Change KiwiSaver ‘Member Tax Credit’ name so it makes sense
21 May 2018
Change KiwiSaver ‘Member Tax Credit’ name to one that makes sense
Changing the name of KiwiSaver’s ‘Member Tax Credit’ could help eligible KiwiSavers access an annual $521.43 handout from the Government.
That’s the view of Financial Adviser and Summer Investment Committee Chair, Martin Hawes, who says the Member Tax Credit label makes no sense.
Eligible KiwiSaver account holders who contribute at least $1042.86 per annum (the equivalent of about $20 per week) to their account receive a $521.43 contribution from the Government.
“It’s a silly name. People don’t know how it works, it is nothing to do with tax and calling it a member tax credit makes it sound complicated, rather than the easily accessible free money that it can be,” Mr Hawes says.
He says the most important thing for eligible KiwiSaver account holders right now is to get past the jargon of the current name and cash in on the free money on offer by 30 June.
Mr Hawes says previously an estimated 1.1 million KiwiSaver members missed out on the maximum amount.
“Regardless of which KiwiSaver scheme you’re in, check how much has gone into your account since 1 July last year and if possible, top it up to the $1042.86 so if you are eligible, you can receive the maximum Member Tax Credit.
“If you can afford to top it up, you get the maximum free money.”
Mr Hawes says topping up is simply a case of making a one-off deposit into a KiwiSaver account and for many that is as simple as an online payment.
He says while some on low incomes may simply be unable to afford to put the required amount in each year others may have chosen to take a holiday from contributing to their KiwiSaver account and there are many who may be missing out because they are unaware of the opportunity or don’t know what to do.
“In particular, self-employed people or some part-time employees may find that they can afford to top up and reap the benefits.
“I would advise all KiwiSaver account holders to check their accounts and, if they need to and can afford to, top up.”
Generally, to be eligible for a Member Tax Credit you must be over 18 years of age and not yet eligible to withdraw your KiwiSaver account balance (currently age 65, or after five years of membership in a KiwiSaver scheme or complying superannuation fund), have made personal contributions to KiwiSaver, and be a New Zealand resident.
Eligible KiwiSaver members who have deposited less than $1042.86 by 30 June will still be entitled to a Member Tax Credit based on the amount saved and the length of time they have been eligible.