Confusion and misunderstanding may be stopping hundreds of thousands of people from getting a government subsidy that would boost their KiwiSaver funds.

Almost half of the KiwiSaver members surveyed by the Inland Revenue had not heard of the term "member tax credit" and even when it was explained to them 24 per cent still did not understand it.

The member tax credit is an annual government subsidy which gives people 50c for every dollar they put into their KiwiSaver accounts up to a maximum of $521.

Those who save at least $1043 a year get the maximum subsidy but those who save less still get the matching 50c per dollar they put in.

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Last year 1.1 million KiwiSaver members missed out on the full member tax credit and 580,000 people received nothing at all which means they didn't save any money into KiwiSaver.

More than 2.7 million people belong to the retirement savings scheme.

The Commission for Financial Capability has called for providers to do more to get people taking up the subsidy.

David Boyle, group manager of education at the Commission for Financial Capability said: "There's clearly a lot of confusion, which is frustrating given that KiwiSaver has been with us for 10 years. There's been plenty of time to address this growing issue."

Boyle said some KiwiSaver providers had told it that the biggest barrier to people getting the subsidy was affordability.

But the research found while that was part of the issue there were other reasons why people missed out.

"Many said they would have saved in KiwiSaver if they had known about the member tax credit and they expected their providers to communicate more clearly."

One in three of those who didn't get the full amount said it was because they didn't know enough about it with 62 per cent saying they would be more likely to save enough had they known.

Nearly 40 per cent of those who didn't get the member tax credit were not on a salary or wage and forgot to set up a payment.

KiwiSaver members have to put the $1043 into their accounts before June 30 to get the maximum tax credit.

Boyle said it was disappointing that Kiwis were missing out on money which could help them in the future when they decide to stop work.

"It's the best-known return anyone is going to get on their savings." "

"But once that year goes by, you can't go back and claim it later. That's why it is so important to act now and make sure you don't miss out next year."

In 2016 the Retirement Commissioner recommended the Government consider changing the name of the member tax credit.

But the Government said it considered there was "no significant benefit" to changing the name in its response which came out in June.

The research came from a survey of 1800 people by Inland Revenue.

How to get your $521
• transfer a lump sum of $1043 to your provider before June 30
&bull: set up an automatic payment of $20 a week
• choose a contribution rate that ensures you will save at least $1043 a year
• monitor how much you have put into your KiwiSaver account and top it up before June 30 to reach the $1043