From 2pm today, new members enrolling for KiwiSaver will no longer receive the $1,000 kick-start payment, however this change won’t affect existing KiwiSaver members.
“KiwiSaver has been successful in attracting members, with 2.5 million New Zealanders having a KiwiSaver account and together receiving $2.5 billion in kick-start payments since the scheme started in 2007,” Minister Bill English said.
“However, it also has considerable costs for taxpayers. The Government will spend more than $850 million this year on two subsidies – the on-going government subsidy of up to $521 a year per member and the $1,000 kick-start.
Because of these costs, the Government has decided to remove the $1,000 kick-start payment from today,” said English.
Contributing KiwiSaver members aged 18 or over or under 65 will continue to receive an annual Member Tax Credit from the Government of up to $521.
Employers in general are still required to contribute at at least 3 per cent of an employee’s gross wage or salary and employees will continue to make their own contributions.
English stated, “Auto-enrolment when starting a new job, the 3 per cent employer contribution and the member tax credit of up to $521 each year means people still have an incentive to sign-up to KiwiSaver and to keep saving for their retirement."
An in-depth evaluation of KiwiSaver is available at ird.govt.nz