwiSaver account, after 12 months membership of a KiwiSaver scheme you’re entitled to take a contributions holiday. You can start your contributions again whenever you wish. If you’re not a salary or wage earner, you can make contributions to your KiwiSaver account whenever you wish. 

Can I withdraw my funds at any time apart from retirement?

If you’re buying your first home, move permanently overseas (excluding Australia), or suffer significant financial hardship or serious illness, you may be entitled to withdraw some or all of your KiwiSaver savings prior to retirement. Contact us to learn more about the eligibility criteria involved. Also see the information on Buying a home using KiwiSaver on our Mortgages page. 

Can I switch my KiwiSaver provider after I have signed up?

Yes, anyone can switch their KiwiSaver provider at any time. However, you can only belong to one KiwiSaver scheme at any time. We can help you with this – just call us on 03 470 1030 and ask for Jackie Mackle or John Lewis. 

How long does it take to transfer my KiwiSaver account from another provider?

Your previous provider has up to 35 days to transfer your KiwiSaver account to your new provider once they receive notification advising them that you wish to change providers. 

How do I know that I’ve successfully been enrolled in KiwiSaver or have successfully changed providers?

Either way you’ll receive a confirmation letter notifying you’ve been enrolled in the new KiwiSaver scheme you’ve selected. 

I’m opening a new account, what proof of identity do I need to provide?

You'll need to provide a certified copy of an Identity Document with your Application Form such as a:

    • New Zealand Driver Licence; or
    • New Zealand Passport; or
    • New Zealand Firearms Licence

and an address verification dated within the last three months such as a:

    • Bank Statement; or
    • Utility Bill (i.e Sky, Electricity, Water); or
    • Letter from a New Zealand Government department letter (eg IRD)

If investing on behalf of a minor, you’ll need to provide certified copies of the birth certificate of the minor and identity documentation for the guardians as per above.

Those investing on behalf of another person under a Power of Attorney will need to provide identification for the person in whose name the investment is being made as is specified for individual investors above. In addition, copies of the Power of Attorney document and Certificate of Non-Revocation are required.

Applications made on behalf of minors under 16 years old require both parents or all legal guardians to sign the Application Form. Identification for all signatories is required as specified for individual investors, as well as a copy of the minor’s birth certificate to verify parentage.

For applications made on behalf of minors aged 16 or 17 years old, the applicant must sign the Application Form, and one parent or legal guardian must counter sign the Application Form. Identification for all signatories is required as specified for individual investors, as well as a copy of the minor’s birth certificate to verify parentage.

Legal guardians should provide documentary proof to verify that they are the applicant’s legal guardian (e.g. a copy of a guardianship order, a copy of the deceased parent’s death certificate or a signed declaration confirming that they are the legal guardian).

We can help you with all of this and make it easy – just call us on 03 470 1030 and ask for Jackie Mackle or John Lewis. 

How much can I contribute?

You’re able to contribute 3%, 4%, 6%, 8% or 10% of your salary or wages to your KiwiSaver scheme and you can deposit additional money at any time to boost your overall savings. Please note that these additional contributions can't be withdrawn until you’re 65 except in cases such as suffering significant financial hardship or serious illness, emigrating or buying a first home (terms and conditions apply). 

How can I change the amount I contribute?

When you begin a new job or sign up to KiwiSaver, the default contribution by your employer is set to 3% of your before tax pay. However, you can choose whether you want to contribute 3%, 4%, 6%, 8% or 10% of your salary to your KiwiSaver account.

If you’re a salary or wage earner and you receive a pay increase, your KiwiSaver contributions will automatically increase to reflect the increase in your salary or wage.

If you want to change the amount that you contribute to your KiwiSaver account you need to notify your employer in writing. You can do this by writing a letter to your employer, indicating your new rate (3%, 4%, 6%, 8% or 10%) or by filling in a KiwiSaver deduction form (KS2 -  available on the IRD website or from us) and giving it to your employer.

Can I transfer between the Funds offered by my existing KiwiSaver provider?

Yes you can do this and depending upon the KiwiSaver provider you’re with there’s usually no fee charged for doing so. 

Can I view my KiwiSaver account online?

Yes - you should be able to view your account online to check balances, transactions and view your details. If you have any problems in accessing your account or with passwords just ring Jackie Mackle at Altus on 03 470 1030 or email her on jackie@altusfs.co.nz and she'll help you get this sorted. 

What is a Member’s Tax Credit?

Currently the government will pay 50 cents (up to a maximum of $521.43 per year) for every dollar of contributions that you make into your KiwiSaver account. This is called a Tax Credit. To maximize this contribution from the government you need to be contributing at least $1,042.86 each year.

The KiwiSaver financial year runs from 1 July to 30 June and it’s the contributions you make in that period that are used for this calculation. The IRD will normally pay this government tax credit into your KiwiSaver account in July or August each year.

The eligibility to receive the Member Tax Credit ceases at the later of age 65 or five years after joining KiwiSaver. For example, if someone joins 62 they'll be eligible to receive the Member Tax Credit until they’re 67. 

What does ‘Qualifying Date’ mean?

The Qualifying Date for KiwiSaver means the later of when a member reaches the Qualifying Date for New Zealand Superannuation (currently 65) or has been a member of one or more KiwiSaver schemes and complying Superannuation Funds for a period of five years. At the Qualifying Date members can access their KiwiSaver savings. See our page called What happens to KiwiSaver at 65.

What happens to my contributions if I change jobs?

Nothing. You'll continue to remain with your existing KiwiSaver provider meaning there's nothing you have to do unless you decide to move to a new provider.  

What are the circumstances for early withdrawal from KiwiSaver?

KiwiSaver members may be able to withdraw all or part of their KiwiSaver savings early if they’re suffering significant financial hardship or serious illness, emigrating or buying a first home (terms and conditions do apply). An Application form must be completed and supporting documentation must be provided in order for these applications to be processed and approved by the Trustee of your KiwiSaver scheme.  

Significant financial hardship

If you're unable to meet minimum living expenses, you may be eligible to withdraw all or part of your contributions plus your employer’s contributions but can't withdraw the $1,000 kick-start you received or any Member Tax Credits.

Serious illness

In the case of serious or terminal illness or permanent disability affecting your ability to work, you may be eligible to withdraw all or part of your contributions including your employer's contributions, the $1,000 kick-start if you received one and any Member Tax Credits.

Permanent emigration

Subject to providing satisfactory proof of having been living overseas for at least one year, you're able to withdraw your contributions, your employer's contributions and your $1,000 kick-start if you received one. You can't withdraw any Member Tax Credits and these are returned to the IRD once the withdrawal has been processed.

For more information visit http://www.kiwisaver.govt.nz

First home purchase - see our page Buying a home using KiwiSaver in the Mortgages area of this website for everyhthing you need to know about this.

Do I have to pay tax on my KiwiSaver investment?

The return you make on your KiwiSaver investment is subject to tax, which is deducted by your KiwiSaver provider and paid to Inland Revenue on your behalf. The amount of tax you pay depends on whether your scheme is a portfolio investment entity (PIE) and if so, what your prescribed investor rate (PIR) is. Here is some information to help explain the ins and outs of PIRs. The information provided below relates to KiwiSaver schemes that are PIEs only.

What is the PIR (Prescribed Investor Rate)? 

You need to provide both your IRD number and your PIR when you invest in a PIE. Your PIR is the rate of tax you pay on the taxable returns (not all returns are taxable) on your investments in a PIE. Your KiwiSaver provider makes the appropriate tax payments on your behalf from your KiwiSaver account to Inland Revenue, according to your PIR.

This means that you don’t need to file a tax return for your KiwiSaver interests, unless you have been paying an incorrect rate.

There are three PIRs that apply to KiwiSaver members (rates valid from October 2010 and current as at May 2015):

  • 10.5%,
  • 17.5%,
  • and 28%. 

The rate that applies to you will depend on your taxable income, plus the income or loss from any PIEs you are a member of, in each of the previous two income years.

How do I work out my PIR?

The key thing to look at is the taxable income you earned in each of the previous two years. This includes your wages, bonuses and other payments from employment, plus government benefits, rental income, allowances, and any other sources of income that would be included in an income tax return.

Once you've your total taxable income, you will then need to add to this your PIE income, which is the value of the taxable income from all of your PIE investments from each of the last two years. You will see this this information on your annual member statement.

The total of these is your combined income for the purposes of working out your PIR. 

It's important to note that, if each of your last two income years gives you a different PIR, then the lower PIR will apply.

Inland Revenue’s website has a really useful page to help you make sure you’re using the correct PIR. For anyone working out their PIR for the first time, or confused about the process, it’s well worth checking out.

It's your responsibility to advise your KiwiSaver provider of the PIR that applies to your circumstances. It's important that you get your PIR right as choosing an incorrect PIR can have significant consequences.

If you don't provide a PIR to your KiwiSaver provider, your provider will apply the maximum rate of 28%. If you pay too much PIE tax you can't claim the extra tax that you've paid, back but if you pay too little (by choosing a PIR that is too low) you'll be required to file a tax return including your PIE income and you'll be subject to tax on that income at your marginal tax rate (which can exceed the top PIR of 28%). You could also be subject to penalties. So it's important that you let your provider know the correct PIR for your investment income.

If you don't nominate a PIR on your application form, your provider will set it at the default rate of 28%.

How can I find out my current registered PIR?

If you're an existing KiwiSaver member, your KiwiSaver provider can advise you of the PIR they've registered for you. (Your registered PIR should also be on the statements and annual tax certificate you receive from your KiwiSaver provider.)

Your KiwiSaver provider should ask you to confirm your PIR on an annual basis and this is a good opportunity to review it. It's your responsibility to keep your KiwiSaver provider informed of your correct PIR to ensure that you're paying the right amount of tax on your investment returns and to avoid the consequences of having the wrong rate.

This information is intended to be used as a guide only and does not constitute tax advice. Please contact an independent tax adviser to seek advice specific to your circumstances. You can also find more information on PIRs on Inland Revenue’s website or by phoning us on 03 470 1030.

Don't hesitate to call us on 03 470 1030 for any help with your KiwiSaver - we're here to help.